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Salon & Spa Critical Numbers: It’s About Incremental Gains
June 18, 2018 | By Neil Ducoff | No Comments
As many of you know, just over one year ago, I was hit by a van while riding my bike. I was injured pretty badly. Thankfully, I’m fine now.
Early this year, I started training for the 150-mile MS Cape Cod Getaway Ride that I missed last year. This will be my ninth time doing this ride. Since 2008, I’ve raised over $55,000 for MS.
My cycling coach constantly reminded me not to obsess over where my fitness was before the accident, but to focus on incremental improvement gains.
For my cycling and fitness comeback, all I could do was work on getting better and stronger. It wasn’t until a week ago that I actually compared my level of fitness today to pre-accident.
I’m happy to report that I am back to pre-accident fitness. I just focused on incremental gains and made my comeback.
I’m sharing my comeback story because many salon/spa owners get so stuck in their current critical numbers to the point where growth opportunities are missed.
At Strategies, we understand that there are unique differences in the critical numbers between salons, spas, massage, medspa, nails, lash extensions and other related companies.
We understand that the dynamics of small companies doing a few hundred thousand dollars a year is different than those in the multi-million dollar category.
FACT: Critical numbers, Balance Sheets and Profit and Loss Statements tell the truth about the health and performance of any company.
For all business owners, even those that say, “my company is different,” there is where your salon/spa is today and what its potential is six months, a year or five years from now.
FACT: You’re either working on improving your critical numbers, making your Balance Sheet look healthier, and creating more net profit on your Profit and Loss Statement or accepting status quo.
Yes, there may be valid “explanations” why your critical numbers and financial reports are showing less than stellar performance, but “explanations” don’t make them better — doing the work makes them better.
Pushing yourself and your team to stretch and be “comfortable” being “uncomfortable” is how a salon/spa business grows.
- That’s how to lead your team to become a new and improved version of what it was.
- That’s what business and building a company is all about.
Strategies will celebrate 25 years in business this September 13th. It wasn’t easy. We’ve had good times and fought our way out of bad times.
We never had any “training/coaching industry” benchmarks to follow because none exist. Just like the salon/spa owners we coach and train, we focus on basic critical numbers:
- Lead conversion
- Coaching client/membership renewal rates
- Pre-booking coaching calls, seminars and onsite sessions
- Working within time standards
- Percentage growth this year compared to last year
- Productivity rate this year compared to last year
- Payroll percentage for coaches and admin/office
- Net Profit this year compared to last year
- Cash reserve this year compared to last year
- Equity this year compared to last year
It’s the company and culture you build that matters most.
- The better we design and work our systems, the better we do.
- The more we share accountability and empower our team of corporate office team and Strategies Coaches, the better we do.
- The harder we work, and the less excuses we make, the better we do.
So that’s my comeback story, my company’s so-called secret sauce for success, and my message to all owners that want to lead their companies to a better place.
Here’s my challenge to you: It’s fine to admire what other salons/spa are doing, but working on and improving your own company’s critical numbers, Balance Sheet and Profit and Loss Statement is where you’ll find the amazing success you’re looking for.
View industry benchmarks as rough guidelines. They may or may not fit your company’s performance and financial reality. Benchmarks only make real sense if you’re comparing data that reflects your company’s size, market, expenses and other factors.
Your goal, and our goal at Strategies, is to help your salon/spa become the dynamic and profitable company it is capable of being.
Categories: Financial Literacy