When it comes to salon finances, most salon owners are in the dark. They
seldom know the profit and loss incurred in a month. This makes things worse
and affects the salon bottom line altogether.
If you own a salon and really want to watch your numbers grow, it is
extremely important to stick to a concrete plan. Understanding the what, why
and how of certain crucial numbers can help you make informed business
decisions.
When you understand the basic numbers of your business, you can start
planning and working towards bigger aspects such as salon face lifts, expansion,
retail store, hiring spree and more.
A salon owner has countless tasks to juggle – payroll management,
employee scheduling and marketing. With so many things to do, the business
aspect just seems dull. Also, salon owners feel that with so many things to do,
there is very little time left for strategic growth. Due to this, they tend to
operate in the same way for years without realizing that some practices
followed by them are actually hindering the growth of their business.
If a salon wants to embark on the pathway to success, the first step is
to get the right tools. Salon software can help you achieve
the results you truly want to see for your business.
MioSalon, salon management software,
has a real-time report and analytic feature, which gives business owners an
insight on how their business is performing. Besides generating detailed
reports, it also helps salon owners and their managers to analyse the data
correctly and make informed business decisions such as stock ordering,
promotions, staffing, expansion, among the other things.
However, having too much data can be overwhelming and lead to business
mishaps. Thus, if you are in the salon business, it’s important to run the
right reports that will give you up-to-date information on how your business is
really doing.
v Client retention report:Clients are the main reason salons are able to survive. Therefore,
salon owners must give paramount importance to client retention. Running a
client retention report will help you determine which employees are retaining
most of the clients and which are struggling. Also, a salon must understand
that it is cheaper to retain clients than acquire new ones. The average
retention rate for first-time clients is usually 30% while for regular clients,
it is 80%. The fastest way a salon can grow is by analysing these retention
rates. Client retention reports should be generated every month to check which
clients are leaving and which are staying. Salon owners can use this
opportunity to reward employees who are able to retain clients too. If you
haven’t seen certain clients in a while, send them an email, text message,
inviting them back to your salon.
v Inventory status report:Inventory management is an important aspect in any salon. Analyzing
this report every month will give you a fair idea on your retail and
professional inventory. Retail products can add tremendous amount of revenue to
your salon. Generating a product sales report will help you determine which
products are bestsellers and which items are just collecting dust on the
counter. Once you get this information, you can probably increase the order of
the products that sell the most and ask your suppliers for discounts too. The inventory
management feature on the beauty salon software will notify
managers about product consumption, retail product sale and low stock alert.
v Sales/Business summary report:It comes as no surprise that the business summary report is an
important one to look into. Most salon owners analyse this report with their
accountant. It gives detailed information on the sales, deposits, gift card
sales, redemption, tax collected and other client information. A salon owner
must compare the numbers from month to month to identify trends and
irregularities. If certain services are not selling out, find out why. While
analysing these reports, emphasis should be even given to no shows and
cancellations. Use these figures to eliminate no shows by frequently sending
clients messages and emails.
v Activity trend report:In addition to monitoring your number of services, you will want to
see the amount spent, by each guest, per visit. The more you know about a
guest’s needs, the more you will be able to provide solutions. The statistical
information generated on the salon management software can be used
to analyse client rebooking rates, new client percentage, request rates, retail
sales and average ticket. This report should be run every week to help stylists
monitor their progress and work towards their goals.
v Employee utilization:When you run a salon, the primary resource that you are selling is
time.In order to increase your bottom line, you would want your employees to be
busy all the time. While it’s impossible to expect a 100% utilization, you must
aim towards getting as close as possible to it. The employee report will be
able to give you insights on your staff and their schedules. It will tell you
which employee is busy most of the times and which one is idle. You can also
gain an understanding on when your salon is busy, and when it’s not. To
minimize gaps in the appointment book, improve marketing efforts and encourage
customers to book appointments during quieter times to keep employees busy
throughout the day. If you are nearing 100% utilization, it’s time to grow your
business by probably adding another chair or hiring another stylist.
v Client referral report:The most cost-effective way to get clients in a salon is by way of
referrals. If a client refers their friend to your salon is primarily because
they have given you the ‘seal of approval’. They strongly believe in your services
and want their friend or family member too also get the same kind of
experience. A salon should make it a practice to check which client is
referring their friends the most. At the end of a quarter, they should be
rewarded and given special benefits. They are not just your VIP customers but
unpaid advocates.
With MioSalon, beauty salon software, a salon can make
informed business decisions. From receiving real-time information to making
strategic changes, analysing profitability of services and products, efficiency
of employees, client retention, monitoring effectiveness of marketing campaigns
and avoiding errors in business management, a salon and
spa can do all this and more with MioSalon. Run them consistently and you will
slowly start seeing a change in every area of your business. It’s high time you
understand where your business is going. Start your free trial here.