Maximising Salon Profitability - Strategies for Success

So, welcome to the salon and team management module. Now, I want to start off by saying that opening your own salon and running a team will not be for everyone, but it is my job to give you the tools, the knowledge, the information so that you can make an informed decision on what is right for you, what's right for your journey and what your next steps might be if you are a nail tech who is fully booked at capacity, wanting to expand their business and want to potentially earn more money. Now, one thing that I will say is that opening your own on does not automatically mean more profit. And that's why I'm starting this module with profitability. In fact, without the right mindset, it can sometimes mean that you can earn less profits, but you'll be earning less profits whilst having more accountability, more potential stress, more people to look after, more overheads and all of these things, which is not what I want for you. So whilst you're taking on all that extra stuff, I want it to be worth your while and I want to make sure that you are making a profit off the back of that. Otherwise, guys, what is the point? Right, so today we're going to make sure that every inch of your salon is working for you, not against you. And if you are thinking of opening a salon, then this is going to give you lots of tools and pieces of information to know whether it is going to be right for you and whether it is going to be an option for you to create profits in this way. So the first thing to understand is that every corner of your salon counts and it doesn't necessarily mean the bigger the space, the more money you will earn. It just means that you have to be doing the most with the space that you have. So one example of that is having an empty desk or an unused chair or space in your salon that could be being used for a desk, a chair, you know, a room or something like that. So you have to make sure that when you go into opening a salon or running a salon, or if you have a salon right now, that you're looking at the space you have and making sure that you're fully maximizing it for profits. So rather than having a huge waiting area that looks great, but also is as a waiting area, could we have a slightly smaller waiting area and potentially have another desk for a nail tech or a lash or browser, whatever it is that you've got in your salon at that time, could you even trial a new service there? Something that's a, even maybe a higher cost savers, something that you might want to introduce in order to earn more profits than what you are earning right now. So every single square meter of your salon could be used to make money. Now one option is, you know, putting a desk there or putting a chair there and renting that out or having somebody in that space as employees. Another option could be a retail corner. So you could sell retail products in your salon space. Things like nail oils, cuticle care, hand creams and things like that. The idea is that you want to have low stock but high profits. So what are the things that you could have in your space that don't cost you too much? You don't need to store huge items, but you could potentially upsell these things to the clients that are walking through the door. They solve a problem of the clients that you already have. And they could potentially mean that the average spend per client is being increased. And even if it's a cuticle oil, let's say it cost you £4 to purchase the cuticle oil, you're selling them for £8. That means that every time you sell one of those cuticle oils, you're making an extra four pounds per client. So let's say you could sell five of those in a week, that's an extra 20 pounds per week, that's an extra 80 pound per month that you've immediately added on to your profits. So these are the things that you want to be thinking about, how can we utilize the space? And the other option is your waiting area. So how can you have a waiting area that is also profitable? So that's where you can bring in, you know, a showcase of retail products or even create mini service add ons. So you could have in your waiting area even a little booklet that showcases the add on treatments that your clients could get. Because what you've got to think is, let's say your client is coming to you for a manicure. They might not know that they can have a luxury hand scrub add on on that manicure, or they might not know that you also do pedicures or toes or whatever other treatments you do. So while someone is sitting there, how can we make the most of that time and that space by upselling or down selling them additional products, services, retail items and things like that. So even putting like nail art samples, if you've done nail art, you could put them strategically out, whether it's photographs, whether it's like a physical little plaque with them on a booklet, a brochure, anything that you can think of that would help you to earn more money, like I said before, salon size doesn't matter because you could have a absolutely huge salon, but if you are not utilizing the space, your profits are just diluting over time. So what you want to do is have a really nice lean space. So the space that you have, you're making the most of that and you're squeezing every last bit of profit that you can out of every square foot. So the next thing you want to think about when it comes to profitability in your salon is your prices and your treatment menu. I cannot stress this enough, less is more. If you have too many services on your treatment menu, your clients will get overwhelmed, they will get confused. They don't know what you specialize in, they don't know exactly what you're offering. There's all these different choices and they don't know they just want the nails done or they just want a pedicure, right? So if we're giving them 10 different options for a pedicure, that's overwhelming, they're going to get confused. And what do we know about confused clients? Confused clients do not purchase, okay? It also dilutes your expertise. So in order to grow a brand that is widely known, that is talked about, that people will come to you just because it's you and your name, you need to be known for something, you need to be an expert in one thing. So by having multiple treatments on your menu, that's really overwhelming for the customer, it also dilutes the things that you are good at. So if you are running a salon, you want to start to think about, okay, what do I want this salon to be known for? Do I want to be the best walk in nail salon in the area? Do I want to be the best exclusive luxury nail salon in Liverpool, for example? Like how can you really stand out as being good at one thing? And then you take your treatment menu and you turn every treatment that you have on your menu into something that's really clear, really easy to understand, really streamlined and it gives the customer exactly what they want, not what they need. And that's really important. So when in biopsychology, when someone is buying something, they want to buy exactly what they want, right? So let's say for example, I want my nails doing, I want a plain set of nails that is going to take me right through my holiday. But you know what I need, right? So you need something that is durable, something that is long lasting, you know, I need a color that isn't going to go wishy washy in the sun, you know, like you Know all of these things, right? So giving your customer what they need. If you start talking about all of those things, it's not going to resonate. But instead if you start positioning your items as something that is going to give them what they want, that long lasting holiday set, then straight away they're going to be like, yes, that's what I need. So you don't need to be talking about the specific brand of product that you're using. You don't need to be breaking down the biosculpture, manicure, gel bottle manicure, all of these different brands. All you need to be saying is do you want a manicure with nail art? Do you want a luxury manicure? Do you want this? And give the customer what they need. It will help you so much when it comes to profitability. Taking choices away means that you become the obvious choice for your ideal clients. You want to ditch any low value treatments. So if you have a treatment that is super low value, is not worth your time and there's no that you feel you can charge more for it, then maybe it is the time that we stop doing those treatments. Because in order to run a salon that is profitable, we want to make sure that every hour spent with our clients is giving us maximum profit for our time. And if you're not doing that, then it's not serving you. We want to get rid. Now the other thing you can think about is how do you increase the purchases of bundles or even memberships for predictable income. So if you are running a column right now or a salon where you have columns and you will just allow your customer to book as and when. It's almost like you're starting from scratch every single month. You don't know that you're going to be fully booked next month. It is your job to go out there and market the treatments. However, if you were to sell something like a bundle or a membership, something that a client signs up to say once a month, for example, you have that predictable income. You could even do a pay in full price so they could pay for the whole year. They know that their nails are covered for the full year, so they know it's already paid and they can come in with the relaxation and the knowledge that don't owe any money at the end of the appointment, but you also know that you've guaranteed that income. So this is also things that you can start to think about if you are running a salon. How can we guarantee a predictable income? How can we get the customer to pay up front? I don't always presume that the customer doesn't want to do that. Especially if your ideal client is giving you signs that actually, you know, your treatments are within their budget. Maybe they would like to pay upfront. Maybe that's an amazing Christmas present or something like that. So thinking about ways you can create predictable income rather than having to start from, from scratch every single month. So what I want you to do now is go away and audit your treatment menu. Which services are bringing you in the most money for the least amount of time. That's what I want you to lean into and that's what you could become known for. Because if you have a treatment, let's say, for example, it's toenail reconstruction, if you have a treatment that you are doing right now, toenail reconstruction, that is earning you the most money for the least amount of your time, well, imagine what it would do to your profitability if every single one of the clients that walk through the door choose that treatment. In fact, go away and work it out. Whatever your highest price treatment is right now, for the least amount of time, whatever your most profitable treatment is, work out how much you would earn. If every single one of your clients choose that treatment, well, that could be your reality, and that is the reality that we want to aim for. So if you're looking at that amount thinking, wow, if every one of my clients came in for toenail reconstruction and I would easily be in 5, 6, 7,000 pounds per month. Okay, well, that's your opportunity. And if you don't want to be doing toenail reconstruction with every single client, you need to make sure that your other treatments are still giving you the hourly rate that your turnover construction is giving you. I hope all of this is making sense. Just want to get you to start thinking differently about profitability. You have choices. And so many people are just running the salon based on what they thought was best at the time of opening it. That's not always the case. And if you're sat here now thinking, oh, God, I've set my salon up and I've made some choices that really aren't serving me, do not worry, you can still make changes. The next thing I want to talk about is hidden costs. Now, so many people run, say they're, they're running a really profitable, powerful nail business. They then decide that it's time to expand. They open their own salon, they have all these plans for how much money it's going to make. And then all of a sudden we get to 12 months in and we realize at the end of the month. I am no better off than what I was when I was a solo nail tech without all of this extra accountability. That is because there are leaks in your numbers. So the first thing you must do is know your numbers. Now, back in module one, lesson two, I gave you a weekly business tracker. And also in your money and finance module, I gave you a tracker that helps you manage your costs, your income, and your outgoings. You need to be using these two trackers religiously, especially if you are a salon owner. What business owner do you know out there that does not manage their costs? What successful business owner out there do you know that doesn't manage their costs? There are none. Right. You have to stay close to your numbers. How can you increase your income if you don't know what your income is? So the first thing you need to do is know exactly what's going in each month to know exactly what's coming out each month, and then understand where are your leaks. What is costing you the most money? What bills are sky high high, what you paying out for that actually isn't really serving you? And start minimizing those things. If there are things that you're paying out for and you're like, actually, that's costing me a fortune and I'm not really getting the benefit of it, it's time to let go. Because everything that you can cut from your costs is just going to feed straight back into your profit. Now, the other thing is doing things like over ordering stock that just expires. Getting shiny object syndrome when you see a new collection come out that you know looks really nice. And ordering it, even though most of your clients are happy with the colors that you've got, or you know that most of those colors are just gonna sit on the shelf. Take note of what colors your clients ask for and lean in to ordering more of those. Do not order full collections if your clients aren't gonna ask for those colors. Give yourself a budget every month, four new collections, four new colors, and don't go over it. Even if there is something brand new in the industry that everyone talking about, you don't need it, you just want it. And if you do need it, then that's an important cost that you can factor in. But over ordering stock does not save you. And it's something you want to put in the bin. If you are doing that right now, the next thing is discounts. And especially if you are about to open a salon or you are stepping into this new sort of era of business, do not feel like you need to discount any of your services. Now I'm happy with you applying discounts if there is a clear strategy to it. And what I mean by that is that if in long term it's going to bring you more money, if applying a discount is just going to mean that you are sat in your seat doing the same treatments but earning less money for it, then I would ask you, why are you doing it? Your time is worth money. You shouldn't need to discount anything. Yes, you can reward clients in different ways. You can give them free add ons to their treatments that don't take you very long but potentially boost your profits because they might ask to pay for it next time and add it onto their treatment, things like scrubs or nail art and things like that. But given discounts we don't need to do it. So try and stay away from just freely giving discounts without a clear strategy behind it. And the last thing is having staff that you are paying but there's no revenue attached to what they are bringing in. Now I'm going to go on to talk about having some staff in your salon and we're going to discuss the opportunity of having self employed staff versus having employed staff and the differences between the two. There are pros and cons with both. But let's say you have an apprentice or you are employing someone in your salon right now, you need to make sure that every single hour of theirs not only is being used, but it's being used in a way that is going to bring you a return on your investment. And by your investments I mean their wages. So let's say you're paying someone 15, 20 pounds an hour. The jobs that they are doing should in turn be bringing you around 15 to 20 pounds an hour back in profits in some way. So it should be either freeing up your time so you can focus on the business instead of in it, or have a rest because rest is productive too and it will help you be a better business owner. Or it should be front facing with clients so that every hour of their time is bringing in money through clients paying for it. You pay them a wage and you get to keep the profits on top or helping you out in some way towards your vision. So whether that's, I don't know, it could be a cleaner for example, they should be keeping the salon clean and tidy so that allows you to continue being the most luxury salon in the whole of Liverpool. Or let's say you have a receptionist who is answering the phone and responding to all social media. And website inquiries within an hour. That is helping you stick to the high standards you've set within your vision of being the number one salon in, you know, Manchester or whatever it is that you want to be. So you want to make sure that if you have staff, you are utilizing every single hour of their time and that also they are bringing you a clear return on investments. And I'm going to talk about how to motivate your team and how to keep them bringing you that return on the investments later on in this module. But this is just a little bit of food but thought as we dive into the pros and cons of actually owning a salon. So I want you to think of your profitability like a bucket. It doesn't matter how much that you pour into it, if there are holes in the bottom, you're gonna have leaks and that will lead to you not running a profitable salon. So if right now you have a salon and it's not making enough money, I want you to start thinking about each of these things and I want you to start identifying where your current leaks are. Now the other thing that we've sort of touched on before is upselling and I want to just go into this in a little bit more detail. Now, upselling just means increasing the average spend of your customers. So when they're coming in for a manicure that is worth, I don't know, £50, how could we get it so that when they leave they've actually spent 65 pounds or 70 pounds or maybe even more? We put so much emphasis on getting new clients through the door. We don't put enough emphasis because on looking after the ones that we've got and nurturing those existing customers to actually just spend more when they are with us. How can we strategically bring in more treatments that are of a higher value? How can we strategically bring in products that solve the problem of our existing customers so that when they're in the salon, of course they're going to buy it because that's what they want and it doesn't even need to be nail related. So it could be, for example, the salon that I go to, their vision, it's very asking aesthetic. It's very sort of Gen Z vibes. It's very much really on trend nail art and that kind of vibe. So they also have a corner of their salon where they sell really on trend costume jewelry. Now, it's not highly priced, however, it's not low priced either. And it literally every time I go in there, I usually buy a ring or A necklace or some earrings or something like that. Because it's exactly the type of stuff that I like because I like to get nail art, right? So because I like to get nail art, I also like dressing up my hands. They know that. And because they know that they're gonna start solving my problem in order to grow their profitability. So every time I go in there, I don't just get a manicure, I also buy a piece of jewelry. So that increases the price that the cost that I'm spending whilst in their salon. So it's upselling but without the pressure. They don't even tell me that that jewelry is there. I walk in, I see it, I get to the till after I've had my nails done, I try on all the rings and I usually buy one. So there is no pressure from them, but they just know me as a customer really well and it helps them to grow naturally. So retail suggestions, you can be doing the nails, you could maybe say, oh, use this cuticle on your today, you'll love it at home. Or this is what's going to help your nails last longer. Or if you use this every day, you won't need to come again for another four weeks. And things like that, that you can position it to the customer, no pressure, just letting them know the benefits of using this cuticle oil and why they're going to want it. Things like add ons so quick nail art upgrades or hand scrubs while polish dries and things like that. All stuff you can just casually be explaining to the customer or membership so you can encourage rebookings, give stability for you and convenience for them. So did you know that I do a membership program now? You literally get first access to all of your bookings. As a regular customer you get one appointment every four weeks and you get XYZ features as well through having a membership. Upselling isn't pushy when it gives your clients a better experience. So if your clients are, you know, busy working professionals, maybe a part of their pain points when they are booking appointments, it's like they don't want to have to go online, use the booking system, book an appointment every time they want one. They might just want to know that on the first Wednesday of every month they're getting their nails done, that might be the type of ease that that ideal customer wants. So if you can give them a membership where they can either pay up front or pay monthly for that, but know that that's guaranteed and they don't even need to message you or book in that might be the convenience that they are looking for, that gives them value that actually is priceless. So I want you to start thinking about all of these things and remember that upselling isn't pushy. You just want to think about the client's experience and how can you give them extra things that grow your profits and make their lives a lot easier. And lastly, profitability isn't about being bigger or being busier. It's about being smarter with the space that you have, being smarter with the services that you offer, and being smarter with the systems that you have in place. So before we dive into the next lesson, I want you to sit and ask yourself, maybe journal around this one point. What is one change I could make this week that will bring me more profit without adding more hours? So I don't want you to give any more of your time. I want you to be strategic with what you have in place already, and I want to want you to come up with one change that you could make that could help you earn more from the customers that you already have and the time that you are already given to those customers. Have fun with that and I'll see you in the next lesson.