How To Properly Manage Your Salon And Make It Profitable

Glean top tips for effectively managing your salon to keep costs down—and profits on the rise.

Blp2109 Salon 850x425

Hair artistry was only the beginning. To run a successful salon, owners and managers must go beyond the art of cutting. Business acumen, resourcefulness and solid interpersonal skills are among the qualities needed when it comes to keeping tress studios on track. Tim Howard, former owner of two award-winning salons (Tectonics and Sound, both in Newfoundland, Canada) and chief innovation officer at Vish, shares his advice for salon management best practices that’ll help boost profit margins.

Knowledge is Power

Team members are a salon’s profit makers, which means training and retaining them should be a manager’s top priority. “Investing in regular, consistent educational opportunities is a great way to keep employees motivated and happy, ensuring you get the best work they can deliver,” says Howard. “In my salons, we supplemented ongoing in-house education with additional opportunities, including external courses.” As team leader, he also fronted 50 to 100 percent of total class costs, then expected student stylists to share what they’d learned with the group upon their return. In addition, don’t underestimate the power of regular team huddles. Fifteen minutes in a circle every morning helps build team spirit while keeping you informed of ongoing salon activity.

Consider Costs

“Often owners forget to look at margins, which means they aren’t examining the balance between prices they set and costs incurred while performing a service,” says Howard. Balayage might appear to be your highest-earning menu item because it’s often requested and represents a top revenue-line profit. But what if each treatment accrues double the cost due to wasted lightener? “Look at every service individually, then adjust prices for services using a higher than expected amount of product,” advises Howard. “Or consider charging for additional product beyond what you include in the service price.”

Retrain as Needed

Salon products, like color, can get wasted in two ways: mixing too much or overapplication. Instances of the latter may be harder to identify, but are essential when it comes to maintaining overall profitability. Howard cites Zazou Salon & Academy in Vancouver, Canada, as an example. After reviewing the cost-per-service and waste accrued by each team member, the owner was able to save $10,000 in six months. “Break down your profit margin by stylist, and you may find some using more color than is required for each service,” says Howard. “That diminishes your bottom line, but it’s an easy solve: The stylist may simply need additional training.”

Use Technology to Your Advantage

“Mention the word ‘inventory,’ and joy immediately leaves the room,” laughs Howard. “But carrying too much product can be a burden, weighing down a business when it must remain responsive and alert to change.” Case in point: Darrell Barrett Salon in Maryland, which had loaded up on 700 units of product, but was only using a total of 378. The salon now monitors every gram used automatically (via the Vish system, though other inventory-management platforms are also available), knowing what colors and items must be reordered long before they run out. “Cutting back liberated them from paying upfront for product the team might never need,” says Howard. Importantly, the automated process also saved that salon owner time–a commodity we can all use more of!

Booksy, a leading appointment and business management platform, now offers a tablet and web application along with its trusted mobile application in the form of Booksy Biz Pro. This new tablet/web experience is designed to help salon owners keep pace from the front desk, integrating with the Booksy Biz mobile app to give managers and staff members access to core business functions when time is of the essence. @booksybiz

The CLICS System (Color Lab Inventory Control System) takes the guesswork, waste and mess out of color formulation. The computer-controlled dispensing system platform creates both demi and permanent hair color in any shade. The system ensures that you will never run out of the color you need and only pay for the color you use when you use it. @clicscolors

Smart Tools

One way to assist in effective salon management? Tapping the proper resources! Check out these systems that’ll aid in keeping your business on the right track.

The Vish Color Management Dashboard gathers data in real time and allows salons to manage their color spend, identify trends and forecast inventory requirements all in one easy-to-understand system. The in-depth analytics, now accessible remotely, provide insight into employee performance to better coach your team, help eliminate waste and boost profits. @vishsalons

More in Education