How to Fix the Leaks in Your Salon or Spa Service Pricing

November 30, 2015 | By Neil Ducoff | 2 Comments

Any discussion on salon/spa service pricing can quickly turn into a debate based on historic practices, entitlement, ego and emotions. That being said, what follows is sure to open a “can of worms” debate.

A debate is a formal discussion of opposing viewpoints where the best debater is crowned the winner. My intent is not to win a debate, but to create an awareness of the issues and practices that do more to compromise and complicate salon/spa pricing than help it.

But, if anyone wants to debate, sound business practices will beat entitlement, ego and emotional arguments every time.

As you will read, most of the service pricing issues are more salon related than spa. Why? Because there is a heck of a lot more entitlement, ego and emotional stuff that exists on the salon side of the industry. Spa pricing is more consistent across service providers … even those with many years of experience. That’s so not true on the salon side where many price levels can exist within the same salon and are justified by the size of stylist’s clientele and years of experience.... Read More

Finding Your Salon/Spa Profit Sweet Spot: PART THREE

November 23, 2015 | By Neil Ducoff | No Comments

Getting busier and working harder can drive top-line revenue, but more revenue is no guarantee that profit will occur. The process of creating profit is far more complex than selling more services and products and then checking that last line on your Profit & Loss Statement to see if Net Profit is positive or negative. Unfortunately, too many owners leave profit to hope, good luck and a favorable nod from the business gods. Of course, creating profit takes hard work, but it takes hard work and focus on the right things at the right time. Only then do you have the best chance of finding your salon/spa’s profit sweet spot.

Profit is the end result of a number of critical operational and financial disciplines. Think of it as an on going dialing in of systems, performance, information flow and a relentless commitment to paying attention to your numbers.

Here is a 7-point No-Compromise Leadership hit list that will help you dial-in and lock-in your salon/spa’s profit sweet spot:... Read More

How Systems Drive Salon/Spa Profit: PART TWO

November 16, 2015 | By Neil Ducoff | No Comments

Systems bring structure and discipline to the profit creation process. Accuracy and extreme attention to detail is nothing short of non-negotiable. As a business coach, I’ve seen more than my share of “garbage in, garbage out” accounting and financial reports. Blatant errors, improperly posted or categorized entries, expense line items that no one can explain, and huge miscellaneous accounts, are just a sampling of the financial nightmares that regularly occur when poorly designed systems exist. The end result is totally useless financial reports. You just can’t make the best financial decisions with bad data. And with all due respect, sloppiness in the bookkeeping office is a darn good signal that compromise exists at the leadership level. Otherwise, such nonsense would never be tolerated for even a nanosecond.

 

Profitability systems extend far beyond general bookkeeping. When revenues are generated, there needs to be financial systems in place to ensure proper reporting. And wherever money is spent and purchases made, financial systems must be in place. Checks and balances, there is no other way to control and drive profitability.... Read More

Disciplines of Creating Salon/Spa Profit: PART ONE

November 9, 2015 | By Neil Ducoff | 4 Comments

Profit is simply a measurement of business performance. It’s the reward for generating revenues, doing great work and staying within budget. Job security, advancement, better benefits, being able to invest in the best training, getting the best equipment, etc., are all part of profitability. Realizing all of the amazing opportunities that profitability can deliver will require a no-compromise sense of urgency. Urgency is paramount to achieving profitability.

When a salon/spa business culture takes a lethargic, lack-of-urgency approach to profitability, it gets in its own way. It’s akin to letting go of the controls that allow leadership to guide business activities toward its profitability goals. The cash-flow plan is demoted to the “optional task list,” or evolves into nothing more than an annual ritual that is rarely, if ever, looked at or put into play. Reviewing financial reports or having cash-flow planning meetings happens when it happens, if at all. Financial discipline and consistency is out the window.... Read More

Success vs. Greatness In Your Salon/Spa Business

November 2, 2015 | By Neil Ducoff | No Comments

There is a huge difference between having the desire for success and actually achieving your definition of it. Desire is a longing for something; success is an outcome. Greatness is something else entirely. Success, based on your interpretation, is earned, while greatness is bestowed. Greatness is how your peers and the world around you define your success and that of your company.

What does greatness looks like? For a company to enter the coveted realm of greatness, its values, thinking and actions must synchronize to create an unyielding gravitational pull that draws it through levels of success to greatness. The only thing that can disrupt this gravitational pull is a compromise in the company’s values, thinking and/or actions.

Let’s explore what this gravitational pull looks like in a successful company versus a great company. Yes, there is a huge gap between success and greatness.... Read More

Grow Your Business, Not Columns On The Appointment Book

October 26, 2015 | By Neil Ducoff | No Comments

I just read in the New York Post that salon industry icon Nick Arrojo is suing former stylist Paul Fox from his Varick Street salon for $3.5 million in damages for stealing five employees and his confidential client list, and opening a competing salon just 13 blocks away. The article states that Arrojo spent years training the former staffers, a fact that is touted in the former staffer’s bios at the new Paul Fox Salon. The suit states that the ex-staffers violated confidentiality and non-compete agreements.

Arrojo had a walkout … no different than the countless walkouts experienced by salon owners since the birth of the professional salon industry. Ask any gathering of salon owners if they have experienced a walk-out and all but a fortunate few will confirm they have. Like Nick Arrojo, the stories are like rubber-stamped accounts of broken trust, lost investment, plotting, collusion, stealing, lost revenue, bad-mouthing and the arduous task of rebuilding. All are stories of a business that took years to build that were blown up with their once employees, clients and cash flow relocated down the street.... Read More

FIVE Growth Drivers That Can Transform Your Salon/Spa

October 12, 2015 | By Neil Ducoff | No Comments

Growth doesn’t happen by accident or good luck. In business, there are Outcomes and Drivers. Outcomes are measurements and scores of the company’s ability to execute. Drivers are the mini-engines that work in unison to deliver the energy to produce the desired outcomes. The better you dial in the Drivers the more impressive the Growth Outcomes.

Here are the top five Growth Drivers that, when dialed in, can deliver next level growth beyond your wildest dreams:

Driver 1 … Productivity Rate:
In a service business, you sell time. You buy that time in the form of payroll hours. The more hours you buy from employees, the more inventory of hours you have to sell. The total of all salable hours for a day, week or month represents 100 percent of your inventory. The more focused and strategic you are at buying and selling hours, the higher your productivity rate. The optimum productivity rate target is +/-85 percent. If your total productivity rate is running below 70 percent, you’re buying too many hours because you’re operating inefficiently and not producing enough demand.... Read More

When You Want It Bad Enough

August 17, 2015 | By Neil Ducoff | 2 Comments

Everything changes when you want it bad enough. It doesn’t matter if it’s advancing in your career, starting and growing your own business, achieving a once unthinkable goal, or mastering new skills and abilities. When you want it bad enough, it exists with absolute clarity in your mind. When you want it bad enough, the path reveals itself. And when the path is uncertain or brutally challenging, you push forward because lowering your expectations and quitting is not an option.

I started Strategies 22 years ago with nothing but a credit card, a couple of computers, the ability to effectively write and speak about business concepts, and an unrelenting desire to teach others about leadership and what it truly takes to grow a profitable company. For the two years prior to Strategies, I became part owner of a commercial printing company. (Yes, it was an odd path for a former hairdresser and multi-salon owner.) I knew all about graphic design and pre-press, but very little about running the production floor of a printing company. My grand plan was to print Strategies magazine on my own presses. The short story is, that path became brutally challenging. Aging presses, broken machinery, a bad partnership and no cash required tough decisions before I lost everything.... Read More

Choosing Your Business Model: Employee or Independent Contractor

July 20, 2015 | By Neil Ducoff | 2 Comments

A business model is best described as a schematic that defines all of the working features, components and capabilities that will drive the business. If you want your business to deliver consistent quality and growth potential, those elements must be built into its business model. If you want your business to deliver flexibility with minimal management oversight, those elements must be built into that business model. Just like a Ford F-150 truck will never perform like a Ferrari 488 GTB, a business model can only perform the functions it was designed to deliver. A McDonalds will never perform to the standards of a Chef Gordon Ramsey restaurant.

An independent contractor (booth rental or suite) business model will never perform like an employee-based business model. The two business models are diametrically opposed and, by design, conflict with each other. The employee-based model generates revenues through a coordinated process of delivering services and products to the company’s customers. The independent contractor model generates revenues through rental fees collected from independent contractors that service their own customers, add-on services for independent contractors and potential retail sales.... Read More

Customer Service Is All About Sense of Urgency

July 13, 2015 | By Neil Ducoff | 1 Comment

Sense of urgency takes on new meaning and purpose when discussing the Customer Satisfaction Business Outcome. Think about the times you walked into a business and waited for someone to notice and take care of you. OK, now think about the times you waited while watching employees talk to one another and were totally oblivious to your presence. How about those times you sat in a restaurant watching other tables being served that were seated after you? What about that customer service representative that promised to call you back in an hour … and never did? These are all symptoms of a breakdown in sense of urgency.

Sense of urgency and customer satisfaction are inseparable. If your business fails to deliver on a customer expectation, it will show in your first-time and existing client retention rates. It’s that black and white. Nothing infuriates clients more than shoddy or substandard service. If a business fails to deliver on its quality and experience promise, it must be regarded as a breach of contract. Likewise, attention to detail, amazing service and the efforts any business makes to exceed the ordinary and deliver the extraordinary is what truly defines world-class brand.... Read More

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