Catching Salons up with the Rest of the World
Ok I am not going to fluff on this topic TIMES UP! It’s 2019 and we MUST separate parts from labour now more than ever to ensure every color leaving is turning a profit.
We have as an industry been taught how to emotionally connect with our customers to have continued growth from behind the chair; however, as we gained a loving relationship, we crossed the line and charged our guests purely on emotion. What’s worst, as salon owners we are intimidated and scared to charge what we need to simply break even in our businesses.
Ten years ago, the effects of social media drastically impacted the salon world. Not only are we seeing a rise in the independent movement, but hair color is already being used more than ever before. The color manufacturers jackpot is a salon owner’s death trap. Salon owners were not as prepared as the rest of the world and we got hit the hardest.
It’s time to catch up and be a part of the rest of the business world. No matter where you go - whether it’s a visit to your lawyer, fixing your vehicle, or even home renos - they separate parts from labour to ensure they are covering their cost of goods sold (the things that cost a business money to perform their services). These industries would never put it in one flat rate as it would dramatically affect their bottom line and leave them UNSURE if they are turning a profit. WELL GUESS WHAT SALON OWNERS!! This is why you feel confused as to why your revenue keeps going up but there is no cashflow in your salon. You absolutely cannot pay commission on your parts especially when color is costing more than $25-$40 on a single application.
No matter what way you look at it, it makes you wonder how is it that we, as an industry, could have missed this? How is it that we have not changed this? Well I believe it’s important to think outside the box and as a salon owner myself an average of 2-4% profit simply does not cut it as a business owner anymore. Even if you work for yourself, do you want to keep guessing and assuming your making money or do you want to KNOW? Separate your parts from your labour and you will be certain every time.
Now don’t worry about your guest freaking out - they will love that they now only pay for what they use and the fact you have a digital record makes them 60% more likely to return to you knowing they can get their favourite color every time. Your guests are used to this in every other industry and by us moving in this direction, it just gets us on par with how the world works.
So I leave you now with the encouragement that we can do this and we can still elevate the industry even though we are two decades behind the rest of the world …
Nothing but love,