How to Make Your Salon Spa MORE Profitable

Stop the LEAKS (and keep your $$$)
Christopher Brazy

Feel like you’re on a sinking ship? Doing alright but would like more profit? I know of a spa that does over $800,000/year and ONLY takes home any money at all because she does services herself all day.

We’re so busy trying to get new clients we don’t even know if they’re helping us stay afloat. A bigger boat with more people/clients on it will still be sinking if it’s got leaks. What we should be focusing on is stopping the leaks. Streamline your business and make it as profitable as possible BEFORE you try to get one more client through the door. Don’t fixate on expanding your client base until you maximize your profitability. Below we’ve give you some ideas on proper mindset and how to start.

So what’s the best way to keep your profit? It’s not by making more sales. If you’re working for free or worst yet, LOSING 5% on each sale, more sales would be more loss! START by minimizing your expenses. If you’re only making 5% per dollar imagine how much easier and nicer it would be to make 25% per dollar. Every sale would go 5 times further since you’re keeping 5 times as much.

Fixed expenses you can look at, but there’s often little you can do with them. Perhaps you could renegotiate your rent, or try for a smaller lease payment, but that should be done after you’ve revamped your major expenses, which are most likely variable expenses. Start with this, create a list of your expenses and prioritize them from highest to lowest. Then get to work on the highest expenses.

In our industry, payroll will most likely be your highest expense. Others (including myself) have been blazing the way for you to be able to lower your staffs pay. The “salon model” of 50% is long gone. 50% AFTER expenses would be fine, but that’ be closer to 5% and quite a paycut! There’s other models to follow. There’s hourly, like the rest of the nation. Offer your staff $12+/-/hour and you’ll have no problem filling the positions. If you stay on commission, then try something that works out to around $12/hour (20-30%? it depends on how busy you are). After tips and retail commissions they should still be around $20/hour which is more than fair. There’s a related article link below on how to switch staff pay over if that’s where you choose to start.

Go through your list of expenses, high to low, and see what you can trim. Do you need 2 locations? Do you need to be open 7 days a week, 12 hours/day? Can your staff help out with cleaning and clerical duties? We’re all in this together, if you can’t make it they won’t have a place to work. There’s also other ways to keep more money aside from cutting your expenses. Rescheduling is key (that’s why membership plans are so nice). Retail is crucial. Motivating staff via monthly meetings, quarterly trainings and sales contests make a difference. Making sure the front desk is never saying “no” and always getting people in, or getting their information so you can build your list. Whoever answers your phone can literally make or break you.

Now hopefully you’ve got a better mindset. Get a pen, find some alone time and make your expense list. Pick out the top item and decide what you’re going to do about it. It’s up to YOU to start and WE can do it together.

Leave a Reply

Your email address will not be published. Required fields are marked *