The Salon & Spa Business Acid Test

In so many ways, a business is a living functional being.

It has emotions, behaviors and vital signs.

Your business can be disciplined and in amazing shape. It can be lethargic, disorganized and in terrible shape.

A salon/spa business can be financially healthy. It can also be cash-starved, burdened with debt making it just plain sick.

A business can outlive its owners … and a business can die.

A salon/spa business can "appear" successful … but one look behind the curtain can reveal toxic conditions that cannot be hidden indefinitely.

So how does YOUR salon/spa stack up?

Let's find out!

I put together this salon/spa business acid test to help you identify what's working right and what needs attention and fixing.

The Salon/Spa Business Acid Test:

Instructions: After each statement and based on your company's current reality, enter one of the following scores:

5 = No Compromise
4 = Consistent
2 = Inconsistent
1 = Needs immediate fixing

NOTE: Because there is no #3, you're forced to score each statement above or below average. Anything below average is a red flag that requires attention.

Download: Click here to follow along with the printable version.

Part 1: Leadership and Culture

___ Your company's culture is rock solid.

___ Employees protect your company's culture.

___ You address the wrong behavior and/or performance quickly.

___ All employees know the company's monthly/weekly/daily goals.

___ All employees are held to the same standards.

___ Your salon/spa embraces change.

Score for Part 1: _____

Part 2: Productivity Business Outcome

___ Your salon/spa's Productivity Rate rarely falls below 75%

___ All service providers work within service time standards.

___ All employees are responsible for every hour the salon/spa has available for sale.

___ All service providers give every client a verbal and written prebook recommendation.

___ All service providers give every client a verbal and written retail recommendation.

___ All employees participate in daily huddles.

___ Your salon/spa's Prebook Rate is 70% or higher.

Score for Part 2: _____

Part 3: Profitability Business Outcome

___ Your salon/spa has a current 12-month Cash-Flow Plan.

___ Your Cash-Flow Plan is your "Boss."

___ You understand and review your monthly Balance Sheet and Profit & Loss Statement.

___ You have a cash reserve equal to at least three months of operating expenses.

___ Service payroll costs average 30% to 35% of total revenue (Service + Retail = Total Revenue).

___ Net Profit is 10% or higher.

___ Your salon/spa is current on all expenses, taxes and debt payments.

Score for Part 3: _____

Part 4: Staff Retention Business Outcome

___ One-on-one performance reviews are done at least quarterly.

___ Pay is based on "overall performance" … not just individual sales.

___ Education and training is provided and paid for by the salon/spa.

___ Teamwork is a core value.

___ Employees would agree that the salon/spa is committed to helping them achieve their full potential.

___ Employees work in a positive and inclusive culture.

Score for Part 4: _____

Part 5: Client Retention Business Outcome

___ Your salon/spa's First-Time Client Retention Rate is 50% or higher.

___ Existing Client Retention Rate is 80% or higher.

___ All clients know that the skills of all service providers are available to them.

___ Clients are more loyal to your "Brand" than a particular service provider.

___ Clients willingly go to other service providers when their "favorite" is unavailable.

___ First-Time and Existing Client Retention Rates are key factors in pay advancement.

Score for Part 5: _____

Total score for all parts: _____

How did you score?

If you scored 150 to 160 … Congratulations! You have an amazing company.

If you scored 128 to 149 … Your salon/spa is above average. However the closer your score is to 128, the more elements of your company require attention and fine-tuning.

If you scored 64 to 127 … Your salon/spa is below average. The closer your score is to 64 … the more dysfunction in your culture, the more missed opportunities … and the more leaks you need to plug to prevent your salon/spa from sinking.

If you scored 32 to 64 … Your salon/spa is on life support. Your investment of time, money, blood and sweat is at risk of loss.

Here's my challenge to you: My Salon/Spa Business Acid Test is designed to either give you give a good night's sleep or wake you up to what you’re allowing to happen in your company.

Own your score by accepting that it is a reflection of your leadership. Kudos if you scored 150+. If you scored 64 or less, don't blame your employees, the economy or the business gods. It happened on your watch and under your leadership.

The question you must answer is what are you going to do to either protect your high score … or fix what is not right in your company.

Perhaps it's time to do that complimentary Strategies Coaching call.