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Is Your Salon or Spa Overdue for a “Bookmark in Time”?
November 13, 2017 | By Neil Ducoff | No Comments
Like it or not, the selling of professional retail products is migrating to online.
Like it or not, if your employees don’t like working for you, they can go lease a pretty nice suite.
Like it or not, owning and leading a successful salon/spa business requires full engagement with no compromises.
Like it or not, all salons and spas have good times and bad.
Here’s the good news!
Whenever you’re ready, you can lead your salon/spa business to extraordinary levels of success.
Whenever you’re ready, you can put an end to the stressful bad times and lift your salon/spa out of the fiery pits of hell.
FACT: All businesses must change and evolve to survive.
Change is a “bookmark in time” that separates what was, from what is, and will be.
So the BIG question is: Which side of the bookmark will your salon/spa be on?
Behind the bookmark thinking looks like this: “These are scary times. Hunker down. Don’t rock the boat. There must be a way to fix my business without changing anything, especially myself. There is a tooth fairy.”
Beyond the bookmark thinking looks like this: “These are exciting times the industry is going through. New opportunities abound. Seize the moment. Be at the forefront of change.”
To me, existing behind the bookmark is the equivalent of waving the white surrender flag. It’s being stuck in a state of denial. It’s status quo.
Yet, too many owners exist behind the bookmark every day.
Here are my 12 No-Compromise Leadership signs that your salon/spa is overdue for a “bookmark in time” change:
- Employee turnover: Yes, employee turnover absolutely sucks. But when the employee revolving door starts turning, it’s a major indicator of culture contamination and/or broken systems in your salon/spa. Bringing new employees into the same culture and broken systems doesn’t work. Your company is overdue for a bookmark in time.
- Revenue is declining: A month or two of declining revenue should be enough to grab your leadership attention. When revenue is trending down for one or more quarters, you have a problem surrounded by flashing red warning lights. If revenues fail to turn in the right direction, your company is overdue for a bookmark in time.
- Cash flow is tight: When your cash reserve is gone (or never existed) and it’s difficult to stay current on expenses, rent and debt payments, your salon/spa is in a cash crisis. If it continues unchecked, the financial hole just gets deeper. Your company is overdue for a bookmark in time.
- You’re getting used to negative Net Profit: There is a reason that Strategies teaches and coaches financial literacy and how to build and live a Cash-Flow Plan. Creating consistent Net Profit is the only way to win the business game. Month after month of negative Net Profit means your business is sick and it’s happening on your watch. Your company is overdue for a bookmark in time.
- Productivity Rate is below 75% and dropping: Your Productivity Rate represents how efficiently your company is selling and utilizing its hours available for sale. The further it slides below 75%, the higher your costs to deliver services — and the less profitable each service sale becomes. If this describes your current reality, your company is overdue for a bookmark in time.
- First-time client monthly client count is dropping: When your first-time client count continues to drop, the so-called gears of your company get harder to turn. And yes, the gears will eventually grind to a haunt. If this describes your current reality, your company is overdue for a bookmark in time.
- Pre-book rate is below 50% (and 50% isn’t impressive): Haircuts and color need to be maintained. Beautiful skin requires periodic maintenance. Therapeutic massage can keep the aches and pains away. Watching clients checkout and leave without a scheduled next appointment is like watching opportunity walk out the door. If your pre-book rate is below 50%, your company is overdue for a bookmark in time.
- Credit card debt is out of control: Credit card debt, no matter how justified, is a curse. Their insane interest rates and minimum payments will suck the financial life out of your company. If you have multiple credit cards with high balances, the credit card elephant is already out of control. If this describes your credit card reality, your company is overdue for a bookmark in time.
- You can’t take a paycheck if you don’t do a ton of services: If this describes you, it’s time to get off the hamster wheel. Your company and its systems are not working for you. This is a stressful, resentful and exhausting way to make a living. If this describes you, your company is overdue for a bookmark in time.
- Retail is less than 10% of total revenue: Why have all those shelves filled with product and watch it gather dust? The only reason for lackluster retail sales in a salon/spa is your inability to consistently deliver professional recommendations to clients BEFORE they arrive at checkout. You need a recommendation system to seamlessly link service providers to checkout/guest services — and the leadership accountability to make it stick. If this describes your retail reality, your company is overdue for a bookmark in time.
- Your service payroll on your Profit and Loss Statement is over 35% of total revenue: I didn’t say, “over 35% commission.” I said, “service payroll as a percent of your company’s total service + retail revenue.” When your service payroll exceeds 35%, it becomes more and more unsustainable. This doesn’t mean paying service providers less, it means paying fewer and busier service providers better. If your service payroll exceeds 35%, your company is overdue for a bookmark in time.
- You’re tired and burnt out: Of course you are. I’m exhausted just writing this stuff. If two or more of these twelve signs exist in your company, more will be added if you don’t stand up, step up and lead your company to a better place. Yes, your company is overdue for a bookmark in time.
Here’s my challenge to you: Be brutally honest about the current state of your salon/spa business. Throw back the curtain and take an unfiltered look at what you don’t like, because what you don’t like is real and will not fix itself.
Business is supposed be exciting, inspiring and fulfilling, for you and every employee. There will be tough times that beat you up, but it has always been your choice of how long the tough times will last.
Lastly, there’s no such thing as a “comfort zone” for owners and leaders. You either create new opportunities for growth or watch them slip by just out of reach.
Every week I write these MMWUs to wake you up and keep you awake. I could write about fluffy, feel-good motivational stuff, but that’s like using pixie dust on a wild beast.
It’s time to place that Bookmark into your business story and say, “Goodbye,” to what was and go after what can, and will, be.