I’M WORKING SO HARD BUT NOT MAKING ENOUGH MONEY!
Sound familiar? In this past week I have had at least 40 messages from Industry Professionals using these exact words, so I decided to give a few starting tips towards CHANGING this scenario.
I’m jumping straight into the meat today, so here goes!
1. STOP SAYING OR THINKING that you are not making enough money. It all starts with mindset and thoughts. I can just imagine some of you rolling your eyes now, saying, “what nonsense”, thoughts have nothing to do with reality. Well, you are wrong. The first step you can take towards changing how much money you are making is by thinking abundantly. Remove the words “I’m not making enough money” from your vocabulary immediately!
2. Product is the main expense in any spa/salon business. Check your brand profit margins. No matter how much you like a brand, now is the time to partner with profitable brands that are priced right and that will support you with excellent value promotions that will create sales. I speak to many salon owners who think their brands are profitable. They don’t even consider this until I ask them what their percentage cost of goods for a treatment is. Mostly they’re not sure or they think that 30 – 40% is a good cost of goods. Well, it’s NOT. 10 – 20% maximum cost of goods average is where you should be with retail and 50 – 55% cost of goods retail.
3. Cut expenses. GET RUTHLESS. Look at everything from consumables usage and pricing, laundry costs, insurance, Wi-Fi, rent, staff salaries and so many more. I am sure you are saying I have cut everywhere I can, well look again and go find another 10% to cut.
4. Increase revenue. GET OBSESSED. Sit with your team and until you have a solid plan on how to increase revenue by at least 20%, don’t stop. It IS possible. Retail is a huge opportunity if you have the right brands at the right price with the right margins. Upsells to every single treatment are easy if the team is well trained to do it. sell treatments from most profitable least profitable. Do you have a list like this? Keep a copy at reception and with each therapist so everyone knows which treatments make the most money and therefore which to sell first. Change your treatment offering to meet the “unmet” needs of the market and watch your turnover skyrocket. The bigger the gap between cutting expenses and increasing revenue the BIGGER THE PROFIT. It’s that simple. So, the one (expense) needs to go down and the other (revenue) needs to go up and the middle section (profit) should grow bigger.
5. Training. How much attention are you giving to training as it relates to your team or yourself if you are a solo business? No matter how long you have been in the industry, you simply cannot know it all. What’s most important about training is the moral boost and mental stimulation it provides. It makes you think about ideas and stimulates brain activity.
These are 5 simple but POWERFUL tools you can analyze and implement today and I guarantee you will see a difference in your business in as little as two weeks. But, you need to be OBSESSED and have razor focus.
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Become OBSESSED with your business and OBSESSED with success!!
Till next week,