7 Steps to Get Cashflow Into Your Business Now
Could your salon use a boost to your bottom line? Here are some tips to find out how.
Do you have a desire to find out just where that cash flow is going and how to add more to your salon? Amazing! But that is the first step on the path to riches. If you find yourself short and always scrambling to pay bills, not to mention a hard time paying yourself, you need to act now before the problem gets worse. Follow these 7 steps to build the cash flow you and your salon deserve.
1.) Increasing your Pricing Sounds simple, I know what you’re thinking. What about my clients? What about my staff? Step one is so important, and you’ll need to get comfortable with being uncomfortable. It’s time to make sure you are turning a profit on almost ALL of your services. Bonus tip: Separate your parts from labor on all your color services to ensure you are profitable. Color management software helps take the guesswork away in pricing. (Click here to get your free 30 day Trial)
2.) Decrease your Expenses Before you get started to make sure you plan to take your time. I suggest a full day to study what is leaving your business. Create a list and start recording every expense trailing back for a year if possible to gage better just how much your expenses, monthly, and yearly are. Once you can find the areas where you can cut costs and start saving today, you can set your monthly budget. By decreasing your expenses, you will dramatically change the structure of your company and set it up for success and sustainability.
3.) Add on Services/Challenges Everyone loves a good competition right? Take some time to plan out a year of monthly challenges whether it is add on services or retail – these team goals will help you increase your margins. If you can increase each ticket by just $10 as a salon will an average 300 tickets a month that’s another $3000 a month.
4.) Decrease Time Spent on Customers /Track Time This might come as a surprise, but this is one of the more important steps. Getting your time spent per guest down simply increases your chance of more customers and more profit per client. Just remember that good old saying: Time = Money. So many of us have a hard time valuing our time. If you take more time, make sure you are pricing properly so you do not ultimately cut your profit per hour down.
5.) Retail Incentives per Transaction There are two parts to this step. The first step is to set a percentage of retail sales to revenue transactions. 21% of each ticket is a great retail target. Watch this daily, and remember being able to increase each sales ticket is a double win. It ultimately increases your cash flow and pays off a product that has been burning capital by sitting on your shelves. The second would be to do an incentive on retail for your guests (an example of this would be a BOGO sale). Be consistent and have your sales run at the same time each year to build momentum and hype.
6.) E. Commerce Make money while your salon is closed. We are all not web builders, luckily there are platforms like Shopify and Squarespace to make it easy. Create content that promotes the products to purchase and create look kits and or bundles for extra sales. Now let’s talk about salon retail commissions. Are you holding back because you don’t know how it will affect your staff? The best tip I have is either make a form that the consumer has to fill out regarding who their stylist is or create a team bonus or team base payout. This is a great way to reward everyone and keep it simple.
7.) Create Clear Goals Lastly, creating clear goals by monitoring each stylist and or your numbers. Track your service revenue, add on revenue, retail revenue. Create goals that increase by a minimum of 10% year over. Being able to see who in the business needs the most help is a powerful step to hit your projections. Get ready to watch your bank account burst with that CASH!!