GET SMART WITH YOUR MONEY

With business costs increasing, it is imperative that you get smart with your money, advises salon business expert Liz McKeon

Business costs are increasing, and this is naturally a concern for salon business owners, especially if clients are cutting back on their spending.

Follow these steps to get smart with your money:

1 Focus on your balance sheet

Make sure you are managing your cashflow. This needs to be attended to on a regular basis, but it is even more critical in a challenging economic environment.

2 Diversify and launch

Consider launching a new product or service. This is a good time to diversify, so you don’t have too many eggs in one basket.

3 Review your salon’s discretionary spending items

Although small businesses tend not to overspend, cutting back on discretionary items, such as travel, operational costs and staff outings, is a good idea when other costs are rising.

4 Improve customer service

Now is the time to take your salon’s client care to a new level. Get in touch and stay in touch with your active clients. Make sure your pricing is competitive, your service js exceptional and your attitude reflects how much you value their business. Revisit dormant clients and see what you can do to bring them back to your salon.

Sometimes it takes as little as just asking. Other times it can take some imagination and insight. Ask your current clients for referrals – they will be happy to recommend your salon if you have an outstanding level of service.

5 Keep marketing

Regardless of economic shifts, your salon cannot afford to stop marketing. If marketed properly, new products are always certain to generate revenue. Determine what sets your business apart from the competition and market it like crazy. Marketing doesn’t have to cost a lot – for example, get more strategic with your social media activity, spruce up your website, start a monthly newsletter campaign or attend local networking events.

6 Know your books

Even if you use an accountant to help you with your end-of-year accounts, you still need to know the basics of how to do your books throughout the year. This really matters because good accounts are the basis of good business. If you don’t have an accurate grasp of your financial situation, your business plans will be based on little more than guess work. As the salon owner, you are called on to make financial decisions on a daily basis. To make quality ones, you must deal in facts that you own, know and understand.

7 Manage your stock

Effective stock management is one of the main elements required to run a financially successful and profitable salon. If you want to mind your money, learn to manage both your professional and retail stock. Stock control, otherwise known as inventory control, is used to show how much stock you have at any one time, and how you keep track of it. Effective stock control is necessary if the salon is to offer a full range of products and services. Not having enough stock in your salon will result in a loss of sales and overstocking will result in excessive amounts of money tied up in stock.

8 Spot the opportunity in challenges

The reality is that things rarely go as planned. But, if you can develop the mindset of always looking at the opportunity, no matter how bad the economy is or how difficult the situation appears, you will develop an invaluable business skill. Whatever size or type of obstacle you encounter running your salon, try to not only to make the most of it, but to actively seek out the opportunities it brings.

An entrepreneur is an individual, who runs a small business and assumes all the risk and reward of a given business venture, idea or product/service for sale. The entrepreneur is commonly seen as a business leader and innovator of new ideas and business processes. Entrepreneurs play a key role in any economy. You have chosen to be a salon owner/manager – welcome to the bumpy road of entrepreneurship! From time to time, you will encounter setbacks, defeats and failures. Some of these might seem fatal, but they are not. As entrepreneurs, there is no such thing as failure. You have to keep going, stay strong and even cheerful when the going gets tough – use tough times to become the master of the comeback!

Finally, remember your long-term picture. All business is cyclical – a short-term downturn will be followed by the return of better times.