Do You Know Your Salon/Spa’s Current Net Profit? If Not — Why Not?

October 11, 2021 | By Neil Ducoff | No Comments

In business, you play to win. But winning has nothing to do with how busy your salon/spa is. Winning in business is about creating Net Profit — what’s left after all expenses are paid.

To know if you’re winning, you must keep score. That means reading and understanding your Profit & Loss Statement — and doing it no less than every month.

So … if your Profit & Loss Statement can tell you if you’re winning or losing the business game … why is it that so many salon/spa owners ignore or avoid this massively critical financial report?

Some owners think it’s complicated and the numbers don’t make sense.

Well, there’s nothing complicated about a Profit & Loss Statement. Even in its most basic format, it lists dollars in, dollars out, and dollars left for a specific period of time (a month, quarter, or year).

Here’s the simple math: If your salon/spa generated $1 million in service and retail sales for one year, and had $900,000 in total expenses, you earned a $100,000, or 10%, Net Profit.... Read More

Why Salon/Spa Retailing Must Be a Team Sport

August 9, 2021 | By Neil Ducoff | 2 Comments

The following was a question posted in our Strategies Salon Spa Business Idea Exchange Facebook group.

RETAIL COMMISSION? We are having some retail commission issues. Who should get retail commission on walk-in sales? Should the person who had to step away from their guest to ring up the sale get it or does it go to “the house”? Now, if a stylist must educate the client on what to buy, then he/she gets the commission. But what about the walk-ins that know what they want and only need the sale rung up? Thanks in advance.

Here are some of the responses …

  • Hire a receptionist and pay zero commission.
  • If you must step away from a guest, you should definitely get commission.
  • Commission on “in chair” sales only. Walk-ins are coming into the salon to purchase so it’s every employee’s job to recommend and ring out sales.
  • If you give retail commission on walk-ins, some stylists will rush to help a client before others. That makes it difficult to measure a stylist’s retail performance at the chair.
  • The first retail sale goes to prescribing stylist.
  • Walk-in purchases go to the house.
  • If the prescriber stylist has repeat clients, he/she gets the commission.
  • Walk-ins go to whoever rings them up … unless the customer patronized a specific stylist.
  • If they’re actually selling a product explaining and earning the sale, I pay a 20% commission.
  • As the owner, I suggest you handle the walk-ins. That way you’re in control.
  • I have always paid retail commission to the person who made the sale regardless of if the customer was a walk-in or a client.

As you can see, the answers are all over the place. ... Read More

How to Implement a Major Salon/Spa Price Increase

July 18, 2021 | By Neil Ducoff | 1 Comment

In last week’s blog post on Why Salons/Spas Should Raise Prices Now, I delivered this reality check on the need to increase service prices:

“The combination of limited service hours available for sale, high customer demand, high productivity rates, and a tight labor market, means it’s time to raise prices. The industry is experiencing a “perfect storm” period for price increases.”

THE CHALLENGE: The industry suffers from price increase phobia out of fear of losing clients. In the process, too many salons/spas struggle with cash flow and creating profit.

Here is our hit-list of strategies to successfully implement a major price increase:

  • The proverbial “What’s the best way to raise prices?”: The answers are all over the place from put up signs, send email notices, tell clients the price is going to increase on their next visit, to front desk telling them at check out. The most logical solution is to inform clients when booking appointments and have service providers inform clients of the price increase at the beginning of the service.
  • The Fix: When it’s time to raise prices … set the date, raise prices, and get it over with. Dragging out the “let’s try to inform everyone so no one complains” is pointless. Guess what? Some clients are going to complain — the majority will not. You need gas and the price at the pump went up overnight … you still buy the gas. You’re a business owner that needs to make business decisions regarding price. Clients know this. If they appreciate the consistent quality you deliver, they’ll pay the new price. If not, it is the client’s choice to accept the increase or go elsewhere. There is no need for price increase phobia.
  • Will all clients who are not paying the current price please stand up? Maybe one reason you need to raise prices is that there are existing clients that still haven’t been charged the last price increase … or two. That’s right, and you know it. There are probably clients with appointments and/or receiving services at your salon/spa that are still paying old prices. This is pure insanity and a 100% compromise of your business. If you and your employees are true professionals, respect the value of your skills, experience, and quality of work, and charge the appropriate prices.

  • The Fix: I’m just going to say it, “Get a new backbone if the one you have is a rubber band.” Clients are NOT your friends. They buy your time to receive services. When the value of your time and cost of business increases, you raise prices, and they pay the increase that all other clients are required to pay. If a client doesn’t want to pay your rate — he or she is not a good client. I bet you’ll see better cash flow just by enforcing your existing pricing structure.
  • Pricing based on assumptions: You know how much to mark up a retail bottle of shampoo based on its cost. How do you know how much to mark up a service if you don’t know what an hour of service costs? The answer is you don’t know … so you guess. It’s downright scary how many salons/spas set service pricing based on WAGS (wild-ass guesses) — or what the competition is charging, that’s also based on a WAGS. Maybe your pricing is based on some level system you installed that has set price ranges for each level, but are those prices based on your company‘s cost per hour or someone else’s?
  • Discounting away profits: Are you driving gift card sales by offering big attractive discounts? It’s great to see all that gift card cash add up, but you may be setting your company up for a cash crisis at redemption time when the cost of fulfilling those pre-paid services is going to exceed their purchase price. The cash crisis is going to be even more painful if the gift card cash was spent and not held in reserve. You’ll not only be busy fulfilling gift card services at a loss due to excessive discounting … you won’t have the cash to cover the fulfillment costs. Discounting dependency kills cash flow and destroys profit. Groupons, and the like, are about the worst discounting practices any salon/spa can engage in.
  • The Fix: There’s nothing wrong with occasional and selective discounting promotions. When discounting becomes a crutch to drive sales, your service business is in trouble. Stop the discounts and focus on quality, delivering extraordinary experiences, giving value, pre-booking, and client retention. As for discounted gift cards, stop the practice. It will come back to haunt you at redemption.
  • Going for the tip vs. charging the right price: This is extremely common and probably alive and well in your salon/spa. It’s when service providers intentionally give away or don’t charge correctly for services, to receive a bigger tip. It’s also when service providers fail to charge clients a price increase because they think they’ll lose clients and miss out on tip income.
  • The Fix: You must have a system in place that monitors the price that clients are being charged for services. Some software systems can alert you whenever a price is adjusted. In a service business, educating your team on proper pricing and pricing policies is non-negotiable. Inspect, verify, and correct. Otherwise, the leaks in your pricing system will eventually sink your company.

Here’s my challenge to you: Prices on damn near everything have increased since the pandemic. It’s time to raise yours.... Read More

Why Salons/Spas Should Raise Prices Now

July 12, 2021 | By Neil Ducoff | 4 Comments

After the COVID-19 shutdown, salons and spas reopened to a new economic reality.

The increased costs of PPE, plus the reduced capacity restrictions, meant expense budgets had to be rethought.

Complicating matters even further were employees that chose to remain on unemployment for a while — or not to return at all.

As salons and spas were reopening, Strategies was encouraging owners to raise prices to cover increased costs and capacity restrictions. Some did minor increases while others added a surcharge for PPE.

But there were many owners and independents, with the best compassionate intentions, who chose not to raise prices.

With pent-up demand for services, salons/spas reopened with high productivity rates. Everyone was excited being crazy busy.

As the reopening surge settled in, a new economic and financial reality began to settle in.... Read More

How to Fall Back in Love With Your Salon/Spa Business

April 25, 2021 | By Neil Ducoff | No Comments

The day you became a salon/spa owner, it was like a dream come true. But like any relationship, it can, and will, hit some rough spots.

Too often, those rough spots turn ownership into a true love/hate relationship. That’s especially so if the rough spots linger too long, or, devolve into what we not-so-fondly refer to as, the fiery pit of hell.

On the “love” side: Your salon/spa business is running like a finely tuned machine. You feel a sense of personal pride and accomplishment. Your team culture is dialed in, there’s money in the bank, your critical numbers are impressive — so much so, you love being an owner.

On the “hate” side: Employees drive you crazy, your culture needs fixing, cash flow sucks, debt load is scary, and you’re always stressed. You’re not sure how much more of this you can take. If there was a viable way to get out without losing everything — you’d take it in a heartbeat.... Read More

Imagine Your Salon/Spa Running at Full Potential

April 18, 2021 | By Neil Ducoff | No Comments

To have your salon/spa running at full potential is every owner’s dream.

Running at full potential means:

  • Your company-wide productivity rate averages 85%.
  • High first-time and existing client retention rates.
  • Everyone working within time standards.
  • Systems make your business consistent and predictable.
  • Every client receives a personalized retail recommendation.
  • Hitting service and retail goals damn near every month.
  • Your culture is dialed in and all staff are on the same page.
  • Cash flow is excellent with three-plus months of cash reserve.
  • No, or very little, debt.
  • Monthly net profit makes you proud of what you built.
  • Your company is meeting or exceeding growth goals.
  • You sleep good at night.

You get the picture. Running at full potential is a wonderful and enviable place to be.

As an entrepreneur, you also know that no matter how dialed in your business is, you see where it misses the mark. Where performance, behaviors, and execution could be better.... Read More

Dare to Dream — And Dream BIG

April 4, 2021 | By Neil Ducoff | 4 Comments

Without question, leading your salon/spa through the pandemic tested your tenacity and leadership skills.

We all had to overcome one obstacle after another until some semblance of normalcy and stability was achieved.

In tough times, your focus and energy are on making it through today, tomorrow, and next week. Future dreams and aspirations have to wait. It’s called “survival mode” for a reason.

FACT: Survival mode can be a trap. If you stay in it too long you can get stuck in survival mode.

The pandemic turned “business as usual” upside down. Many salons and spas closed their doors. But the majority survived.

From the beginning of the pandemic, my message to owners was simple.

  • Salons and spas that entered the pandemic with tight systems,
    disciplined cultures, and cash reserves, will make it through relatively unscathed.
  • Salons and spas that were struggling culturally and financially before the pandemic, may not survive.

Today, there are signs the worst of the pandemic is behind us. So much so, that it’s time to start dreaming again — and dream BIG.... Read More

The Great Salon/Spa Tipping Debate

March 21, 2021 | By Neil Ducoff | No Comments

Tipping in salons/spas has always been an emotional topic.

When doing business seminars, I would ask attendees, “How many of you feel there is something unprofessional about tipping in salons/spas?” Just about all hands would go up.

Then I would say, “Keep your hand raised if you would eliminate
tipping in your business to be recognized as truly professional.”
Every hand would go down.

Tipping becomes super emotional when it comes to tip processing, proper reporting of tip income, professionalism, and especially, the thought of going no tipping.

There are many owners and employees that believe that tip income should be tax-free. Or that only reporting a small percent of service revenue is good enough. Or that only tips on credit cards should be reported and taxed. Sorry, all tip income is taxable.

And then there are salons/spas that try to eliminate the processing
fees on credit card tips by implementing “no tips on credit cards”
policies. Some even install ATMs. Many say, “Clients don’t complain,” but in those situations, clients really don’t have a choice.... Read More

Are PPP/EIDL Loans Masking Pre-Pandemic Salon/Spa Problems?

March 14, 2021 | By Neil Ducoff | No Comments

Without question, COVID-19 wreaked havoc on salon/spa revenues during the shutdown, and after with reduced capacity.

When revenues take a hit and expenses keep adding up, things get ugly fast — especially for salons/spas in weak financial condition.

As unimaginable as the pandemic has been, so too has the massive federal aid funding — in not one, but two rounds of PPPs. And then there’s the EIDL loans and grants. Federal funding saved many salons and spas from closing.

Because of federal funding, many salons and spas are in a better cash position today than ever before.

WARNING: If your salon/spa has more cash today than pre-pandemic, it’s no guarantee that the future is all blue skies and popcorn clouds — especially if your company has a history of struggling to be profitable.

FACT #1: Profitability and positive cash flow is a discipline that requires some fairly straight forward financial skills.... Read More

How One Salon Paid Employees During the Shutdown and Stayed Debt-Free

November 29, 2020 | By Neil Ducoff | 2 Comments

Strategies definition of Profitability: “The profitability business outcome is all about achieving predictable cash flow and bottom line profitability — and doing so with the highest level of no-compromise financial accountability at all levels of the company.”

To showcase what a salon that’s truly locked in on profitability looks like, we interviewed this year’s winner of the 2020 Team-Based Pay Award for Profitability, Laura Pinkas, owner of Shine Hair Color & Design Studio in Columbia, SC.

What was Shine’s number one accomplishment in 2020?
... Read More

A Salon/Spa Owner’s Checklist for 30-45 Days After Reopening

June 29, 2020 | By Neil Ducoff | No Comments

Depending on the state, some salons and spas have been open since the end of April. Salons and spas in eastern PA and NY are just reopening … or about to. Salons and spas in certain counties in CA are still waiting to reopen.

For most of you, it’s been a mad dash to get your salon/spa reopened. You had to figure out all the safety protocols, acquire PPE, get your employees off unemployment, sanitize everything, reschedule client appointments … phew.

No matter where your salon/spa is in the reopening timeline, checking all the boxes in all those reopening checklists is a daunting task. It’s easy to miss a few. It’s easy for a new system or protocol to become inconsistent, ignored or forgotten.

More importantly, there are to-do’s that should have been on your checklist that you didn’t know about, or feel were important, or just didn’t want to deal with.

At Strategies, our mission is to help owners lead and grow salons and spas that are capable of delivering service excellence in the most efficient, productive and consistently profitable manner possible. To do so requires the right leadership approach, systems and team-based culture.... Read More

10 Tips for Salon/Spa Holiday Gift Card Sales

November 3, 2019 | By Neil Ducoff | 3 Comments

The Holiday season is upon us as the countdown to New Year’s Eve is officially underway.

Halloween candy, costumes and decorations are already replaced with Thanksgiving and all things Christmas.

Retail stores are geared up and ready for the annual mad dash to rack up record Holiday sales.

For salons and spas, the Holiday season is the single best opportunity for gift card sales. The question is, are you ready to go for your gift card pot of gold?

To make sure your gift card pot of gold is as big as it can be, here are my ten No-Compromise Leadership gotta-do’s:

  1. Gotta view gift cards as a good thing: Maybe it’s because gift card sales appear as a liability on your Balance Sheet (because you owe the GC holder services or products). Maybe it’s because too many owners spend gift card revenue as quickly as it comes in and are cash starved as redemptions come in. KEY: What could be better than exchanging a piece of plastic to pay for services/products that will be fulfilled at a later date? Absolutely nothing. It’s like magic money.
  2. Gotta manage gift card revenue: It’s financially dangerous to spend gift card money prior to redemption. When clients pay for service and products with gift cards, all the costs to fulfill those services and products need to be covered, including payroll and professional product cost. During heavy redemption periods, your salon/spa can be very busy with very little cash coming in. KEY: All gift card revenue should be transferred to a separate savings or money market account. As redemptions occur, transfer cash back into your operating checking account. The best game to play to build cash reserves is to resist touching gift card savings.
  3. Gotta believe your pot of gold is possible: Like anything else, the harder you work at selling gift cards, the better you’ll do. I’ve seen salons and spas crush their gift card sales goals because they went for it. Believing gives you confidence to do the hard work and make your pot of gift card gold a reality. KEY: Believing is half the battle. Execution is the other half. You’re not going to achieve 100% of your gift card goal with a 50% effort. Successful gift card sales require planning, scripting, decor — and energy.
  4. Gotta look like you’re in the gift card business: Retail stores are already stocked, decorated and geared up for big Holiday sales. Your salon/spa needs to do the same except that your focus is on selling Holiday gift card solutions. Yes, you’re selling gift buying solutions that are fast and easy. KEY: Special gift card packaging and bags should be prominently displayed in quantity in your retail and check-out desk areas. Your website should be shouting “gift card solutions” with an easy purchase process. Seek out a professional retail display specialist to help out.
  5. Gift card selling station: A great way to focus attention on gift card purchases is to set up a gift card selling station in your retail area. A nice looking desk, table or podium will do nicely. If you don’t have enough space in your retail area, make the stylist station with the most visibility your gift card selling station. KEY: Decorate the station with gift-wrapped packages and plenty of gift card packages and/or decorative retail bags ready for purchase. Staff the station during busy times. Have an iPad or tablet ready to ring up gift card sales.
  6. Advance special offer email campaigns: If your salon/spa doesn’t have an up-to-date client email list — shame on you. KEY: Emailing/texting out a special offer to your customer list is just smart business. Offer special packages or savings if clients order online or purchase onsite by December 1st. Do premium price points, as existing clients are the easiest to sell. For example: Purchase a $100 gift card and receive $115 in services.
  7. Everyone has gotta play: The bulk of gift card sales are done at checkout. This means your guest services team must be trained and scripted to up-sell clients at checkout. The mistake most salons/spas make is waiting to up-sell gift cards at checkout. KEY: At check-in, every client must be told, “Remember, we have some wonderful Holiday gift card solutions. We can tell you more when you checkout.” Every service provider should be scripted to simply inform clients, “We have some wonderful Holiday gift card solutions available when you checkout.” It’s not rocket science. It’s your entire team sharing Holiday gift card solutions with clients.
  8. Gotta avoid crazy discount incentives: If you’re running at 10% net profit and selling gift cards at 15% to 20% off, you’re shooting yourself in the financial foot. KEY: Be very conservative with your discounting. In fact, there is no reason to discount gift cards at all. Consumers buy gift cards for convenience and speed. Discounting may help sell more gift cards, but the financial impact may not be worth it. If you’re discounting gift cards because you need the cash to pay yesterday’s expenses and debt — you’ve got bigger problems to fix.
  9. You gotta keep score: At too many salons and spas gift card goals and sales are known to the few, not the many. You can’t create the energy and urgency that fuels teamwork when most of the team is oblivious to the game being played. KEY: Every daily huddle from just before Thanksgiving through January 15th should include a Holiday gift card sales scoreboard. It’s the best way to keep every team member playing the gift card sales game.
  10. Gotta retain new clients: The worst thing an employee can do is treat a gift card client as a throwaway because they may not tip as well and may not return. Dialing back customer service ensures that the self-fulfilling prophecy of small tips and not returning will occur. KEY: Every client is important. Every new client is an opportunity to become a retained client. Just because the method of payment is a pre-paid gift card instead of cash or credit card doesn’t mean that client deserves less.

Here’s my challenge to you: Why not do 25% or 50% more in gift card sales this Holiday season?... Read More

Retail Recommendations Drive Retail Success

August 25, 2019 | By Neil Ducoff | 1 Comment

The retailing of professional products through salons and spas is a no brainer. Always has been.

Retailing in salons and spas has also been a source of major frustration for owners and employees.

As an owner, you want employees to sell retail, while at the same time, many employees avoid selling retail as if “selling” is something evil. The infamous service provider excuse is, “I’m an artist, not a salesperson.”

Many years ago, Strategies started teaching and coaching a system we fondly call “Happiness.”

“Happiness” is simply a procedure that service providers are required to use at the end of a service — before the client leaves their chair, station or treatment room.

“Happiness” has the following five steps for a service provider to complete:

  1. Provide every client with a recap of the services/work completed.
  2. Verbally recommended professional products for the client to use between visits — and write the product names on the client traveler, ticket or designated piece of paper.
  3. Verbally explain the recommended maintenance cycle with an “on or about” date for the next visit — and write that “on or about” date down below the recommended products.
  4. Tell the client that guest services will assist the purchase of the recommended products and schedule (prebook) the client’s next appointment. (To drive prebook and client retention rates, guest services can schedule the next two or three appointments.)
  5. To complete the service provider’s “Happiness” requirements, the written recommendations for products and future appointments must be handed to guest services by the service provider, or designated employee.

“Happiness” has the following two requirements for guest services to complete at client checkout:... Read More

What Salons & Spas Need to Know about Team Bonus Disqualifiers

November 6, 2017 | By Neil Ducoff | No Comments

Team Bonus Disqualifiers for Salons Spas

If you get caught speeding, you get a ticket.

In sports, if you commit a foul, you get penalized.

So, doesn’t it make perfect sense that if an employee breaks enough rules, he or she can be “disqualified” from team bonus?

The answer is YES, NO and it DEPENDS.

Strategies has been teaching the in’s and out’s of Team Bonus for over 24 years because it’s an integral element of our Team-Based Pay (TBP) business model.

NOTE: Team Bonus is not exclusive to TBP. It can add a “teamwork” incentive to any pay program.... Read More

How to Make Money in an Employee-Based Salon or Spa

May 15, 2017 | By Neil Ducoff | No Comments

How to Make Money in Employee-Based Salon Spa - MMWUWhy would anyone open a salon, spa or medspa if it can’t make money? Especially when they’re notorious for operating at low single digit profits, or losing money … and plagued by staff walkouts.

It’s also true that many service provider owners wouldn’t get a paycheck if they weren’t working behind the chair or in the treatment room.

In fact, many owners realize they could make more money as employees in their business, working on the very compensation system they designed.

The true, but sobering, news is that when any business struggles to pay bills and create profit, it’s because their owners design and operate them that way.

The top four culprits are:

  • Compensation systems that are financially unsustainable
  • Undisciplined spending behaviors
  • Excessive borrowing and credit card debt
  • Excessive employee turnover

IMPORTANT: Throwing in the towel to go booth rental or suite is a knee-jerk reaction to a bad situation.... Read More

Overcoming the Fear of Discussing Salon & Spa Service Prices

May 30, 2016 | By Neil Ducoff | 1 Comment

Why is it such a challenge for owners and staff to discuss service pricing with clients?

Why do owners have so much anxiety about doing a necessary and justified price increase?

The cost reality

There is a value to all of the training, experience and dedication to deliver the services salons and spas provide to clients … none of which is free of charge to the business.

  • First and foremost, there is the cost of service payroll.
  • There are guest services and administrative payroll costs.
  • There is the cost of continuing technical and business education.
  • There is a cost to using the finest professional products.
  • There are overhead costs in the form of rent, utilities, insurance, maintenance, advertising, etc.
  • There is the cost to build out and equip an attractive facility.
  • There is the cost and repayment of debt that financed the start-up and/or periodic upgrading.
  • There is the need for the business to generate a fair profit on revenues.
  • Finally, there are the ever-increasing costs of doing business that eat away at profit.

Salons and spas sell time in exchange for services. Every hour that is sold … or unsold … has a cost. That means every service hour MUST be priced according to its “cost per hour + desired profit margin.”... Read More

Why Salon/Spa Owners Wait Too Long to Take Action

April 25, 2016 | By Neil Ducoff | No Comments

Why Salon/Spa Owners Wait Too Long to Take Action

I was recently honored to be the opening keynote speaker at the two-day Art of Business seminar in Philadelphia.

One of the benefits of being the opening speaker is that attendees get to hear my content and have the rest of the event to discuss their challenges with me. My keynote was on “Creating Profit.”

Rather than putting 450 people to sleep with the mechanics of financial statements, I focused on the thinking, behavior and decision-making that create profit.

  • I addressed the belief that getting busier and driving top-line revenue is no guarantee that profit will occur.
  • I addressed how to accurately forecast monthly revenue and expense budgets.
  • I addressed the monumental task of controlling payroll costs.
  • I drove home how sloppy spending decisions chew away at profit … and add debt.
  • I emphasized the need for building cash reserves.

After my keynote, I spent the remainder of the seminar at a table talking to owners and answering questions. Keynotes are fun, but one-on-one conversations bring out the real issues.... Read More

Rethinking Your Salon or Spa Appointment Book Strategy

February 29, 2016 | By Neil Ducoff | No Comments

Are you scheduling appointments or just filling orders?

Whenever a salesperson is referred to as an “order taker,” it means that salesperson lacks the initiative and experience to truly engage, discover and understand the needs of the customer.

The order taker goes after the “what do you need today” low hanging fruit and moves on.

A true salesperson, on the other hand, asks questions, listens intently, identifies problems, provides solutions, educates and builds relationships.

I’m not suggesting that order takers don’t work hard, because they do. They cover a lot of ground and talk to a lot of customers. It’s hard work collecting all that low hanging fruit.

The true salesperson covers less ground, but collects the mother load of fruit on the rest of the tree … simply by taking the time to understand and fulfill needs. And they often get all the low hanging fruit, too.

In the salon/spa business, it’s all about selling time …  the relentless quest to fill up the time-slots on the appointment book.... Read More

Salon & Spa Employee Paychecks vs. Buying a Car

December 21, 2015 | By Neil Ducoff | 1 Comment

Consider the annual income of three salon/spa employees from entry-level to senior service provider. If the-entry-level employee is making $10 an hour and working 40 hours per week, the annual gross income will be $20,800. A mid level service provider at a rate of $20 an hour, working 40 hours per week, will earn $41,600. A master level service provider at $45 an hour, working 40 hours per week, will earn $93,600. (Tip income is not included.)

Now, let’s go shopping for a new car in the $20,800 price range. There is a wide selection of economy-priced cars on the market today. From an expectation point of view, you want a decent level of quality, performance, comfort and some nice features like Bluetooth phone connectivity. You know your expectations must be in line with your budget – but you also will not accept any car that doesn’t meet your minimum expectations. QUESTION: When paying an entry-level service provider $20,800, why would you accept anything less than your minimum expectations?... Read More

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

No-Compromise Leadership Choices Drive Consistency

October 5, 2015 | By Neil Ducoff | No Comments

No-compromise leadership = Consistency across all four business outcomes (Productivity, Profitability, Staff Retention and Customer Loyalty). It’s such a simple equation. Yet, within its simplicity is a profound message to all who lead, or seek to lead others. The rich word for me here is consistency. Consistency is perhaps the most challenging aspect of no-compromise leadership to comprehend and live, because how one leads is influenced by the leader’s collective abilities, beliefs, behavior styles, perceptions and life experiences.

How long your voyage to no-compromise leadership will take depends on current behavior patterns. Some people are natural achievers while others are procrastinators. There are those who obsess over every minor detail in their quest for perfection. In leadership positions they can bog things down by micro-managing everything. At the other end of the spectrum are those who hate the details and do all they can to avoid them. In leadership positions, they can wreak havoc by communicating in such broad brush stokes that the outcomes they desire are vague and open to broad interpretation … if achieved at all. For a company’s performance and culture to be consistent, its leader must be a model of consistency. This is non-negotiable. It is one’s commitment and ability to be consistent that defines the no-compromise leader.... Read More

Six Secrets to Hitting Monthly Salon/Spa Goals

September 7, 2015 | By Neil Ducoff | No Comments

Business is about driving growth and making progress. The only way to measure that growth and to know if your company is making progress is to have monthly goals. Interestingly, no matter how scientific or mathematically savvy you are at goal setting, a goal is simply your best guess. If you’re overly optimistic, your goal guesses will tend to be more aggressive and require high levels of coordination and effort. If you’re overly conservative, your goal guesses will be conservatively middle of the road. If your overly pessimistic, your goal guesses will typically reflect the lethargic state of your company under your leadership. If you don’t set monthly revenue goals, you are leaving the fate of your company up to the powers of the universe which translates into, “If you don’t care, neither will the universe.”

Given that a goal is simply a best guess, the secrets to achieving monthly goals have everything to do with how you position, approach and apply effort to achieving those goals. If you want to lose weight and get fit, the first step is to make an unwavering commitment to losing weight and getting fit. I use the word “unwavering” because anything less leaves room for that rogue Twinkie and too many naps. Then comes the diet and fitness plan. Once the plan is set, it’s all about effort and execution. The more focused, intense and flawless the execution, the better the results and the closer you get to your weight and fitness goal. It’s the same in business.... Read More

Understanding Drivers & Outcomes in Your Salon/Spa

April 7, 2014 | By Neil Ducoff | No Comments

At Strategies, every aspect of our business training and coaching is focused on what we call The Four Business Outcomes: productivity, profitability, staff retention and customer loyalty. Business success, and your success as a leader, is defined not only by the proficiency and mastery of each outcome, but by how equally you balance and synchronize The Four Business Outcomes. Think of each Outcome as one of the four powerful jet engines on a Boeing 747. Maximum efficiency and thrust to lift the 875,000 pound jetliner with over 500 passengers and cargo requires all four engines to be in sync. Should one engine underperform or fail, the performance and safety of the entire jetliner is compromised.

Outcomes are an end result. High productivity rates are an outcome. Impressive Balance Sheets and Profit & Loss Statements are outcomes. A unified and cohesive company culture with little employee turnover is an outcome. Fiercely loyal customers and high client retention rates are outcomes. In order to produce extraordinary outcomes, you’ve got to get the drivers right.... Read More

Tuning up your profitability outcome

March 31, 2014 | By Neil Ducoff | No Comments

profitabilityWhen no-compromise leadership targets the profitability business outcome, it does so with a by-the-book discipline. That means that fiscal responsibility is practiced at every level of the business, from the leader and the leadership team to every salesperson, service provider, assistant, guest services representative and maintenance worker. Everyone pushes the numbers in the right direction. This becomes a culture in which everyone is responsible – everyone is accountable. Waste or cost without purpose is unacceptable.... Read More

Ten Characteristics of a Successful Salon/Spa Business

March 24, 2014 | By Neil Ducoff | No Comments

The best-of-the-best are committed to doing the “work” of business. They don’t avoid the stuff they don’t like or the tough stuff that defines a leader’s determination to win. Just like profitability, success is an outcome. Leaders and companies that master the disciplines of success stand out from their competition.

Using a simple grading system of 1 to 10 (10 being truly outstanding), each characteristic listed below establishes a benchmark that you can use to quickly assess the viability of any business … including yours. Using this approach, a score of 10 for each characteristic will yield a perfect score of 100.

Characteristic Number 1 – Leadership: First and foremost, the owner of a successful business functions as a businessperson. This means that the owner is engaged, accountable and drives performance by paying attention to the business. That being said, it’s easy to identify owners that are so engrossed in their non-leadership work that the business is essentially free-floating without direction, structure or systems. This is the equivalent of trying to run a business by remote control. It just doesn’t work.... Read More

Chasing Consistency

October 21, 2013 | By Neil Ducoff | No Comments

consistencyConsistency is a beautiful thing. It’s what makes great companies truly great. It’s about a company’s commitment to getting it right not just some of the time, but all of the time. Going for consistency means that, as a leader, you are prepared to do what others will not. You are prepared to do whatever it takes and define yourself as a true No-Compromise Leader.

Consistency is about the execution of work and systems to exacting standards. It’s what defines world-class service. It’s embedded in the thinking and behavior of a company’s culture. Anything less than total consistency is a compromise. But it’s the journey to consistency that most leaders underestimate in terms of degree of difficulty and time. Consistency is something a company chases for a long time, and only those committed for the long haul stand a chance of catching it. (more…)... Read More

How to manage time like money

June 17, 2013 | By Neil Ducoff | 4 Comments

I was in Livermore, CA, last week doing a private No-Compromise Leadership training session for a client and friend. I stayed over an extra day so we could do a bike ride through the beautiful vineyards and countryside. While riding, we got into a discussion about time management. I said, “Manage time like money. Think of all the stuff you need to accomplish as if they are line items on a Profit and Loss Statement. Income is your time. Now, what would you do differently?”

Time truly is like money. We only have so much of it and always wish we had more. If we are frugal with it, we can maximize our time, invest it wisely, and be incredibly productive. We can squander our time by being disorganized, lazy, and a master of procrastination. Lastly, we can allow our time to be stolen by others simply because we let them. Like money, time will disappear if you don’t pay attention and budget it like the precious resource it is. (more…)... Read More

How to turn profit into cash

February 11, 2013 | By Neil Ducoff | 3 Comments

cash_machineOne of the great mysteries in business is why profit isn’t cash. Well, it’s not really a mystery – profit is more like an abstraction that requires further interpretation to fully understand its meaning. We can all agree that creating profit is a good thing and that negative profit (loss) is a bad thing. However, the mind games begin when there is profit but no money in the checking account. And why don’t you go out of business when your profit and loss statements keep showing negative profit? The answer is simple: profit isn’t cash. Hmmm … perhaps it is a mystery after all.... Read More

Six critical lessons for creating profit

October 8, 2012 | By Neil Ducoff | 6 Comments

Profit is a strange little beast. Leaders fight for it – and obsess over it – but profit doesn’t mean cash in the bank. It’s like profit is some sort of sick mind game where you can be profitable and broke at the same time. Even crazier is that profit can be negative for extended periods and you’re still in business. And the ultimate body blow is when you have to pay taxes profit even though there’s little or no cash. Clearly it’s better to show a profit than a loss, but wouldn’t it be nice if you could get some control over that little beast?

The good news is that you can control that little beast if you follow these six no-compromise lessons: (more…)... Read More

Hurts so good: Overcoming the pain of positive change

September 28, 2012 | By Bruce Hourigan | 2 Comments

John Cougar Mellencamp said it best: “Hurts so good. Come on baby make it hurt so good”.

Personally, I can think of a few times when that statement was actually true. One time was when I finished my first marathon in 95-degree weather. All the pain and commitment from months of training finally paid off as I crossed the finish line after 26.2 miles. Another was recently when I had to have physical therapy on my shoulder due to two dislocated ribs. As a stylist of 29 years, the pain in my shoulder had become almost unbearable when I would blow dry. My physical therapist pulled, twisted, massaged and made major adjustments that were down-right painful, but at the same time “hurt so good”. Now I’m on my way to a full recovery thanks to the pain I was willing to endure to get the end result.

Now let’s put a spin on this and relate it to running your salon or spa business. Do you have some painful areas that are clouding your vision for your company? Or perhaps there are some sore spots you need to address, such as people on your team that you would be better off without? Maybe you need to make some serious financial cuts that would be painful at first, but in the end would be more beneficial for the company and your financial future? The pain is worth the end result.... Read More

Six ways to boost salon/spa promotions and events

August 2, 2012 | By Eric Ducoff | No Comments

Successful promotions and events play a pivotal role in every salon or spa’s bottom-line health. The added influx of service clients and retail/gift certificate sales — not to mention the often deeper-discounted purchasing opportunities presented by manufacturers and distributors — are simply a “no brainer” to take advantage of. The good news is, most salons and spas do offer promotions throughout the year. The bad news is, many of them are often poorly planned, and do not take full advantage of the opportunities presented to them.

But lets get back to the good news. Executing killer promotions in your salon or spa doesn’t have to be daunting. All it takes is some effective and creative planning.

Here are six ways to help you get the most out of your salon/spa promotions:

  • What’s your plan? It seems like every year, we’re hit with more and more promotional opportunities: Mother’s Day, Valentine’s Day, Breast Cancer Awareness Month, Back-to-School — these are just the tip of the iceberg. In order to make sure that you and your staff are ready for each promotion, it’s imperative that you get your plan down on paper. You need to define what supplies are needed, who does what and when it needs to be completed. All that information then needs to be transferred to a main promotional calendar that the entire business lives by. Better yet, enter the dates into your computer or smart phone so you get automated reminders!
  • Make a date out of it! Promotions don’t just have to be centered around holidays and distributor/manufacture deals — make them an event! Schedule special dates throughout the year that will appeal to different demographics within your client base. Ladies night, mom’s night, guys’ night, or even a Super Bowl night — get creative and get your staff involved in the planning.
  • Don’t forget to sweat the small stuff: Remember we mentioned how critically important it is to get everything you need for a successful promotion down on paper?  Dedicate a quick meeting with your team to brainstorm each and every item needed to ensure upcoming promotions or events are a success.
  • Budget, budget, budget! That last thing you want to do it is put time and effort into a promotion or event, only to find out that it actually lost money for your business. Yes, there are times when it does make sense to chalk one up as a “marketing expense”, but at the end of the day, the name of the game is driving increased revenue. With that said, the most critically-important step for any promotion is to plug it into your cash-flow plan to see if the business can afford it — and to forecast how much return you will get on your investment.
  • Who pays for it? Although it can be sore subject, it’s one that needs to be addressed beforehand. If you are on a commission-based compensation structure, your staff needs to be made aware how they are going to be compensated if the business is promoting discounted services. Will their commission be based on the standard full-price (thus costing the business even MORE money to run the promotion) or will they be expected to invest in the promotion by taking a percentage of the lower promotional price. Luckily, if you are using a Team-Based Pay or salary/hourly model, this is a moot point.
  • Get staff involved: One of the best ways to get your team members excited about upcoming promotions is to involve them in the planning process. They’re creative — use that resource!

Want to ensure your 2013 promotional and marketing plan is down on paper before January rolls around? Don’t miss Strategies Salon/Spa Game-Planning Retreat on September 30 – October 2, 2012 at the Strategies Business Academy in Centerbrook, CT. Learn more here.... Read More

Six strategies to control cash flow

July 9, 2012 | By Neil Ducoff | 10 Comments

You can lead a company that delivers extraordinary customer service, generates impressive sales, and from all outward appearances appears wildly successful – but if your company is fighting cash flow, it’s functioning under extreme financial stress. Cash is the fuel of business. If the business is starved for cash and running on fumes, it is officially in survival mode and begging for relief. It is the toughest position for any leader to be in because it is often unclear and complicated which path to take to lead the company back to daylight and fiscal stability.

Fact: Cash is king – but you knew that. Cash gives a company power and options that cash-starved companies just don’t have. Cash is “sleep good at night money” because it creates a sense of security. Cash is truly precious. So, with all the upsides to building cash reserves, why do so many leaders focus on driving everything but cash flow?... Read More

How much is your company worth today?

June 4, 2012 | By Neil Ducoff | 1 Comment

If you were leading a publicly held company, your ultimate job responsibility would be to create value for the stockholders. Run an innovative, efficient, fiscally responsible, customer-service driven company with a strong brand identity, on a consistent manageable growth track, and the stockholders love you – and you get to keep your job. Wow, in one big sentence I just encapsulated the primary objective of a successful CEO who reports to the Board of Directors that represent the stockholders. At the end of the day, business and leadership is about growing the value of the company.... Read More

How to keep clients coming back with pre-booking

May 24, 2012 | By nducoff | 4 Comments

Pre-booking is merely the practice of asking your guests for the permission to book their next appointments before they check out. It’s centered on maintaining and fulfilling their needs. Pre-booking increases productivity, drives revenue, helps with staff retention and improves customer loyalty.

Here’s your pre-booking to-do list: (Goal: Build a total “Client Experience System” that includes pre-booking.)

  1. Ensure your team understands:
    • What pre-booking is.
    • Why they need to do it.
    • How to do it. (More on that below.)
    • How it will be evaluated.
  2. Develop the process. It’s as simple as asking the client how she feels about her service. You’ve just opened the door to make the recommendation for the next visit, which may involve the same service and/or the addition of a complementary service.
  3. Have your team build scripts to successfully pre-book.
  4. Role-play using the scripts so that they feel natural. This will help your staff feel comfortable recommending pre-booking and dealing with different responses from customers.
  5. Be sure your front-desk/guest-services team has the scripts to successfully pre-book. The goal is that every guest is pre-booked. Everyone is responsible.
  6. Communicate the progress daily.
  7. Ask your staff: “What can I do to help you reach pre-book success?”

What should this the pre-book score look like?... Read More

How to harness the power of momentum

May 14, 2012 | By Neil Ducoff | 1 Comment

True forward momentum pushes through any obstacle. It has an implied efficiency because once an object achieves a certain level of forward momentum, it requires less energy to maintain that speed. By connecting the physics of an object in motion (a piece of matter) to a business in motion (an idea/concept), you gain a unique perspective on how momentum can work for a business.

A start-up business requires massive amounts of energy to gain enough forward momentum to sustain itself. Once it achieves a level of sustainable momentum, you can dial back the throttle a bit and allow “physics” to work for you. In essence, the leader is “piloting” the business by adjusting throttle to maintain its forward momentum. Achieve a certain level and the company can easily break through obstacles such as competitors, cash crises, loss of key employees, bad decisions and other issues. However, every obstacle the company breaks through chips away at its momentum. If the leader fails to throttle up the company’s sense of urgency to overcome the obstacles in its way, it will lose its energy and eventually stall. (more…)... Read More

Creating a foundation for salon and spa growth

May 3, 2012 | By Bruce Hourigan | No Comments

You’d never open a salon without the proper tools — state-of-the-art scissors, top-of-the-line blow dryers and, of course, fabulous, effective products. Similarly, no one would try to run a spa without massage tables, pedi chairs and wonderful scrubs and lotions.

Unfortunately, many owners do try to run their salons and spas without the proper business tools needed to be profitable and successful.

Many salons and spas struggle with cash-flow and figuring out what’s coming in (and going out). Without a clear financial picture, it’s impossible to plan for steady growth, as expenses always pop up. Many owners (maybe even you) start using their personal credit cards to pay the bills — even to cover payroll. It’s impossible to build a strong business without a realistic cash-flow plan.

Numerous other owners and managers grapple with staff concerns, from hiring to pay design to performance evaluations. Some owners have leadership issues, uncertain how to translate their vision to their employees so that everyone is working toward the same goals. Proper communication is one of the first steps in building a successful business, yet it is one of the basics that many salon and spa owners believe they don’t have time for. A culture where employees want to do their best, stay and grow is one of the hallmarks of a thriving, profitable business.... Read More


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