About three years ago, the pandemic shook up the salon industry as we know it. Mask mandates, temporary shutdowns, and stringent surface cleaning changed the game for business owners. While some have bounced back from the early pandemic struggles, others have not. If you’re struggling to make your salon profitable, you aren’t alone.
Unfortunately the reality is that a number of salons have struggled as a result of the pandemic and economic difficulties that resulted. Not every business is doomed to be part of this statistic though. Strategic business decisions will help you not only come out of a dark period, but also become profitable.
Keep a Positive Attitude
The last few years were rough. Give yourself a break and acknowledge that first. When faced with negativity, it’s a deliberate choice to remain positive. Take a deep breath. You should be proud of yourself for keeping your business afloat despite the strikes against you. Now you’re deciding to take the necessary steps to make your business better. With a smile and a positive attitude, you can hit the ground running to take your salon to the next level.
Perform an Audit
Once you have your bearings, it’s time to dive into finances. Even if bookkeeping is your passion, a deep dive into your billable hours will give you insight going forward. Perform an audit as to where your money is going. You may like to think of your salon in terms of quality and customer happiness. But it’s time to think solely about dollars for this exercise.
Review your staffing – How many employees do you have working at the same time? Is the ratio of employees to customers proportional? If your employees have a lot of downtime, you’ll want to cut down on this expense, you’ll learn more about scheduling later!
Appointments
Look back at when appointments took place over the course of last year. Are appointments frequent and consistent? If not, this could also be solved by scheduling smarter or even altering your hours for maximum efficiency. Is having unlimited drop ins impacting your ability to profitably deliver services? Does it make sense to restrict drop-ins so that you can better serve your appointment customers?
Reconsider Your Business Goals
After you’ve considered where your inefficiencies lie with an audit, it’s time to return to your roots. Revisiting your business plan will allow you to get to the root of your goals. Make sure you have a clear value proposition and mission. If you haven’t, you also need to create a persona of your ideal customer. A persona is a representation of your typical customer based on their demographics, values, and desires. Talk to your customers to refine this persona. You also want to make sure your business is delivering what your customers are asking for. We’ll learn more about strategies to attract and retain customers later.
It’s possible you created this business plan years ago. Due to your packed schedule, you may not have revisited it since. Changes due to the economy, the pandemic, and beyond may have made your old business goals and methods obsolete. Now is the time to change them. Here are a few factors to consider when changing your goals:
Market Changes
Five years ago you were the hottest eyebrow salon in town. Thanks to the advent of Instagram and influencer marketing, a shop opened down the street and they are thriving with these strategies. Simultaneously, they’re keeping in constant communication with clients using a fancy CRM and email marketing strategy. New competitors can throw a wrench in your business goals. It’s important to learn about what they’re doing and what you’re not. Create a SWOT analysis if you need to react accordingly to market changes.
Community Assets
Maybe you don’t have any new competitors and your business strategy is airtight. The last step of reviewing your business plan then should be seeing how you can engage further with your community. When you first opened your salon, your friends and family might have supported you. Perhaps they even invested money too. Now that you have more experience under your belt, it’s time to tap into potential investors in your community.
Not sure where to find investors? Get involved. If you haven’t joined your local chamber of commerce, now is a good time. You’ll find out about local happenings and be able to mingle with other businesses. You might come across an angel investor. Or you might connect with another local business looking to establish a meaningful partnership with your salon. Whoever you end up meeting could be a major asset to your future business prospects in your own neighborhood.
Translate Goals into a Brand
While business goals are the blueprint, they’re useless without a strong foundation. Now is a great time to refine your brand, too. Think of all the biggest corporations out there. They’re instantly recognizable. You might be wondering why this matters to your salon when you’re struggling. But remember, you want your salon to become a fixture like that in your community. Awareness and consideration about using your business all start with a strong brand.
Look at your logo, décor, and business cards. These important materials communicate a lot about your brand’s values. When reviewing your business plan, you might have refined your value proposition. Make sure your marketing materials reflect that. Once your materials reflect your values, you’ll lay the foundation for your customers to remember you. You’ll also update your advertising and marketing efforts to be more eye-catching, too!
Refine Marketing Strategy
Your logo has been redesigned and store signage is new. New marketing materials are refreshing, but you need a marketing strategy along with them. Your marketing plans will go right along with your business goals. For example, you might have had great success with flyers and direct mail in the past. As your community members have slowly transitioned more of their lives online, these print marketing tactics may not be resonating with them anymore. Now would be an excellent time to try out new digital marketing tactics.
Start by auditing your current marketing strategy. When you’re trying to spend money more wisely for your business, cost per acquisition matters. Find which marketing channels have the highest ROI (Return on Investment) for your business. Consider pausing or lowering your budget for channels with lower ROIs. Reallocate that budget to the marketing channel that’s bringing in the customers at a low price. Some examples of low-cost high reward digital marketing methods are email marketing or digital ads.
You also can get a great return on effective search engine optimization. You may want to work with a local digital marketing agency to see how your business can reach the top page of Google for keywords like “salons near me.” SEO may become part of your long-term marketing strategy, as it takes time to rank highly on search engines. But you’ll see exceptional low-cost growth by gaining visibility on the front page of search engines.
Reinvent your Services
A thorough examination of your services is needed next. Take stock of what services you offer. As a brow salon, you likely offer waxing, tinting, and lamination. While you’re performing these services, talk to your customers. Ask if there are additional services they’d like to see. For example, you might have never thought of offering lash extensions or facials. But your competitors are doing it. So, your clients expect these services as well.
The current market might have your clients changing their tune too. In your local market is it possible that demand has changed from having brows threaded to waxed? Might you be more profitable if you offered both services?
You might want to stop providing some services if it’s not scaling for your business. Unpopular services or less expensive services will take away time from your employees when they could be performing more popular and profitable services instead.
Whether you’re taking away services or ramping up new ones, be sure to thoroughly train your employees on your offerings. New services will take time to get everyone skilled and up to speed. Discontinued services will need to be communicated to customers so they aren’t confused or upset.
Schedule Smart
Scheduling may seem like a subtle detail in your business revamp, but it certainly matters. When creating your schedule, adhere to these best practices:
Schedule Employees Strategically
This is a tricky one. Of course, your employees have lives too and have their preferences for hours. But if a flexible and loose schedule isn’t’ working for business needs, it’s time to tighten up. Schedule your top performing and most experienced employees during peak times. Yet, you’ll want to make sure the schedule is even. Paying one person significant overtime is not ideal for your bottom line right now.
Store Hours
Your salon will also adhere to a schedule. Now is a good time to create a heat map of your most popular days and hours. See when you’re busiest and compare that to your current hours. It might make sense to expand hours on weekends if they’re popular days with consistent demand. Yet, it might make sense to open later on Tuesdays when it’s always dead. You’ll save money on payroll and increase revenue by making these adjustments to your salon hours.
With the increase of work from home people are more flexible with their hours. Before the pandemic salons in commuter communities might have struggled to bring in business in the 9-5 business day but you might have more customers during this time now. On the other side salons in office areas might find the 9-5 times slower now with less people in the area. Does it make sense to adjust your hours to be more weekend focused now? Ask your customers what times work best for them and adjust your hours to those that work best for your customers.
Tap Into Your Customer Base
Your customers are your greatest asset of all. If you can’t point to a specific issue, it’s time to do market research with your customers. Before employees finish service with their clients, have them distribute a client satisfaction survey. Digitize the survey too and email it to customers after they complete a service. Make the survey concise and easy to fill out.
You’ll want to ask questions that give you more insight into your end goal. In this case, you want to look for any recurring patterns among current clients. Ask them how satisfied they are with the service and products from your salon using a Likert scale. Don’t ask any leading questions. But give clients every opportunity to provide their own open-ended feedback as well. You can learn a lot from them!
Make Selling a Habit
It’d be great if every customer spent a little more. But it’s not always self-explanatory as to how to make that happen. To increase profits, you need to make selling a priority. By combining cross-selling and upselling strategies, you can encourage customers to spend more without sacrificing value.
Cross-sell Services
Your clients may come in for their routine brow wax, but not even know that they can get a set of lashes done at the same time. Cross-selling services allow you to increase your ticket value while spreading awareness to customers about your other offerings. Make additional services attractive by bundling them. For example, a customer getting a brow wax can get a complimentary lash tint if they also get a lash lift. Customers love a deal, so you’ll be surprised how many will take you up on it.
Upsell with Products
Offering products with services is another easy way to increase ticket value. During a brow wax or lash lift, customers can learn about the products your employees are using. Once they see how effective the brow wax is, for example, they can purchase it after service. It’s important to train your employees on how to make compelling and natural sales pitches. As customers relax in their salon chairs, customers should feel at ease and informed.
If you don’t have any salon products yet, take them to the next step with Eyebrowz Designs. Choose from plenty of effective products from brow powder to brow soap. You can also add your newfound logo and business name on every product you order. Spread brand awareness and beautiful brows all in one! Get started with your product line here.