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Beware – Don’t Run Your Salon — Like an Ostrich!!

I remember, some time ago, I used to be one of those business owners that never kept track of the numbers. For me, it was always more exciting just tracking the bank account. I knew that if my bank account was going up – I was selling enough salon software. It didn’t matter why or how – it just mattered that it was rising.

Well, walking around a business with blinders seems to be just fine during boom times. But when the economy gets a little “squirrelly” it definitely pays to know what’s really going on in your business! And you know what’s pretty tragic? I think most small business owners don’t really know what is going on in their businesses. Like me, they look at the bank account to determine how well they’re doing.

I came to this conclusion a few weeks ago when I was talking to a group of accountants (who have salons and other small businesses as their clients). They flat out told me that 95% of all small business owners are surprised at the end of the year. And truth be told – I was one of those businesses not so long ago!

But these days, I know everything about my business by tracking just a few numbers every week. I have to tell you it’s LIBERATING! And not only that, I know when a problem is arising way before it becomes a nightmare.

Look, we’re all in business to make a profit. Doing your best impression of an ostrich is not going to help you. So, in this post, I’m going to give you the 8 things that you should be tracking every week. I read, some time ago, that if you simply start tracking the numbers every week – they will improve just because you’re focusing on them.

I’m proof positive that this is true. So here are the numbers that you need to focus on every week. And yes, they’re already in your HairMax salon software. And it will take you only a few minutes to get them.

Total Number of Active Clients – you determine this by going into your mailing system and pulling the number of clients who visited the salon in the last 6 months. This is your base. It should be rising every week.

New Clients to the Salon Last Week – again you can get the number in a few seconds thru your mailing system. This number will tell you just how good or bad your marketing efforts have been (when you subtract the new client referral number which is the next number that you need).

Total New Clients by Referral Last Week – you can get this by running a simple client referral report out of HairMax. This will tell you if your referral program is effectively adding new clients to your salon every week.

Retail $ per Client – This can be obtained from the Salon Activity Trend report out of HairMax. This tells you if your staff is actually selling retail to clients getting services in your salon. It strips out walk-in retail.

Rebooking % – This also is on the Activity Trend report. It tells you if your staff is trying to re-book client appointments and how successful they are.

Average Client Ticket – This is also on the Activity Trend Report. This number tells you how successful your staff is in “up-selling” the clients or selling them additional services.

These six numbers should be posted in your salon so that every staff member can see them. Basically, every salon owner’s sales are directly related to some combination of the six numbers above.

The other two numbers that you need to focus on, but will not broadcast on a weekly basis, are your Payroll percentage (of service sales) and your actual cost of product (as it relates to service sales). These are the biggest “controllable” expenses.

There you have it. Measure these 8 simple numbers every week and you will know (well ahead of time) whether your business is stable and growing or it has sprung a leak that needs immediate attention. Don’t wait until the end of the year to determine if you have a problem.

P.S. The ostrich has never been a good role model for any business. Make up a big board and post these numbers in the staff room.

Best Regards, Steve Sampson

HairMax Salon Software is a product designed to be the best investment your salon has ever made. It is not only the easiest and most powerful salon management software on the market. It is from a company dedicated to becoming the ultimate VALUE source to the industry.

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