New Year’s Resolutions for Salons and Spas
As we close out the year and welcome the new one in, we do some things in our personal lives that we really should be doing in our businesses, namely reflecting on the year that’s passed and making goals for the year that’s coming up.
In salons and spas, this reflection is vital for the health of your business.
Because taking a look at several facets of your business will help you plan for a more successful year and prepare you to exceed your goals. Finances, retail sales, average tickets, service numbers, customer satisfaction – knowing your numbers for these elements will help you lay out a road map to the year you want to have.
Here are 5 things to take a deep look at while doing your year-end planning.
This one is a no-brainer. Of course, you want to look at your finances, but what are you looking for?
The first thing you’re looking for is Profits. Profits are anything left over after you subtract all of your costs from the money you earned. It’s easy to see where you are when you take a look at a P&L Statement (Profit and Loss Statement, most accounting software will create one for you).Looking at your profits will reveal a great deal about the overall health of your salon or spa. If you’re in the negative – losing money – you know you need to make drastic changes to bring in more clients, sell more services and provide them with more retail. If you’re revenue neutral – neither making nor losing money – you have a similar task ahead of you. If you’re turning a profit – earning more than you spend – then you can take a look at what you’re doing right and find ways to expand that.
Wait, didn’t we already look at finances? Yes, but we need to take a second look. This time we’re looking deeper than just “how much did we make”; we’re looking for trends in when we make our money.
Break your finances down into quarters and look at which was your busiest and which was your slowest. Can you tell why? Often, quarterly performance can be linked to things like holidays, the end or start of school, the onset of summer, but you may find that your salon or spa goes against these trends from time to time. Knowing this lets you act more aggressively when planning specials or events. You can use promotions like these to lift up the down quarters, driving business when you need it most.
Dig deeper than the quarter, though, and take a look at earnings by month. This is where you may see that January is down, February is up, and March is down, etc. What’s this tell you? First thing it says is Valentine’s Day. Second thing it says is winter. In looking at the first quarter of the year, what can you do to improve January? Specials along the lines of “New Year, New You” or New Year, New Look” or “Start Off Fresh” can use some of that New Year’s Resolution momentum to increase client numbers in an otherwise slow month. And speaking of New Year’s Resolutions, how many people vow to lose weight? What if you offered select spa services – wraps, sauna treatments and detoxifying muds and masks – that would encourage weight loss or a healthier lifestyle? Now January has become a moneymaker instead of a financial drain.
And if you can dig even deeper and look at earnings by the week, you can begin to make subtle, but major, changes to the specials you run, the events you hold, and the ways you serve your clientele. We’ll discuss specials in more depth later.
How many services did your salon or spa perform in the last year? Could you do better overall? Looking at the number of services you provided will give you an idea of just how busy you really are. And, as with finances, if you dig deeper and track each stylist, therapist, or technician, looking at their overall numbers, can you see room for improvement? Sometimes improvement means drawing in more customers and new clients, other times, improving your service numbers means improving your sales process and selling add-ons more aggressively.
Hopefully, you’re selling retail. If not, we need to talk because there is a lot of money to be made in salon and spa retail, especially when you’re moving the product off the shelves and into clients’ arms. In looking at retail, one of the first things to review is your average ticket. What’s the average retail sale? Are you happy with that or could it be higher? Next is profits off retail. Are you making the amount you want off each sale? If not, try adjusting your pricing.
With retail, you can identify trends too. When do you sell more retail? Around holidays like Valentine’s Day, Mother’s Day, and Christmas (plus birthdays and anniversaries), naturally, but when else? I bet you sell more moisturizer in the winter and more moisturizing UV blockers in the summer. I’d also bet that you sell more product (hair, skin, makeup, whatever) when you show the clients the benefits they’ll gain by using a particular thing at home. Looking at retail numbers will help you find times and places to develop specials and incentives and drive up those average tickets and increase your revenue.
One way to increase profits is to decrease expenses. Looking at your expenses by month will help you see when you spend more and help you identify the places where you could tighten up the operation. Look at your utility bills and see where you may be able to make changes. Take a second look at your retail ordering. Are you bringing in products that don’t sell, but just sit in the stock room? What perks do you provide the office? If you’re bringing in lunch for everyone twice a week, cut it back to once; if you’re supplying coffee, buy it in bulk at a wholesale club like Sam’s or Costco.
When we sit down to review the past year, we also have to plan for the year ahead. Be thinking now about what you want to do to improve slow months and ways to take advantage of the busy ones.
And don’t forget to take the time to identify the things that you’re proud of and that you love about the work that you do. Have gratitude for the past year and it will build excitement for the year to come.
You might have made some personal New Year’s resolutions, but what about your resolutions as a beauty professional or salon owner? What can you do this next year to eliminate distractions and truly show up each and every day?
If you want help planning for an amazing 2023, I recommend you get our “Creating 2023 Guide.”
This free download will help you map out your goals and action steps to achieve them. Until next time!
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