10 Steps to Becoming Profitable
Jan 19, 2020
Opening a business is not for the faint of heart 💛. One of the most difficult pieces of the salon puzzle is eliminating debt and growing a profit. Let’s look at 10 ways that we can shake up our businesses and become profitable!
- Eliminate debt. Eliminating any business loan or credit card with a high balance is the fastest way to start making true profit. If you have an overwhelming amount to pay off, create a strategic plan with a financial advisor based on your patterns of income and expenses.
- Hire a financial advisor. Consult with different advisors, accountants, and bookkeepers to find the right financial match for you. Instead of being reactive and ignoring any money problems you might have, be proactive and ask for help! Then work with them to build profitable strategies for the future
- Save money. Small amounts over a longer period of time add up!
- Overhead. Many businesses are spending money in areas that could be eliminated. Certain expenses such as rent and utilities will stay fairly consistent, but take a look at other expenses that might be draining income.
- Take market risks! If we’re competing with other salons and offering discounts, we may start losing money instead of profiting. Try a radical idea. Go against the grain. Thinking about charging an hourly rate and eliminating tips? Try it. Have a new idea for streamlining online booking? Great! Market risks change the market for everyone.
- Create strong salon cancellation policies. Communicate them, be proud of them, and protect your staff’s time and income. Your staff will be grateful to have their time behind the chair protected, and they’ll continue to trust business decisions.
- Increase your prices and eliminate discounts. Charge your worth.
- Streamline retail (or eliminate retail altogether). Salons were never meant to be retail stores. They were meant to beautify and groom. Choose your favorites and what moves off the shelves. Eliminate the rest.
- Maximize your square footage. Now that you’ve eliminated shelves full of products, add a few more stations and grow your team.
- Trust your team. Trust that your team is with you, because they desire career success too. They’ll trust you to make strong business decisions, and we need to trust them to carry out their best work.
Creating a profit is more than just about working hard and doing hair. What step will you take to become more profitable? Share your comments below!
- Kate Kent