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Ugly Money Mistakes Beauty Salon Owners Make

hair stylists business loans bestEvery entrepreneur makes mistakes because we are human and learning as we go.

Our goal as entrepreneurs is to make fewer mistakes than we do successes.  Or at least make our successes larger than the damage our mistakes create!

In my business consulting practice I worked with Salon owners who have made these types deadly financial deadly mistakes, without realizing it, until it’s too late and they are forced to close their salon and gone out of business.

Let me save you from this misery and business losses now to help your salon succeed better today.

These mistakes are listed in order of detriment to your business survival salon survival:

  1. Lack of cash flow management.

Money is the lifeblood of all businesses especially cash ones such as salons. This is the number one reason salon’s fail because there is lack of attention, no education and poor management of their Cash Flow. If you want to succeed as a salon owner you must understand and manage your cash flow properly and regularly.

>To smooth your cash flow consider increasing your working capital with the best loans for beauty salons

Cash flow is the process of money coming into your business and going out to pay for supplies, rent, and salaries. Since not every bill comes due on the exact day that you receive money from clients, you need to manage the inflow and outflow of money from your salon business. Too often I see Salon Owners focus entirely on income while ignoring expenses and cash flow shifts to their detriment.

You must also know and track your regular and irregular monthly expenses. I recommend salon owners use their to prepare and review a month, or weekly, cash flow statement which shows when bills were due and cash income will be received.

If you are more creative and not feel comfortable with accounting reports find a bookkeeper who will guide you and help you to manage this vital aspect of your role as the salon owner.

Not ignoring trendy big-money beauty treatments

just as electronic technology evolves so does beauty technology and with it comes new treatments and new products as fads that come and go. Many beauty supply distributors and professional product vendors will tell you that if you do not offer these services your salon will fall behind – do not believe them.

The majority of your revenue based on national averages will come from your basic treatment such as cuts, color, manicures and waxing.

Your salon profit will be a calculation of the retail price minus supplies and labor thus keep an eye on the percentage of cost for supplies. Many of these trendy products have very high cost percentages upwards of 30%.

It would be worthwhile for you to track the number of different services you sell in a month and compare them on a regular basis along with the amount of money you spend on products and supplies for those services. You may be surprised to find out that certain services are amongst your most profitable and those are the ones you should be promoting to build your salon business.

If you discover that there are some services which are neither popular or both popular antics and self expensive if you drop them you may lose a client or two but keep your salon business.

Always being on sale

it’s very easy to fall into this trap of offering specials to for new bit business and getting caught in a cycle of being seen as the bargain salon in town. Additionally the new customers that you capture with low prices will continually be bargain hunting clients who will not either be loyal grow into profitable customers and are disloyal because they will follow the next cheaper deal offered next door.

I’ve seen salons fall into this trap by using daily deal sites such as group on for special promotions. Try to avoid these as much as possible because in the long-run you make very little money and wastes a lot of time and effort and reputation in the process.

Marketing without measurement

it’s great to be continually marketing your salon your services your target audience but you need to be sure to be tracking the costs and benefits of each activity

in the past it was easy to place a local newspaper ad and no that your new clients from that week came directly from that newspaper ad.

However in today’s multimedia Internet fueled the economy that is no longer the case. Note

measure all of your marketing activities from Yellow Pages to Internet directory listings social media as and newspaper print ads dollars to dollars spent to actual dollars earned. Remember though to calculate not just the first service purchased by your new clients but the lifetime value of that client to you as a salon

add link about lifetime client calculation here

one of the most valuable and cost-efficient marketing methods today are quality websites and email marketing list.

Overspending on high-priced salon brands

every beauty tradeshow features many high price beautiful products and services which you can spend thousands of stock your salon. Don’t be fooled. The majority of these offers while beautiful and interesting are not moneymakers.

Between the cost of set up and displays and inventory which could run into the tens of thousands it will take years and many successful campaigns even break to just break even on that investment cost.

Not investing in relationships

I see many mice align clients working really hard on bringing in new clients instead of focusing on increasing business from their existing clients. It costs less and is easier to sell to existing clients than to try to get new clients.

Get to know who your customers are and what they want find out if they are going to other salons for services that you could be offering such as manicures pedicures massages facials aromatherapy.

Remember you can always upsell a client once they’re in your chair with other services such as highlights, deconditioning, make up applications and brow waxing. Additionally every customer should be shown retail products to maintain their hairstyle and health which will all add to your bottom line more quickly and more effectively than spending a lot of money to try to bring in new clients.

Most salons many salon owners focus on getting treatment training and neglect communication training. I suggest to spend equally as much on communication training for your staff and sales training as treatment training.

Your beauty therapist need to understand how to interact more effectively with your clients and feel more confident doing so.

This type of training will help them be more personable and as a result you will get greater feedback, great online reviews, increase rebooking and selling more retail products.

This training includes listening skills, how to ask the right questions and create a truly personalized experience for each client.

Great salons are built on great client relationships and these need to be nurtured.

Created with Nuance Dragon Anywhere.

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The post Ugly Money Mistakes Beauty Salon Owners Make appeared first on Best 4 Businesses.com.



This post first appeared on Small Business Blog For Entrepreneurs And Startups, please read the originial post: here

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Ugly Money Mistakes Beauty Salon Owners Make

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