HAPPY NEW YEAR
Welcome to, not only to the New Year of 2020 it is also a new decade. What have you achieved in the last year and for those of you brave enough to go back that far what has your journey been in the last 10 years? I have many clients that I have had the pleasure of working with for 10 years and I smile when I think of what has been achieved.
Based on the trading for the last 6 months of 2019, I am confident that we are heading into good times again. As I move around our industry, I hear some people say “everyone is really quiet” Not in my world. I want to tell people especially company reps, to please not share THEIR negative view. The many salons that are doing well and continuing to get growth on growth are all working hard on their business to achieve. No magic formula just work, in and on your business.
The 5 biggest points that I believe you will need to get right for success in 2020 are:
- Invest time and energy in building and retaining a strong team. Staff loyalty means client loyalty. (I have lots if ideas for this)
- Marketing needs to definitely be focused on social media but you need some other key strategies. (you can’t just do social media)
- You must look at your profit and loss monthly and control every single expense. Profit is the difference between the $’s that come in and the $’s that go out
- Devote business development time each week. YOU WILL NEVER ACHIEVE WITHOUT THIS
- Your energy =20%. I know that what you put in you get back. One of my roles as a coach is to help you to have great energy, so you have what you need to give to all parts of your business
EVERYONE WANTS TO KNOW WHAT GOOD SALONS ARE DOING TO BE GREAT
During 2019 I coached almost 100 hair and beauty clients, so I have a good overview of the industry. However, it should be noted that the results I see with my salons are stronger, because no one undertakes to work with a business coach unless they want to improve and grow, and this means they are more focused and prepared to do what is needed. Add to this the accountability that comes from coaching which is a big benefit and you have a formula for success.
Summary of some key results for 2019
Growth overall was exciting. Established salons that I have coached for many years still saw 8-10% growth with many others seeing way more. A few superstars had growth in excess of 50% and that was already established businesses, not new salons.
Retail growth, which I know is not trending upward generally in our industry. I am proud to say that I did see some good improvement. This resulted from much focused marketing each month (mostly in salon), team incentives and not taking our eyes off the ball. Also needed a strong commitment from managers. I am seeing figures on average in hair at 10 to 17% and in beauty 15 to 30%
New client numbers for established salons sat between 5-15% which I was happy with.
Rebooking rate was consistent at 60-75% with some stars doing well over this. This did show decreases because of on line bookings.
Retention rates were also something that I focused on in 2019 and I believe the awareness created by this was really valuable. My big concern is that new client retention in many salons is below 30% and this means we are not retaining enough new clients. If you aren’t tracking this please start to do so. Overall retention is sitting at 65-75% with many good individuals in the 90% group.
SHOULD YOU HAVE A PRICE INCREASE IN 2020?
The answer to that question is most definitely yes.
During the year do you expect that your expenses are going to increase?
- Do you have a rent increase due?
- Electricity…hasn’t that just gone up a big whack
- That always goes up
- Product… of course that will go up
- The big one wages
If you don’t have a price increase the reality is that the only other way you can pay for these additional costs is to take them out of your return on the business, which we call your profit…which of course is a no/no.
The main purpose of being in business is to make as much healthy profit as you can.
There are one hundred cents in every dollar that you receive from your clients. If last year you were able to pay all your expenses and have some left over and if this year you do not have a price increase and all the expenses have increased, you still only have one hundred cents in the dollar, so the inevitable is that the amount left over is decreased.
Most salon owners who are good at managing their business and who are fully aware of their costs and margins have no problem in making the decision to increase their price. It’s quite obvious to them that it is necessary when they analyse their business.Share: