Discover the 13 Essential Elements That Guarantee To Turn Your Salon Into A Profit Generating Machine

Discover the 13 Essential Elements That Guarantee To Turn Your Salon Into A Profit Generating Machine

Who wouldn't want a business that was a PROFIT GENERATING MACHINE? No-one that I know and the good news is that it can be done and there has never been a better time to get started on turning your business around. No matter what doom and gloom you have been getting layered with this past year, you can make profits in your business and all it takes is a bit of courage, the willingness to change what you are doing and the perseverance to stick with the new plan.

Every business owner that I have ever worked with has chosen to go into their own business with the dream of being professionally, personally and financially triumphant. To date, I am yet to meet the business owner who has told me that he/she wanted to do the hard yards just for fun!

It is not uncommon to be told that instead of working 35 hours each week and taking home a regular pay packet (as they did as employees), business owners are now working 55 plus hours per week and only occasionally taking home some form of meagre income. This is not a great situation to be in and rest assured if this is where you are at present, you are not alone. However, if you continue to do business the same way that you have in the past you have to expect to get the same results at the very best and because times are tough at present you may actually be much worse off. So what is the answer? CHANGE, and lots of it!

The reason that many businesses fail can be attributed to the fact that the majority of business owners come from a service provider background and NOT a business background. Many believe that because they excel in the services that they have provided for their customers during their career to date, that it is a given that they just have to continue doing the same thing as a business owner and success will be theirs. This is the first slippery slide down the tunnel to financial AND personal stress.

As a business owner, you have undertaken a whole new and vastly different set of responsibilities and nearly none of them involve providing great professional services personally. Sure, providing great services is really important to the success of your business, but it is more about making sure that your people are now the ones who are providing this to your customers.

Let me ask you a couple of simple questions?

1. Are you the most sought after service provider in your business?

2. Do you spend more hours servicing your customers than any of your other employees?

3. Do you believe that none of your staff can do things as well as you can?

4. Are you generally the first to arrive and the last to leave each day?

5. Are you exhausted, stressed and wishing you had never gone down this path?

If you answered yes to these questions, now is the time to STOP! How do you expect to MANAGE your business when you are spending all of your time working IN it? When are you finding time to work ON your business - certainly not after spending 55 hours on your feet servicing customers? Now is the time to embrace an entirely new mindset about your roles and responsibilities within your business. The question is this "Who is managing your business if it isn't you?"

Here are 13 sure fire ways to get your business back on track and making you profit and the best part is that most of them won't cost you a single cent to implement:

1. Become a Great Leader

In business, everything comes from the top. This means that your actions will affect every aspect of your business. If you arrive at work in a grumpy mood, this sets the tone of the business for the rest of the day. If you snap at your staff, this is how they will speak to the customers and each other. Be the person you want your staff to be and lead by example - always.

2. Employ the Right Staff

Skills can be taught or upgraded but it is nearly impossible to change a "bad" attitude. Employ your staff with great care as these are your frontline people who will be operating your business. Always check potential employee references with past employers and never be tempted just to hire anyone because you have a vacant position to fill. Selling is what your business is really all about. Selling products, selling services - it's all about selling so make sure when you hire a new team member that they love to sell!

3. Treat Your Staff the Same Way You Want Them to Treat Your Customers

Yes - shock and horror. When you treat your staff poorly, this is the example you are setting for them and is exactly how they will treat your customers. Remember, you must lead by example and it has to be consistent. Happy staff really do make happy customers who will want to spend more money and time in your business.

4. Educate, Educate, Educate

Ensure both you and your team members undertake regular training within important areas in your business. For you, learn and update your business skills and for your staff ensure that they not only attend the latest in product knowledge and service skills courses but are regularly trained and retrained in sales and providing outstanding customer service skills . Just because employees move on to other jobs is not a reason to withhold training from your key people. Staff turnover is inevitable but the person who really gets hurt by having untrained staff working for them is YOU. Motivational staff training needs to be done on a very regular basis if your staff are to keep meeting business goals.

5. Learn to Delegate

Believe it or not, you are not the only person who can do all the important stuff in your business. Your staff have many talents outside of providing services or selling products to your customers. If you delegate tasks according to the individual staff member's strengths you will be able to offload a lot of the more menial jobs that have been eating into your time and keeping you away from more important jobs (like managing your business). Why not consider promoting one of your key staff with management potential into a more responsible position and training them to take over some of your workload. This in turn will free you up to work on the overall business such as developing new strategies for marketing and refining pricing and services.

6. Set Realistic Goals for Yourself, Your Business and Your Staff Members.

Everyone benefits from having goals. As a business owner you need to be putting time into setting goals and then ensuring that everything possible is done to achieve them. Goals are often best handled on a day to day basis for your staff. Every day each of your staff should clearly understand what financial goals they need to meet to be an effective contributor to the success of the business. Assist your staff to find ways to meet their goals by discussing opportunities they may have throughout the day.

7. Find Your Market Niche

Let's face it. You just can't be everything to everyone. Find out what you are good at and become the market leader. Stop trying to do it all. When you look at other market leaders you will notice that they don't offer a wide variety of services or products but they do them better than anyone else. If you are not great at something either get great or get rid of it. Never offer your clients substandard services or products as this is the level that all of your business will be judged on.

8. Watch Your Numbers.

There is no excuse for any business owner to be ignorant of what their business is doing. It is essential that you know the basic numbers of your business including things such as:

* Break-even point - what does it cost to open your doors every day?

* What is your average dollar spend per customer for both products and services?

* What is your service to product dollar ratio?

* What is your rebooking rate?

* What is your room usage rate?

* What is your profit margin on services and products?

* What is the percentage of wages to turnover?

For those of you who are computerised, these figures are at your fingertips so stop using your computer like it is a fancy cash register and start utilizing those wonderful reports that you have access to and do it regularly. After all, how can you plan to reach a goal if you don't know where you are starting from?

9. Find Your Profit Gap

Every business has one and some have lots of them. It is that part/s of your business that has the potential to generate a lot more money if you were to focus on it more thoroughly. For some businesses it might be that expensive piece of equipment that is not being properly utilised or perhaps it is as simple as not generating adequate product sales (which by the way is the cream on the cake for most service businesses). Whatever you business may be, look for your profit gap/s and then develop ways to generate more profit from it. Once you start looking, you may find you have lots of "gaps" to fill. Wouldn't that be great!

10. Run a Cost Reduction Program

If you haven't run a cost reduction program in a while (or perhaps never), now is an excellent time to look at your expenses and see how they can be effectively reduced. Such things a telephone plans, merchant charges, freight costs and bulk purchasing are all negotiable and should be renegotiated with your suppliers on a regular basis. Even looking at ways to trim your electricity costs can save you many dollars over a year.

11. Review Your Service Menu

Is everything on your service menu making you money and if so is it enough? While things are a little quiet, you have the time to cost out your services. You may well be surprised at how little you are making after expenses on some of the services you are offering. When is the last time you increased your prices? I generally recommend that my client's run rolling price increases throughout the year so that every service has increased in price at least once every 12 months. A lot of businesses make the mistake of printing too many service menus in one hit and then they feel that they can't implement a price increase until they have to reprint their menus. This is flawed thinking and is costing you money if you are doing this. Only have enough menus printed to last you for three months and then reconsider a portion of your service pricing before have new menus printed.

12. Develop a Loyalty Program

The best customers you will ever have are the ones who already come to you. After all, they already know you and like what you do for them so steps need to be taken to ensure that they stay loyal to your business. Customers of today now expect their providers to offer them incentives to stay loyal. Just look at Qantas's Frequent Flyer Program or even just the local coffee shop. They are all offering incentives to their clients to stay loyal and it works. Start rewarding your clients today for their loyalty to you.

13. Implement a Referral Program

If you are not utilizing the potential in your database to generate new business, then you are missing out on one of the most cost effective ways to build your business. Your customers already love you and the services you provide so why not use that loyalty to help you to gain new clients. It's cheap and easy to implement and what's more your customers will soon become your best source of new business.

As a serious business owner who wants to achieve financial success you need to eliminate the "Ostrich Technique" from your business management. This is where you simply bury your head in the dirt and continue doing the same thing you have always done and hope things improve on their own. To date, statistics tell us that this technique is guaranteed to produce a 100% failure rate. If however, you are hoping to achieve business success, new ideas about what it takes to run a successful business need to be embraced. You need to get your head around the fact that you are no longer a service provider but instead a savvy business professional who keeps their eyes on the finances and performance of every aspect of their business. Many business owners simply never get their head around the fact that life as they once knew it will never be the same and alas these are generally one of the 80% that fail. Yes, it does take courage to step up and learn how to manage your business and lead your people, but the rewards will make it well worth the effort!

A favourite quote:

Don't wait for a light to appear at the end of the tunnel, stride down thereand light the bloody thing yourself! Sarah Henderson

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