A Transparent Back Bar That Builds Trust - SalonScale
Business Tips

A Transparent Back Bar That Builds Trust

By Andrea Dodig | 

Transparency is the newest currency to building trust. And trust is needed now more than ever. A transparent back bar is the only way to build trust between all 3 stakeholders – the salon owner, the stylists, and customers.

SalonScale presents an opportunity for every salon owner and solopreneur to have a transparent conversation around the actual costs associated with their services. By doing so, you can make informed financial decisions without letting emotions influence them.

Trust is the foundation of a transparent back bar. When building a transparent back bar system the first thing you need to think about is how do we all win? How do the salon owners, stylists and customers all win? It’s not about how I win. It is not you against your stylists and customers. You will know exactly what products to order by adding in the actual products used into the app. SalonScale provides you with the true cost, which presents a win-win opportunity for all stakeholders.  

You as a salon owner, chair renter or suite owner are constantly wearing multiple hats. If you don’t have direct operations support you are managing the human resources, marketing, sales, operations and finances of your salon. There is only one of you. As much as you want to do everything yourself, you can’t. You need the support of your team and digital tools.

Trust Is The Foundation To A Transparent Back Bar

Without your customers, your salon wouldn’t survive. So help your customer understand how much their sessions cost in real time. With SalonScale, every single time you’re using a product, you have transparency to those costs. You’re being fully transparent with your clients because you know exactly how much you are charging and why. There is no confusion. Additionally, on the back end, you now have a real-time order system. By adding in the actual products used, you will know exactly what products need to be ordered. Consequently, aiding in leaning out your inventory to prevent over stocking your back bar. 

To build trust with your team, you need to have hard conversations. Be open with your staff about issues that are occurring in your business and how you plan on fixing it. Your staff will support you as much as you support them. Lean on your team, you’re not in this alone. Explain to your team that there are massive leaks in your business and the biggest culprit. It is imperative that you sit down with your stylist and have a conversation around the cost of back bar products. It is just as important for the stylist to understand their finances as it is for the salon owners.

The vitality of your salon rests on your pursuit to build trust with your staff around the cost of doing business. Otherwise, the leak in your back bar will continue to grow. See How to Empower Your Staff to Know the Numbers Side for more information on how to talk to your staff.

Waste Buckets

Waste is not the issue – COST is the issue. 

The only strategy we have today for waste management is to scrape our waste – the things we did wrong and put it in a bucket. This doesn’t allow you to know which stylist contributed to how much of the waste. As much as you are trying to help contribute to the environment, it’s too late. Ask yourself, are you efficiently reducing waste this way? The answer is no. 

You need to control your cost and scraping bowls is not the solution. When trying to reduce waste, your efficiency plays an important role. And to create an efficient back bar you need digital tools that will hold you accountable and increase your accuracy and efficiency. SalonScale will help you reduce waste because we are a leading indicator whereas waste buckets are a lagging indicator. 

Leading Indicator: Predicts future conditions. They define what actions are necessary to achieve your goals. 

Lagging Indicator: Assess the current state of business. Analyzes whether the intended result was achieved.

For example, imagine your salon as a car.  Leading indicators look forwards through the windshield at the road ahead, whereas lagging indicators look backwards through the rear view mirror at the road you’ve already traveled. 

Not only are you wasting product when you overmix, but you are also throwing away profits. If you have a salon with 7-10 stylists, and you don’t control your back bar, the leak becomes 10 times the problem. For example, if your exact product cost is off by $1, you can lose $10,584 a year. For more information read The Impact of One Dollar.

So how do we solve this problem? 

It all starts with what you weigh. What beginning information do you need to know before you start mixing, so that you don’t over-mix and are creating the right formulas. SalonScale is providing you with the information you need in real-time to prevent you from over-mixing. We are going to solve the problem before you even start. Using the SalonScale app, you can duplicate the perfect hair that your clients loved easily. But don’t forget to refer to the notes you left from the previous session in the app to ensure you mix the right amount of product and the perfect formula.

Increasing Your Ticket Prices

Lots of times when a salon owner is stressed about how they are going to pay the bills, increasing their prices seems like a good solution. Let’s be real – it’s not going to solve the root of the problem. You can’t cost blindly. You need to have a strong understanding of your operational expenses. 

Today when color can cost you up to 25% of your transactions, $80 per session you must create a transparent back bar by using digital tools. Increasing your ticket price is a band-aid solution for the short turn. If you’re not controlling your expenses and your mindset is “I’ll just increase prices” you will burn yourself out because the problem is everlasting. You as a salon owner or stylist are great at generating top line revenue. However if you don’t control your expenses, the holes in your business will continue to grow and flood your salon. Raising your prices is not the solution. You need an operations system like SalonScale to patch the leaks to run a sustainable business. 

Many salon owners and stylists say “oh don’t worry I already charge enough, I have $25 going to color”. Is it really going towards your costs of goods sold or is it going into a revenue bucket? If it is going towards revenue, after you deduct your expenses you are paying taxes on your products. Or as a salon owner, if you’re not separating your product cost, you’re probably paying commission based on your parts.

Allowances

Allowances and service fees do not work. Why? Because no two manes are the same. Variable services require various costs. Hair length, density, and thickness vary from client to client. As a result, you are penalizing customers for the ones that use more products. So if you are using a generic fixed rate to cover your product expenses not only will you be losing out on potential profits but you are not acting in good faith to your customers.

Stop hoping and start knowing that you are covering your back bar products. SalonScall exposes the actual cost of back bar products being used. Lindsay Lowe from Platinum and Company states, “the biggest thing that I learned since implementing SalonScale was that we were probably paying people to tone their hair…so implementing [SalonScale] was a huge game changer”. Be confident knowing that you are profiting on every service. 

Additionally, this allows you to build transparency between yourself and the customer. The customer is now only paying for the products they used.  A customer with less dense hair shouldn’t have to accommodate and pay more for others who use more products, and those who use fewer foils shouldn’t have to pay more for a bundled package. You just need to ensure you are covering your costs. As well, SalonScale makes it easy to manage your product pricing and mark-up in the app. You are confident that all product costs are covered, and you have revenue coming in to cover operational costs, when you charge a customer for products that were actually used during the appointment.

Transparency leads to stronger relationships with your clients. Customers are tired of not understanding how they are being charged for their hair. By weighing your color and tracking the cost of other back bar products used such as foils, allows you to be transparent with your customers. On their receipt, your customer will see exactly what they were charged for, eliminating any questions they may have.

Summary

You need a transparent back bar system now more than ever. Trust between the salon owner, stylist and customers will lead to a sustainable and healthy business. Create a transparent salon with SalonScale. Get the exact cost in real time, and charge your customers for what is used to ensure your back bar is paid for with every transaction. SalonScale ensures that you get paid, your products get paid for, and you get profit in your business. It is an instant cashflow builder. But it all revolves around you first building that trust with your customers and team and operating a transparent salon. 

Andrea Dodig