Where Do You Think You're Going?

Where Do You Think You're Going?

I used to laugh when I meet someone new, and they asked what I did for a living. “I own and operate a spa.” I would say. Then I'd wait for it. “Oh! That must be such a relaxing job!” they would reply, eyes bright and imagining working in a candle-lit room, listening to spa music and giving a facial. Yes, that sounds like it would be an amazing career! LOL. Nothing could be further than the truth though.

How Rapid Salon Growth Took Me By Surprise

How Rapid Salon Growth Took Me By Surprise

Two years after I sold my 3 room, 7 staffed spa, I moved to tiny little sea-side town on Vancouver Island and opened my third esthetic business as a single owner/operator model. By the time I completed my first year in business in 2007, I had a full, happy clientele and a booming bank account. However, I quickly became a victim of my success three months later.

I was so good at generating new clients that nobody could get in for an appointment for three months.

Now…you may be thinking, “I wish I had that problem!” but I want to explain why having such rapid growth came at a price and how you can avoid my growing pains.

 1.  I was overworked with admin and non-billable duties.

You need time to develop business systems that will ease your workload. The systems you use right now may not be scalable when you are fully booked.  For future ease, plan for bringing on digital systems that can handle the mundane administrative work you shouldn’t be wasting your time on. Or start researching companies that you can contract the work to.

I finally hired a laundry service to relieve my workload, signed up for a new booking/POS system that was more efficient and did a trade for my bookkeeping needs. This allowed me true down time outside of salon hours.

 2.   I hit a ceiling with my earning potential.

As you are slowly growing, that is the best time to think about how you will increase your earning potential....and then Make. A. Plan.

Will you build a larger location? Are you budgeting for that? Will you hire staff?  Don’t be that salon owners who throws new hires on the floor with very little training and wonder why you have high client and staff turnover. Unsexy but essential business strategies and systems will need drafting: business plans, policy and procedure manuals, training protocols, and salon systems. All of that development takes a huge amount of time to prepare for successful growth.  Why not start those now?

If you don’t want to hire staff and choose to keep it small, how are you going to leverage your time? Will you raise your rates? Become specialized? Working longer hours won’t be an option at that point, or you’ll quickly burn out.

I chose to drop the services that were not popular, hard on my body, took too much time to set up & clean up or were just not enjoyable to me anymore. By removing them, I opened up my schedule for the treatments truly I loved doing (waxing) and were much more lucrative per hour.

My advice? Consciously decide how you are going to work smarter, not harder.

3.   I was completely exhausted.

At the beginning stages of building my clientele I could be much more flexible with my schedule. But as I got busier I had to learn how to say ‘no.’ By then I was also a single mom, and it was important for me to be physically, mentally & emotionally present for my son and I was not willing to comprise that part of my life.  Saying 'no' to the extra booking requests was really hard, but I needed to stick to my hours so I could have longevity in my career.

When I realized clients couldn’t get on the books for three months, I stopped taking any new clients and waited for attrition to happen in my business.   It took approximately one year for my schedule to get to a place in which I felt more balanced. And when the recession hit here in 2009/2010, I simply stepped up my client attraction tactics to begin the building process again.

The bottom line is; use the extra time you have while your business is growing to design it in a conscious way. And if your business does happen to explode with 10x the clients, you are prepared to handle the scale with grace and professionalism.

No one can predict the future, but if you can embrace your slower growth periods to make plans for a scalable business, you will be able to protect your energy, keep your passion and still allow for higher earning potential for when rapid growth hits!

Are You Following The Blind?

Are You Following The Blind

I find it incredibly uplifting to see salon & spa professionals congregating online and supporting each other in their entrepreneurial journey. I’m specifically referring to the closed Facebook groups created for the sheer desire to connect, build relationships and help with each others businesses. What do I love about these groups?

In the past few years, these closed Facebook groups have become a safe-haven to share our most vulnerable worries, our rants about demanding clients and our wish for an easier way to run a business. It often feels like a refuge from the heavy toll of entrepreneurship and reinforces our desire to collaborate with like-minded individuals.

However, there is one thing about them that has me worried...bad advice is often inadvertently served up. ☜ Click to Tweet

It pains me to see that some of the instruction that is being shared is definitely NOT in your best interest. AND, you may not be able to recognize that it’s poor judgment because “you don’t know what you don’t know”.

Recently I saw a post by a single owner/operator who had pulled her non-returning customer report for the year and was dismayed to see over 20 people came for one treatment and did not return again. She was feeling ashamed and didn’t know what to do about it.

The advice that was given by other members of the group was a mixed bag. Some people gave great ideas about how to bring these guests back into her fold (yes!). But most of the comments landed along the lines of “Don’t look at those reports, they will just make you feel bad. I never look at mine.”

WHAT??!! *Palm to forehead* If that report were not important, it wouldn’t be there!

This is the exact kind of situation where you need to be cautious with any professional support groups that are not being moderated by an expert.

In all fairness, those giving the unhelpful advice don’t mean to be derailing your success…they are simply being triggered by their insecurities and lack of business strategies.

So in the spirit of using ‘what works’ and ditching ‘what doesn’t’, I urge you to become a strong critical thinker within your business. Sure, ask a question in your group to find out how other salon professionals are handling the same situation. But THINK deeply about the ramifications for you and your business with each answer.

Then and ask yourself: Will burying my head in the sand help me find an answer to what is going wrong here? Or could digging deeper into an embarrassing situation lead me to an opportunity to that will build big trust between those guests and I and, as a result, create 20 more enduring and loyal customers?

Dig. Dig. Dig. Weed out the comments that may, initially, seem to make life easier for you (or stroke your ego), but which are actually hidden minefields.

The effort to critically analyze your options is worth it in the long run. ☜ Click to Tweet

If you can’t seem to sort out your dilemma, go straight to an expert and book a time to chat. Otherwise, you may fall into the antiquated paradigm of business practices that has plagued our industry for decades: the blind leading the blind.

How to Buy a House With Your Tips

How to Buy a House With Your tips

When your salon guests receive a service from you, they usually leave a gratuity as an extra “thanks” for taking great care of them. Service providers love having a little cash in their pocket at the end of every day. A stop on the way to work for a Starbucks, a cute pair of shoes at the end of the week or a night out with friends are all fun ways I used to spend my tips.  Until I realized how irresponsible I was being.

I want to tell you why this “Latte Factor” is a really bad idea.

Truth: Our industry is one that is highly dominated by women. Further, we are often do not make enough money to be the main revenue generator in the family. I’m disappointed to say, when we don’t work smart in this profession, making a strong, sustainable single income is almost impossible.

Truth: As far as gratuities go, cash tips given by guests are often not reported as income by the employee.

Truth: Gratuities given via credit & debit cards are sometimes ‘cashed-out’ by the salon owner and given as cash to the employee at the end of the day or week and are not accounted for on the employee's taxes.

Truth: Giving and receiving cash tips is WAY TOO EASY to be financially irresponsible for both staff & employers! <- Click to Tweet

Could you tell me, off the top of your head, how much you made in tips last year?

I didn't think so.

Service providers often look at gratuities as ‘free money’ with no regard to its legalities or it’s accumulative power.  Huge mistake...and I'll show you why.

Take out your calculator and tally up what you would have made in gratuities last year.

Let’s say you had a decent clientele: booked 70-75% of the time, 7 hrs per day, 5 days a week, 50 weeks per year with average service revenues of $1700/week ($340/day).

That’s $87,500 per year in sales.

I find my gratuities average at 15%, so based on that number and if that’s the same for you, you could be generating about $13,000 in tips for one year alone.

If that $13,000 were claimed on your income tax, it could be the difference between qualifying for a mortgage or, sadly, being turned away by the broker.

…Or being denied a loan for opening or expanding your business.

If you saved your gratuities instead of frittering them away, the difference could be a pre-paid tropical vacation that you’ve been aching to take your family on.

…Or being able to upgrade your vehicle.

…Or having savings in the bank for an emergency.

By the way, do you remember WHAT you spent your cash tips on?  <- Click to Tweet

So service providers...could it be time to put on your big-girl/boy undies and start being responsible for your unaccounted income? Beside it being illegal to NOT claim your gratuities, you are losing out on some big opportunities.

And salon owners, you don't get off scot-free on this one.  You MUST include the staff gratuities that come through your business on your employees pay checks to keep you out of hot water with Revenue Canada or the IRS.

Do just do what is easy...do what is right.

Tip: I highly recommend David Bach's book called "Smart Women Finish Rich" or "Start Late Finish Rich" to get  your own financial responsibility on track. It's an easy read and I've personally followed David's as guide to becoming clear on how to be smart with my income.