*6 min read
[Part 1 of 3] In this blog series, we will help you avoid the same mistakes that so many salons make, over and over again.
How? By giving you the tools and instructions to do what most businesses pay thousands of dollars for – an individualised, in-depth review of YOUR salon. This will allow you to spot problems and begin solving the most important ones straight away.
Before we get started, we need to define ‘fail’.
Some salons have to close down – I’m sure we would all agree that this is ‘failing’ in the conventional sense. However, lots of salons manage to stay open, but don’t make their owners any money. You may not need to shut your doors, but are you actually running a successful business? No.
To be successful, you should be able to pay the rent, pay your staff, pay yourself and still be able to spend time with your family and doing the things you enjoy! Unfortunately, most salon owners will never realise this reality.
It’s not just salons. Every small business owner faces an uphill battle for survival. In fact, financial giant Bloomberg estimates that up to 80% of all new small businesses fail within 18 months! That’s huge.
There are many excuses for these failures: outside market conditions (such as new competition or unexpected increases in the cost of doing business), financing problems, tax-related issues, poor planning, mismanagement and the list keeps going.
Here are some of the most common reasons salons fail
- Failure to clearly define and understand your market, your customers and your customer’s buying habits.
- Failure to price your products or services correctly. You can be the cheapest or the best, but if you try to be both, you’ll fail.
- Failure to anticipate cash flow adequately. There are lots of reasons that cash flow becomes a problem and if you aren’t prepared it can surprise you at the worst time.
- Failure to anticipate or react to competition, technology or other changes in the marketplace. When you’re busy, it’s easy to look the other way while things around you are changing. Imagine you are trying to cater to a young, trendy crowd in a community where the population is ageing. It won’t be long before you find yourself in trouble.
- Believing you can do everything yourself. This is one for those of us who have employees. You can’t do it all yourself. There comes a point where you must rely on those who have proven they can handle responsibility and make things happen.
So why do these problems occur? How do successful salon owners ensure that they don’t fall into any of these traps? There are two simple answers:
- They dedicate time to learning basic business skills that they didn’t learn at TAFE or during their apprenticeship. It’s a deadly cycle as many salon managers do not have these skills and therefore cannot impart this knowledge onto the next generation.
- They are willing to spend the time & effort to do a full salon review on a regular business, to ensure they are tracking.
What is a salon review?!
You’ll see that all but one of the above-mentioned reasons, begins with “Failure to…”. This is because all of these problems can be avoided, but in order to do so, you need to identify there are problems in the first place.
The way the best businesses in the world do this is by employing very clever consultants, accountants and lawyers to look at their business and tell them what is going on. Unfortunately, we don’t all have that luxury.
That’s why we are going to not only tell you how to do a full salon review, but give you easy step-by-step instructions that will reveal the secrets of how to complete a professional salon review.
Ready to get started? It’s time for Part 2 of this series!