Coming back to work after the holiday rush always makes me think about the past year: did I make more money? Did I grow my business? Did I achieve any of my goals? If you just heard a little voice ask: “What goals?” - pull up a chair, we need to talk.
January is the time to sit down and analyze what happened in your business last year, to start planning what you want to happen in the upcoming year and to set some achievable goals. It doesn’t matter if you own one salon, five salons, or simply rent a chair, there are universal key metrics you must consider. So book an hour or so of your time to sit down in front of your Shortcuts system or whatever software you use and go through the following exercise.
First, pull the following data from your software and note it all down, including what your instincts tell you. Watch for patterns and then think why they exist. Can you marry up stats up with incidents you remember in the salon? This exercise is all about making you think and analyze what’s going on in your business. Let’s get started with these key metrics and the questions you should be asking yourself.
Clients: how many and how they behave
Aim: to understand your clients’ booking habits.
Goal: to pick an area – say, referrals – and decide on one thing you can do it improve in 2014. Ask yourself:
1. How many clients did you or your business average per day/week/month last year?
2. How many were new? How many referred by existing clients?
3. How many never came back? Do you know why? Was it price, customer experience, technical ability of the stylist, colorist or therapist? How many of your clients are booking online or using some sort of mobile/remote access to you?
4. How many are so in love with your salon they always rebook a future appointment before they leave?
How many of your clients are booking online or using some sort of mobile/remote access to you?
Services: what you did on those clients
Aim: to identify your strengths and weaknesses so you can be more focused
Goal: to choose a key service and plan a campaign to increase sales.
1. What are you and your team are spending time on?
2. What is the average number of services each client receives?
3. Are there a few services that are core to your business model? Manicures/cuts/color/etc?
4. How many of your clients have color?
What percentage of clients are leaving with at least one retail product?
Total annual revenue – how much did you generate?
Aim: to recognize that changes in revenue do not necessarily lead to relative changes in profit.
Goal: to decide what changes you could introduce that will have an impact on salon and personal finances.
1. What was the total value of services performed last year vs. this year? Up or down?
2. What was the total value of products sold last year vs. this year? Up or down?
3. Look at it as a gross figure, net figure and before commission – however you want to look at it. The point here is to know not just what you made, but what you got to keep and what you spent.
4. Were you able to keep a cap on your spending and see profits rise? Your annual revenue may have increased on 2013, but we saw a lot of rising costs.
On this cold dreary day in January, I hope the time spent reflecting on the past year will prove hugely valuable as 2014 unfolds. Today’s technology can capture so much detail about your business: individual performance, client activity, business productivity - and it’s available on many types of devices. This gives us a chance to recognize what is and what isn’t working and to give yourself permission to make changes whatever they are.–Debbie Miller, Enterprise Relationship & Education Support Manager at Shortcuts Software