3 Epic Business Fails.

by Marion G Shaw on March 27, 2016

woman with problemThe statistics in our business are dismal.  80% of new salons go out of business within the first 2 years of operation.  Not because they do not have great technical skills or look after their clients.  But because they do not know, nor do they take the time to learn, the business side of the salon.

The average earnings of stylists in our industry in North America is between $13.20 and $13.40 per hour.  Now that’s really depressing.  Your stylists  have probably spent thousands of dollars on learning their skills, not to mention the fact that they may have a huge student loan to pay off.

So what is the answer?

There are 3 reasons why many salons fail and here they are:-

  1. Systems!!!  A system is a successful, repeatable method of doing something.  In the salon that would be how to do just about everything, but particularly for the service providers, the big 4 are:-  Retention  –  Rebooking  –  Referrals  –  Retail.  As a salon owner it is your responsibility to develop easy ways of getting your team to do all of the above in a way that is not pushy or uncomfortable.  Be prepared to mentor your new stylists on these systems so that they can get the results that are necessary for the success of your business.
  2. Pricing!!!  There are so many salons who do not know how to do this correctly.  You need to make a profit on every service you offer and the only way to do this is to know how much that service is costing you.  You have only 1 thing to sell – TIME – and knowing how much that time is costing you is the most important factor in pricing correctly.  You need to know your productivity.  How many hours per day are you selling?  Don’t count the hours that your team are actually in the salon – you need the hours that they are actually working with a client.  You must also assign a certain amount of time to each of your services and your team must know that they must do the service within that time frame.  Once you know how much that time is costing you, you can then decide on the amount of profit you need and price accordingly.
  3. Your Team!!!  Failure to be a leader instead of a manager is common in our industry.  Your stylists need to be productive, happy, know your salon goals and know that their career goals are important and also being met.  Share your numbers with your team,  celebrate victories, mentor and encourage and make sure that your team know they are part of the salon’s success.  If you do this well, you will have a team of very high earning producers, who are happy and enthusiastic and proud of their achievements.  Your stylists are your most important assets, so look after them well.

Does this sound daunting to you?

Doing all of the above can be a challenge, however, they are absolutely essential to the success of your business.

If you could have an easy way to put this together  would you be interested?  I think so! 

I have one for you.  (Or rather 2)  The #3 is addressed in some earlier blogs on finding the right people for the job.

The more difficult ones can be found right here  Take a look around the site and see the excerpts from the book which will give you systems for success on all of the above and also a great offer of the complete pricing system, (you will need MS office excel for this – don’t worry, there is a tutorial if you are not familiar with Excel,)  for only $40 with the added bonus of the book for only $5.

Give yourself an inexpensive Easter present and take yourself out of the scary statistics zone.


{ 1 comment… read it below or add one }

richard March 29, 2016 at 4:37 am

Great post. As always Rich


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