Salon Business 2024-2030: The way to profits
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How can the manager of a modern beauty salon create a profitable business?
1. A modern beauty salon, cosmetology centre and SPA, as a rule, combines three directions, namely production, service and trade.
The provision of services is essentially production. Service is customer service before, at the time of and after the visit. The sale of cosmetics and related products is trade. In fact, one small business includes three different businesses, which differ from each other in marketing features, working models, processes, accounting principles. Keep these in mind, please.
2. Time is the only non-renewable resource for a beauty salon.
An example of calculation. 9 working hours per day, 10 workstations in the salon, 1.5 hours one treatment = 6 clients per workstation = 60 clients per 10 workstations a day. Add to this the cost of each visit and you get real money.
Time is an essential part of any service. It is impossible to create a haircut, colour, manicure, treatment or massage without scheduling a time slot. A client's booking to see a specialist means that this time won't be reserved for someone else. In running a beauty salon, time is always primary. The process of providing a service will always look like this. Firstly, the client has scheduled a visit for Thursday from 16.00 till 17.00. Secondly, a service is being selected for this time. Thirdly, the specialist providing the service is being identified.
Time management is the main task of the manager!
I often hear from private practice masters (freelancers) the phrase: "I work on my 15 metres". In reality, a freelancer works on his or her "own" 10 hours. That's why many freelancers have trouble developing their business - not having time to stretch to their full height, they immediately hit the ceiling, even if they work in a beautiful space and have a large client base. That's figurative, of course, they hit a financial ceiling.
3. Obediently following the common stereotype that "a client goes to the master" is a delusion and reality at the same time.
The client goes where we lead him.
If we lead to the master, he follows the master. If we take him to a beauty salon, he goes to a beauty salon. Business leads the client, not the other way round.
A beauty salon makes money from selling time and products by controlling variable and fixed costs. In order to stop selling masters, you need to develop products.
A product is a wider definition that includes the service itself, technology, time, price, warranty terms and so on. For example:
"Volume eyelash extensions Flirty 2D. Two synthetic eyelashes are attached to each natural eyelash. Stunning bushy eyelashes make the look spectacular and incredibly attractive. And you look like a million! Guarantee 7 days. 2 hours, $120" - is a product.
"Manicure + gel nail polish, 1 hour 30 minutes, 10 days warranty, price $49" - is a product.
"Haircut + colouring + styling, 3 hours, consultation, pre-booking of the visit time, possibility of cancelling the appointment 24 hours in advance, price 230 $" - is a product.
"Make an appointment with our new master Monica at a 30% discount!!!" - is a sale of the master, which sooner or later will negatively affect the business. This is an undeniable fact.
4. Creating service protocols with timing is a basic action that should be implemented before opening a beauty salon and later improved.
Without protocols, the manager won't be able to manage time, create products, understand what kind of staff the salon needs and how to teach them.
In addition, protocols are a basic element of the service and staff control system in the salon. They are part of the SOP. Without protocols, we can't calculate the production capacity of each workstation for each direction, i.e. the maximum number of hours we can sell in one single working shift. Also, without protocols, we can't create technical regulations for the salon administrators to record clients.
Because of the lack of protocols for each service, beauty salons lose 2-3 hours per shift at each workplace. And incorrect protocol development (for example, each of them includes 15-20 minutes for master's rest or client's being late) leads to artificial decrease of beauty salon's production capacity.
5. A modern beauty salon operates according to standards of service and service realization, strictly following protocols, flow charts and customer service regulations.
There is no other way to create a sustainable and controlled customer service system. If there are no standards, you have no right to promise clients quality services and customer care. If there are no standards, the salon is selling masters. 5 masters = 5 different manicures. What kind of quality can we talk about? I see how you want to tell me that the salon or clinic are not a factory or an assembly line. But the truth is that protocols, SOPs, automation of service processes are exactly what creates that magic service. And they do it not from case to case, but always.
6. If time is the most valuable and non-renewable resource, we understand that it must be sold in the whole volume.
But not all time in the salon is equally demanded by clients. In different months, on different days and at different periods of the day, there are more popular and less popular time with clients. And the salon needs to sell 100 per cent of the available time. For this purpose, dynamic pricing is used, i.e. selling time at various prices. For this purpose, appropriate products are developed.
Dynamic pricing is not yet very common in the beauty industry. Few managers understand the idea of selling time, and even at different prices! "We can't sell Monica, and here it is..." But for modern and technologically advanced beauty salons, dynamic pricing is already common practice.
7. A business model is not the same as a beauty salon, cosmetology centre or SPA.
A business model is a specific way for your beauty salon, beauty centre or SPA to create customer value. The business model identifies what particular value, for what particular customers, with what resources and in what way the salon makes money.
In the book "We Have Opened!" my interviewee asks in amazement: "Well, what kind of business models can beauty salons have? You come in. Get a haircut. Leave." Exactly so, this is one of the common business models, and quite successful, if you stick to it. Sometimes it goes like this: "Signed up. Came. Got a haircut. Gone." This is a completely different business model.
"Purchased a season pass for the course. Scheduled visits. Visit." - is another business model. Or: " Made an appointment for four services that are being performed at the same time. Arrived. Had a manicure, pedicure, haircut and colouring done at the same time" - a very forward-looking business model.
We are used to the fact that in a typical beauty salon the administrator keeps an appointment with a particular master. It is possible to continue to work this way in the future. The question is different - how long will your business be able to survive?
8. It only makes sense to open a business in the beauty industry if you have a clear idea of how to improve the lives of consumers of beauty salons and clinics.
Do it only if you are able to create something new in your chosen field. Do it only if you are able to create new service technologies or improve existing ones. Do it only if you are able to find and motivate people who can do it together with you.
About the author
My name is Nataliia Honcharenko. Since 2011 I have been the founder of The Concepts. Beauty Business School (Ukraine) (until 2020 the school was known as Beauty Salon Boss). For 13 years of the business school's existence, the formation of various programmes allowed more than 5000 owners, managers, administrators and masters of beauty salons, cosmetology clinics, SPAs and also specialists of distribution companies to improve their professional level.
The books "The Perfect Beauty Salon Manager", "My Beauty Salon" and "We have opened!" also belong to my authorship. They are read in 35 countries around the world. Presently, I am starting work on a new book in English, "Managing the Modern Beauty Salon".
In 2017 and 2018, I won the "Stella International Beauty Awards" ("Best Beauty Education Company in Ukraine" and "Best Business Development Consultant in the Beauty Industry of Ukraine"), which also characterises me as an expert worthy of your edition's level.
Since 2013 I have been accredited as a consultant in the field of "Operational Management of Beauty Industry Companies" in the Small Business Support Programme of the European Bank for Reconstruction and Development (EBRD), which gives me the opportunity to consult companies within the grant projects.
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