I read a simply horrifying statistic the other day…
… that 46% of salons make ZERO profit.
None at all.
Jeez.
They aren’t businesses, they are very expensive (and stressful) hobbies at best… or even charities.
But I also know that for the most part this isn’t because salon owners are bad at business… and it’s certainly got nothing to do with their work ethics either.
So, what’s the problem then?
For the most part I believe it’s because those salon owners are doing the work which the business should be doing for them.
Or, to put that a slightly different way… they are working on the wrong things.
Most salon owners believe that increased profits comes from;
→ More clients
→ More hours
→ More effort
And I can understand that logic, I really can.
So when things are a bit tight – or if they are always tight – then they jump in and attempt to do more of one of those things.
They jump back onto the salon floor as it’s the only thing they know how to do and feel as though that’ll be where they can help the most… especially as many believe themselves to be the main revenue generator.
However it’s actually the best way to CAP income.
Why?
Because when the salon owner is the main income earner then they become the bottleneck in the business and the the business has a ceiling to what it can earn.
After all, there is a limit to the physical number of hours anyone can work – even if many salon owners I know seem to want to push up against that as much as possible!
No matter your skill level, there is only so much time for money that you can trade.
The owner is paid last, after rent, tax, stock, staff and everything else… if there’s anything left (which in 46% of salons there isn’t, if that statistic is to be believed).
So, in the interest of adding some real value here, what’s the solution?
Well in my experience of working with salon owners who are profitable – and in our own experience as salon owners – it’s actually down to a change of role.
It’s more about stopping being the therapist or the stylist and being more of a CEO figure – a true owner – and a leader.
→ That means removing yourself entirely from low-value work…
→ That means crafting time for decision making and strategy rather than tasks and fire-fighting…
→ It means a true business focus on what actually makes the most profit and doing more of that and less of everything else…
Rather than ask the default question of “how can I do more?” a better question might be “what should no longer need me?”
Hollie always quips that “Richard doesn’t fly the planes” referring to the role of Sir Richard Branson in the Virgin Group.
You most likely should not be doing it all – or attempting to – in your business either. Even if you’re a solopreneur and employ nobody.
I know, I know.
This might fly in the face of what you’ve been taught before.
Perhaps even in the face of logic.
But if want to make a true success of your business – and take it to that next level – then perhaps it’s time to play the game differently.
