Back when I was a new salon owner it would have been really great if there was a salon owners guide to wealth. Simply put, we know how to bring money into the business, but we never learned how to build real salon wealth.
In this post, we will be looking at the importance of knowing your numbers in your salon. For ideas on extra revenue streams for your salon, visit this list of ideas.
Let’s talk about building salon WEALTH
You have to get really clear on your true numbers and know how they impact your business. Creating salon wealth in your business happens in many forms and we use proven methods and techniques to increase profits and build consistent earnings that align with your goals. This really gets at the heart of your success. You simply can’t fake profitability, and if you don’t understand how to create predictable cash flow, then you’ll always struggle.
Know Your Numbers
So many salon owners simply don’t know their numbers. To properly set goals, you must have clear knowledge of things like cost per hour, revenue per hour, expenses compared to revenues, revenue per time standards and productivity across your entire team.
Once I committed to learning my numbers in my salon, that’s when things changed. It wasn’t easy but it was essential to the success of my business. I became obsessive on the key metrics and how to make the important decisions and choices that had a huge impact on my numbers.
The key to building salon wealth and wealth in your personal life requires knowledge of the numbers…
Key Steps to Building Your Salon Wealth
- Build a powerful mindset and get crystal clear on your goals. This includes the personal and professional goals. For more information on setting goals, check out this article: Building Salon Goals and Mindset
- Economics of your company. Understand how the financials work. Basic bookkeeping and accounting. How to read financial statements, but more importantly what they mean.
- Salon performance benchmarks. Learn the essentials in evaluating the performance of your financials, your staff, your client retention and all the numbers you need to know to understand the true state of your salon. This includes cost per hour, productivity & client retention.
- Plan your profit. Listen, if you are not strategically planning your profit, then you’re planning to have no profit. This is the most important thing every salon owner should learn. Most owners simply work hard, provide services, make sales, pay bills, and then hope there is money left over at the end of the month. This system will NEVER get you to the next level. Check our article Profit First for Salons.
- Implement a retail program for client services. Your staff needs to understand and learn how to include multiple retail options during every service they provide. There needs to be an education process for the client that happens throughout the service. Once your team starts integrating this method in their service, retail sales will easily double and client retention will grow.
Salon Cadence is a high-end coaching and training company who help salon and spa owners & stylists create more time and wealth within their company to achieve their ideal lifestyle.