One of the most important steps to making any business profitable is setting and monitoring goals, not just for the business but for employees too. It sounds obvious—and simple—but it’s a process many salon owners have trouble grasping. Yet without goals you risk your employees wandering aimlessly around without ever knowing if they are performing adequately and/or meeting expectations. If you want to be more profitable (and who doesn’t?) you need to focus on some key areas and, believe it or not, your salon’s Point of Sale system has everything you need to get started.
Areas of focus. One of the hardest parts of setting goals is figuring out what is important. While some salon owners might consider the need to wash every towel each day a necessity, this probably isn’t the most pressing issue when trying to increase profitability. If you’ve decided you want to make more money, there are three sure-fire ways to do just that: get new clients, get them in more often, and increase the dollar amount of each ticket.
Using Your POS. If you only open your Point of Sale system’s reporting feature when tax time rolls around, things are about to change. The first assumption salon owners make when their salon isn’t profitable enough is that they need to get more clients in the door, but reports may reveal that your stylists are completely booked and can’t handle more clients. It may also reveal that their average ticket total is down or retail sales have been lagging. These reports also serve as a way to monitor your progress and re-evaluate goals in the future.
Start settings goals by reviewing all the reports that relate to the three focus areas. Look at the number of new clients, rebooking frequency, average dollar per transaction, and year-to-date versus last year’s sales. Then, start to drill down into specifics. If you notice that this year’s sales are down compared to the same period last year, look at your marketing calendar to check if you had a successful campaign that you missed this year or maybe one of your top stylists’ numbers have started to take a dive. Once you figure out specific problem areas, you can begin to formulate ways to fix it.
Motivating Your Staff. Setting a generic goal isn’t enough to get your salon on its way to being more profitable. Make sure you’re on the right track with targets that motivate your staff toward profitability by ensuring your goals are always:
- in line with your salon or spa’s mission and culture
- clear and easy to understand
- easily measurable (increase profits by 20% is measurable, make more money is not)
- and challenging but achievable.
Once you’ve determined the goal(s), the team must be aware of what they’re working toward and your expectations of them. But don’t leave your staff to go it alone. Coaching the salon on actions and behaviors that target results is just as important as setting the goal itself.
Paul Tate is CEO North America at Shortcuts Software, which provides top-level software to salons and spas across the world, offering software solutions in nine languages to more than 12,000 clients in 46 countries.