Salons and spas are some of the most profitable businesses. Statistics show that by 2024, the beauty salon industry will be worth $190.81 billion.¹ Running a salon is, however, not as easy as it seems. The process is especially tough when you’re starting.
In addition to the starting capital, you also incur countless expenses in marketing, getting inventory, hiring staff, etc. If you’re not careful, your overheads may end up crippling your business. You may even find yourself in debt.
4 Financial Management Tips to Get the Most from Your Business
Over 80% of businesses fail due to cash flow problems.² Your salon doesn’t have to be part of this statistic. By implementing the following financial management tips, you’ll be able to reduce your expenses significantly.
One of the main mistakes salon owners make is hiring more employees than they need. They do this assuming that their premises will always have customers. Keep your staff lean and streamline your hiring decisions.
Only hire the employees you need. Later on, when your business grows, you can hire more. Don’t staff too lean that your salon is in a fix when one employee calls in sick. Find the right balance and enhance the productivity of the employees you have.
Tap Into Your Downtime
Analyze your operations and find out when you have a few customers trickling in. Make use of this time to assign easy tasks that are critical but often overlooked. For instance, instead of hiring an entire cleaning crew, your staff can dust and clean up when they’re not busy. They can also take out the trash, fold the towels, arrange the magazines, etc.
Scaling down operations helps you cut back on multiple expenses and ensures that your employees are always productive.
Take Control of Your Inventory
Don’t make the mistake of overestimating the purchasing abilities of your customers. Overstocking will only leave you with dead stock. Analyze your market and find out how much of your products they need. You should also go through your sales history and identify the fast-moving products.
With this information, you can order the most profitable items. Don’t forget to account for the products that your salon uses.
Maximize on Your Salon Space
You can never fully achieve operational efficiency if you don’t make the most of your salon space. If you have unutilized rooms, consider integrating other related services. For instance, you could get a fat-burning machine and start offering instasculpting services.
For this tip to work, first, conduct audience and competitor research. The research will help you identify the services that your customers need most.
Boost Your Business With the Above Financial Management Tips
As is with most businesses, running a salon can be stressful. It can be stressful, especially when your expenses seem to be eating into most of your profits. The best way to manage this is by cutting down on your costs. If you have a fat-burning machine around, the above tips will be especially useful.
The critical tip is to determine and eliminate the unnecessary costs and then focus on enhancing operational efficiency.
Links to Sources Used
- Revenue of the spa and beauty salon market worldwide in 2017 and 2024 – https://www.statista.com/statistics/1014649/revenue-spa-and-beauty-salons-worldwide/
- The 5 Worst Cash-Flow Mistakes Small-Business Owners Make – https://www.entrepreneur.com/article/249020