5 Tips For Improving Your Salon Suites Profitability
While receiving your beautician training, you acquired the skills you need to become an excellent stylist. Unfortunately, cosmetology schools don’t usually dive into the core fundamentals of running a successful, profitable salon suite. But, in the saturated salon industry, it’s crucial to know how to increase your profits without affecting the customer experience. So, we’ve outlined the top five tips for improving salon profitability that every owner should follow.
1. Know Your Numbers
It may seem like such obvious advice, but many salon owners fail to take a careful look at their finances. It’s essential to know how much revenue you’re making and how much profit you generate. By knowing your numbers, you can:
- Start to understand monthly patterns in revenue so you can predict busy or slow seasons and adjust staffing as needed. Understanding your slow seasons will allow you to financially prepare to make it through those months with lower revenues.
- Modify pricing if your profit margins are too low.
- Understand if certain parts of your business generate more revenue and make those services a priority.
- Understand if the products you’re selling in your salon are profitable.
You don’t necessarily have to learn these skills on your own. It’s beneficial for most business owners to work with an accountant.
2. Create a Budget and Stick to it
When you don’t have a plan for your money, it’s easy to have profits slip through your hands. Having a budget will allow you to grow your business at an appropriate speed while also paying yourself. Your budget will help you:
- Identify an appropriate take-home salary for yourself to ensure you’re getting paid.
- Make a plan for big purchases for the business. For example, if you need a new piece of equipment, you can start putting monthly contributions aside for it.
- Analyze spending, so if a month ever gets out of hand, you can rectify it immediately.
- Resist the urge to make impulse purchases for the business.
Creating a budget is a lot of up-front work, but after the initial set-up, it’s easy to keep it going. And, you’ll love the security it gives you, knowing where all your money is going.
3. Look for Ways to Reduce Your Overhead
Your overhead costs impact your salon prices and your bottom line. If your salon’s overhead costs keep increasing, you may have to raise prices, which can cause customers to leave. Or, increasing overhead expenses can stop you from reinvesting in your business with other upgrades you had in mind.
First, every salon suite owner should have a list of their average monthly overhead costs. Next, evaluate these costs to see if there’s room for reductions anywhere. For example, you can shop around for merchant credit cards with better rates. Or, partnering with a new product supplier with better profit margins. Small changes such as these can save you hundreds or thousands of dollars throughout the year.
4. Allow Clients to Book & Pay For Services on Your Website
Your website should allow clients to book and pay for services directly online. First, this is important as it reduces the time you or your employees spend processing payments in the salon. Next, this can be a revenue booster as you can sell products and gift cards online. Lastly, clients will love and appreciate the convenience of this option, which can increase client retention for your salon.
5. Expand Your Menu of Services and Adjusted Prices as Needed
It’s easy to set up a list of services and products at a certain price point and forget about it. But, these numbers and offerings should be re-evaluated often. You likely opened your salon with similar pricing to other salon suites in your area. But, if some time has passed and the other salons have increased prices, it’s probably time for you to do the same.
It’s also important to keep your eye out for new trends that you may be missing out on. For example, the recent trend in microblading may be something you would want to consider adding to your salon services. Note, whenever you do add new services or products, it’s important to evaluate their profits.
About Imagique Salon Suites
If you’re ready to launch your own salon suite today, contact Imagique Salons to see one of our three convenient North Dallas locations. With Imagique, you can be a salon owner in no time at all!