It’s Time to Create a NEW Salon & Spa Golden Age

October 15, 2018 | By Neil Ducoff | 2 Comments

If you were part of the salon industry in the early 1970’s, you remember when precision haircutting took the industry by storm.

Haircutting and blow-drying transformed salons as we knew them. The weekly wash and set salons’ days were numbered. Baby boomers wanted more natural hair and absolutely nothing to do with teasing and spraying.

I graduated beauty school in 1971. I was 21 years old and fiercely determined to establish my career in the salon industry.

I was hungry for advanced training to learn everything I could about haircutting, blow drying, curling iron work, color and perming.

In the Fall of 1973, I opened the first haircutting salons in the area and a second one two years later.

I’m sharing my story because what I experienced in the early 1970’s was the beginning of a 30+ year span of what many now refer as the industry’s “Golden Age.”

That Golden Age was fueled by a passion for learning, excellence and elevating the professional salon industry. (I’m focusing on salons because the “day spa” didn’t emerge until the early 1990’s.)... Read More

If you were part of the salon industry in the early 1970’s, you remember when precision haircutting took the industry by storm. Haircutting and blow-drying transformed salons as we knew them. The weekly wash and set salons’ days were numbered. Baby boomers wanted more natural hair and absolutely nothing to do with teasing and spraying. I graduated beauty school in 1971. I was 21 years old and fiercely determined to…
Read More

Categories: Leadership

When You Have to Fire a Salon or Spa Employee

October 8, 2018 | By Neil Ducoff | 1 Comment

What follows is an all too familiar story of what can happen when you fire an employee.

It was posted on our Strategies Salon/Spa Business Idea Exchange Facebook discussion group.

Here to commiserate: (I’m on Team-Based Pay.) I had to let go of my esthetician after almost a year of poor performance. Despite numerous meetings, classes, encouragement, tracking — even a Performance Improvement Plan — it had to end.  

Her performance never improved, so it ended today.  

She threw everything in the book at me saying that I am a terrible person and she will be living on the streets now, etc.

Now she is getting my other ex-employees involved (the last one left over five months ago and I haven’t talked to them since) and now one of them won’t stop calling me demanding an explanation.... Read More

What follows is an all too familiar story of what can happen when you fire an employee. It was posted on our Strategies Salon/Spa Business Idea Exchange Facebook discussion group. Here to commiserate: (I’m on Team-Based Pay.) I had to let go of my esthetician after almost a year of poor performance. Despite numerous meetings, classes, encouragement, tracking — even a Performance Improvement Plan — it had to end.  …
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Categories: Leadership

Who Gets the Credit? The Salon & Spa Dilemma

October 1, 2018 | By Neil Ducoff | 4 Comments

It seems like the most basic and innocent question anyone in the salon/spa business could ask.

Someone does a service, assists in delivering that service, or upgrades that service with an add-on. Someone asks, “Who gets the credit?”

  • Too often, the prevailing industry thinking is, “Why should I do this if I’m not getting credit?” More accurately stated, “If I’m not getting paid a piece of the service price, I’m not doing it.”

A client is at checkout. Doing her job, the guest services employee sells a retail product to the client that the stylist never recommended.

  • When ringing out the retail sale, she rings the service out under the stylist’s name and the retail under her name.
  • The stylist has a fit that he/she didn’t get the credit.
  • The owner moves the retail sale credit to the stylist.
  • The frustrated guest services employee says to herself, “So every time I do my job and sell some retail, I lose the credit to a service provider. It’s not worth the effort, I always lose the credit.”

Recently an owner posted this question in our Strategies Salon/Spa Business Idea Exchange Facebook Group: ... Read More

It seems like the most basic and innocent question anyone in the salon/spa business could ask. Someone does a service, assists in delivering that service, or upgrades that service with an add-on. Someone asks, “Who gets the credit?” Too often, the prevailing industry thinking is, “Why should I do this if I’m not getting credit?” More accurately stated, “If I’m not getting paid a piece of the service price, I’m…
Read More

Categories: Leadership

A Salon/Spa Owner’s Profitability Checklist

September 24, 2018 | By Neil Ducoff | No Comments

FACT: Profitability is a planned outcome. Profit doesn’t happen by chance, working harder or by hope.

Many salon/spa owners are not overly fond of numbers, but all owners want and love profit.

There’s nothing more stressful than attempting to operate a salon/spa that is perpetually short of cash and struggling to be profitable.

It’s one thing to get behind on bills, rent and barely make payroll. Getting behind on payroll taxes is where things get just plain ugly.

Going into more debt to plug leaks, that were never managed in the first place, is as dangerous as it is unsustainable. Trying to pay off yesterday’s bad decisions with today’s cash flow is a ticking time bomb.

So, to give all owners a dose of financial reality, I put together the following 13-point profitability checklist:

  1. Can you read and understand every line item on your financial reports? This includes your Balance Sheet, Income Statement, and Statement of Cash Flows. If not, what’s your plan to learn how? This is non-negotiable.
  2. How often should you receive complete financial reports on your company? If it’s not at least monthly (that’s only twelve sets of financials a year) it’s not often enough. At Strategies, we’ve been running weekly financial reports for almost 25 years.
  3. How much time lapses from the end of the month until you receive your financial reports? If this exceeds two weeks, it’s too long. Find out why and address it. If you have a bookkeeper, there’s no excuse not to have timely reports within days after the end of the month. Any good in-house accounting software and a competent bookkeeper should be able to produce timely weekly financials. This is non-negotiable.
  4. Do you have a cash-flow plan that guides your revenue targets and expense budgets? If not, why not? Financial reports tell you the score during and after the game ends. Your cash-flow plan is your financial playbook. Follow the plan, be fiscally responsible, and your financial reports will improve. You cannot grow a business without following a cash-flow plan. This is non-negotiable. The plan is simply a “best guess.” The more you do it and work your plan, the better you can predict the future.
  5. Do you live your cash-flow plan and budget? Living your cash-flow plan means using it to make all financial and spending decisions. No sense creating a budget if the discipline to follow it isn’t embedded in your leadership thinking.
  6. Do you have weekly cash-flow planning meetings? If not, why not? Having a cash-flow plan is pointless without comparing it to actual revenues and expenses. Are you over or behind projections? Why? What do you need to do today or over the next week to correct or get back on track? This is why I prefer weekly over monthly financials. I don’t want to find at the end of the month that we were overspending mid-month.

  7. Do employees know the score? If your response to, “Hey boss, how’re we doing?” is “Not good enough,” the people doing the work have no idea where the salon/spa is at or what they need to do to make it better.
  8. Does your company require “purchase orders” to control spending? A purchase order is simply a list of what’s being purchased and the total cost. The total cost of the order is either within budget or over budget and needs to be reduced.
  9. Is your payroll percentage under control? What is the ideal target payroll percent for your salon/spa? What will it take to achieve this? Is your pay system overdue for an overhaul?
  10. Do you know your “cost per hour” for services? How do you know if your services are priced right if you don’t know the cost? The only way for a service business to be profitable is having a realistic profit margin on your cost per hour to arrive at the optimum selling price. Sadly, most owners don’t know how to calculate their cost per hour. If you’re one of them, contact us at Strategies.
  11. Are your inventory levels under control? Money that’s tied up in excess inventory is a cash drain. What’s the plan to get inventory under control?
  12. Are you turning your inventory as often as you need to? Slow inventory turns in retail kills cash flow. Inventory should turn four to six times a year or more.
  13. As the leader of your salon/spa, are you setting the right example to create a fiscally responsible business culture? If not, why not?

Here’s my challenge to you: There is no debating that the profitability begins with the right leadership thinking, disciplines and culture. It cannot be faked or given lip service. Salon/spa owners must live it, inspire it and relentlessly build a fiscally responsible culture to support it.... Read More

FACT: Profitability is a planned outcome. Profit doesn’t happen by chance, working harder or by hope. Many salon/spa owners are not overly fond of numbers, but all owners want and love profit. There’s nothing more stressful than attempting to operate a salon/spa that is perpetually short of cash and struggling to be profitable. It’s one thing to get behind on bills, rent and barely make payroll. Getting behind on payroll…
Read More

Categories: Financial Literacy

The 10 Characteristics of an Ideal Front Desk/Guest Services Employee

September 17, 2018 | By Neil Ducoff | 1 Comment

FACT: Front desk/guest services employees are key players in salon/spa growth, productivity, profitability and brand identity.

The days of the “receptionist” to greet and check clients out are long gone.

In today’s systematized salons/spas, the front desk is as much a command center as it is a check-in/check-out point for clients.

Beyond the givens of providing customer service, scheduling appointments and ringing up service and retail sales, the responsibility of driving salon/spa critical numbers is paramount.

Service providers may “do the work,” but front desk/guest services employees organize the work, sell the work, and exercise extreme influence on pre-booking, client retention and productivity rates.

These efficient multi-taskers must also be technologically savvy to fully utilize the power of today’s modern software applications.

There is no doubt that finding the right fit for these key positions can be challenging, but just as much as any skilled service provider, they must be hired, trained and retained.... Read More

FACT: Front desk/guest services employees are key players in salon/spa growth, productivity, profitability and brand identity. The days of the “receptionist” to greet and check clients out are long gone. In today’s systematized salons/spas, the front desk is as much a command center as it is a check-in/check-out point for clients. Beyond the givens of providing customer service, scheduling appointments and ringing up service and retail sales, the responsibility of…
Read More

Categories: Teamwork

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