Business by the Numbers

70% of all salons operating out there are not profitable. What that says to me is that we aren't making choices about our money that keep our business self sustainable.  A business coach will tell you to always run your business by the numbers and not your emotions. "Numbers don't lie, we do."

Use your Schedule'em Reports page and run a monthly report.  Now look at your monthly view of the calender.  Its important to take in all of the months viewpoint and recognize how the bottom line fits on the appointment book. By including a visual of what days are busy and what you were doing will give you some perspective on what is really bringing in money.  Now all you have to do is figure out where it is going.

Ask yourself: What percent of the income you spend is dedicated to replacing your supplies?

I do mostly color from day to day.    My business coach suggested that my product cost should equal no more than 10% of the total of my service.  That means if I do a $100 color, my product cost including the sundries like foil and my special after color conditioner should equal ten dollars or less. 

Surprised?  I was.  Here is how I made my numbers work out for me without compromising my preferred products, or raising my price:

Always measure and record the amount of color used.  You can keep your notes about this specific client in your notes section of the Edit Appointment page of Schedule'em to reference next time.  The goal is to use as much of the color you mixed up without washing excess literally down the drain.  To prove a point to one of my apprentice's, I made her collect all her extra color in one bowl for the day.  The amount of color in that bowl and the one next to it at the end of the day spoke for itself and we both made adjustments of how much color to mix.

Schedule'em Online Appointment Book has a notes section to record how
much and what you are using on each client to reference next time.

A color scale will fine tune the amount of color you use.

Another thing is to make sure you are charging appropriately for color.  Determine the average amount of color needed to complete a service.  If your client has thick hair, it won't surprise her to have an additional charge for the extra color needed.

Consider charging additional amounts for each color if you are using more than one shade.  Even if the total amount of color is equal to one application, charge for each shade.  Why?  Inventory is valuable.  If they had to pick these shades and bring them to you they would still be paying for each of the different boxes.

If you aren't charging appropriately make adjustments to your price list and address it with each client before you begin the service to avoid any surprised customers at the check out point.

Do you know what your bottom line is?
Are you willing to commit to do what it takes for a healthier bottom line?
Do you need to raise your prices?
How can being a better business person help you be a better at serving your customer?