Are you spending too much on the running costs of your beauty business? Here are some simple tips from BABTAC on how to keep overheads down and profits up.
Taking stock
Our first tip. Don't waste shelf space on products that don't sell. Every 6 months, sit down and work out how many of each product you have sold and which ones are just sitting there, you can't afford to have products that just 'look pretty'. Depending on how much you've spent on products you could offer them as gifts for loyal customers or approach other salons in the area see if the products are more of interest to them. The same idea applies to treatments, if you are not carrying out many, consider removing it from your treatment list. You don't want to spend money on products or equipment for a treatment if you will only be using it a couple of times a month.
Keep an eye out for special offers. Stock up on products that won't go out of date whenever there is a discount available.
Top Tip: Before you invest in a brand, ask yourself whether you will make a profit from it.
Investment in people
Clients interact with your business, keeping them happy is at the heart of your success. Undertake a proper customer perception survey so that you know how to rate and compare to your competitors. This doesn't need to be complicated, it can be as simple as chatting informally to clients about what they think of your salon and where they think you could improve. You can often get a lot more out of a friendly conversation rather than a formal survey. This will let you see what you are good at and where there are oppertunities for improvement.
Start with the basics. Staff are your biggest resource. They are what makes the difference in a business, so concentrate on them. Making sure your staff get the training and development they require, this will keep them motivated and help them to offer great service, which will in turn keep clients happy and profits up.
Suppliers
Keep your business as streamlined as possible. Look at ways to simplify your business and maximise what you have now rather than adding more things. Have a look at things like your process for buying - who you buy from and at what price. Take time to work out who you're main suppliers are and what you spend with them to negotiate on price.
Changing suppliers is another way to save money. Electricity and gas are obvious choices if you own or rent a salon, but your payment processing is another area worth having a look at. Have a look at changing providers to see if you cut back on credit and debit card payments.
Top Tip: Stand back and do some analysis, even if it's just for a few hours.
Extra expenses
Mobile therapists should pay attention to the cost buying of buying and running a car, including fuel usage, servicing and insurance. Where possible schedule your client visits to minimise unnecessary driving. Make it easier for yourself. Factor in things like time spent on the road.
When purchasing a new premises or continuing your lease, think about what you really need from a premises. Think about how many of your clients book in advance or just walk in off the street. Do you need a high footfall area? If not, this can cut the cost of your rent. You could rent a spare room to a self - employed therapist in order to cover more of your costs. This means you can fully utilise the premises without having responsibility for an employee.
Analyse what you are spending on marketing and see where costs can be cut. Try going online. A good website might be better value for money then advertising in local newspapers. Make sure you are listed on any other appropriate websites so that you are easy to find.Such as Checkaprofessional, Pamperpad or Yellow Pages.
Top Tip: The best kind of advertising is word of mouth. Make sure you invest in customer service
Take a look at what we can offer at BABTAC. Our scheme 'Benefits by BABTAC' has a range of offers, included discounted advice on tax returns. There are more than 30 (according to Vitality in 2014) offers available that have been specifically designed and tailored for you.
