Just because you can pencil profit into the financial section of your beauty salon business plan, doesn’t mean it will automatically happen. Profit is how we keep score in business and when it comes to profit, we want to be winning.
As a business owner, you have to commit fully to ‘minding your own business
’ in order to generate the profits you seek. Here are 5 business tips to making your beauty or hair salon more profitable:
Use Good Resources: To operate a profitable small business, you must constantly evaluate the productivity gains from your employees and resources. You cannot afford to waste with a small company. Do not employ anybody without knowing the potential return on investment for your business. Before buying equipment or supplies, consider the direct or indirect impact the investment has on your bottom line.
Use Monthly Sales Goals: It is difficult to achieve profits without hard work. If you always focus on monthly sales goals, then you will focus on weekly sales objectives. By doing this on a regular basis you will always stay focused on marketing activities. Too often, beauty salon business owners stay focused on services and don’t fill the sales pipeline.
Always look for Efficiency Gains: The key to maximising profit potential in a small business is to always look for efficiency gains. Look for ways to save, for example, you could save £100 per month: reduce banking fees, change to light efficiency bulbs, do routine cleaning etc. Efficiency isn’t just about cost reduction, find ways to get the same or greater value with a lower investment.
Increase Revenue: The basic principle to optimising your profits lies in your ability to increase your revenue at a higher ratio than your costs. In the short term, you need to generate the maximum value from each client and upsell them additional products and services to get more business. By focusing on your customer experience, that will lead to word of mouth referrals and repeat business. It’s much cheaper to keep a loyal client that to secure a new one.
Pricing Strategy: Evaluate your pricing strategies to enhance profits and make your business more profitable. Don’t undersell your services. Precise and correct pricing attracts the right buyers who are willing to pay for quality. Regular discounting establishes a price orientation with clients and minimizes gross margin.
Basically, the road to profitability includes an emphasis on eliminating waste, optimising revenue while reducing and controlling costs.