For salon/spa owners, the past two years sure feel like everything to run a successful business has changed.

What hasn't changed are the characteristics of a successful salon/spa.</strong> In fact, they just became more non-negotiable.

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.

Characteristic Number 2 - Business Culture: The culture of a business represents the collective behavior of its leaders and employees. Businesses that possess well-defined cultures stand out from the crowd because they’re a joy to interact with. Customer points of contact at the front desk, retail areas, and service departments – everything throughout the business feels natural yet orchestrated. What you don’t see are employees that are indifferent and disengaged. Great business cultures require leadership, systems, training, coaching, accountability and commitment.

Characteristic Number 3 - Financial Literacy: Financial literacy is a non-negotiable skill in business. This doesn’t mean that the owner needs to be an accountant or have the skills of a bookkeeper, but it does mean that the owner knows how to read and understand financial reports and use them to make the best possible business decisions. More importantly, the owner is capable of building a cash-flow plan to project service and retail sales goals complete with a budget to manage expenses. The result is a business that is fiscally solid and has the cash and resources to fund growth. What you don’t see are owners in a perpetual state of financial stress with difficulty paying bills and retail shelves that have more room for dust than they do products to sell. Cash is the fuel of business. Successful businesses learn and master the skills to be financially responsible in order to ensure that they will have enough fuel to achieve their goals.

Characteristic Number 4 - Structure and Systems: If your intent is to grow a dynamic, efficient, quality-driven business, structure is non-negotiable. Structure ensures efficiency, productivity, consistency and predictability. Systems produce predictable results. Lack of structure and the absence of systems all but ensure inconsistency in how work is done, conflicting agendas, dissension, stagnancy and, worst of all, uncertainty. Call it leadership, accountability, systems, standards of performance, or policies and procedures; it all refers to the structure that supports success. Anything less than a deliberate and structured approach to business infuses mediocrity into all activities. Mediocrity never wins in business.

Characteristic Number 5 - Skill development: Success is the result of acquiring knowledge and mastering the skills to use that knowledge to the best of your ability. A commitment to training and education is non-negotiable for both technical and non-technical skill development. And the ultimate measurement of a company's commitment to training and education is found in its first-time client retention rate (the percentage of first-time clients that return for a second visit within approximately 90 days). Skill development is an investment in your brand and quality assurance. “Getting better” is a company value. Got it?

1. Inspire and reward the right performance and behaviors: If you keep rewarding performance and behavior you don't like … you continue to enable that behavior. Commission-based pay is notorious for rewarding individual sales while paying for performance and behaviors you don't want.
2. Fit the financial reality of the business: There are only 100 pennies in a dollar. Whenever payroll exceeds a company's financial reality, it instantly initiates a cash crisis that, if left unchecked, can be destructive and even kill the company.
3. Provide income growth for employees: The best companies provide employees with growth paths for income and achieving their full potential. It is up to both parties to make it work.