Episode 66: Salon Business Plans Made Simple
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This is the 2nd part of a 5-part series with SalonScale. If you missed the SalonScale introduction episode, click here to listen! This series is filled with free coaching on pricing and so much magic!!
SalonScale is an app that will tell you the exact cost of hair color being poured for every bowl mixed so you can start pricing your services more accurately and feel confident knowing that everything leaving your color bar is being paid for.
In today’s episode, Elizabeth Faye sits down with Alicia Soulier, CEO of SalonScale! We met Alicia at our Portland Hair Love Radio Podcast Tour, and immediately clicked!
This episode is geared toward current or future salon owners! We are about to change your life! We talk all things parts + labor, and KPI’s! (If you missed our Parts + Labors episode, click here). Elizabeth and Alicia discuss what it takes to be a salon owner, how to keep your employees motivated, and how to service the most customers!
2:45 ALICIA’S EXPERIENCE IN OWNING A SALON
At the current time, there are level systems, team-based pay systems, senior systems, or the worst… go with the flow systems.. It’s very hard for salon owners to come up with efficient systems that keeps their employees, and clients happy, AND have their company still make money.
When it comes to pricing… Her goal… is make pricing as SIMPLE as possible.
By using the SalonScale app, you simplify your transactions, make more money, and spend more time with your family and friends and less time.
SalonScale is here to relieve you of your frustration and confusion, and make your business AMAZING!
6:30 TYPES OF MODELS
OLD MODEL- SENIOR/JUNIOR PRICING MODELS: The amount you charge is based off of the experience of your stylist. So your Time= Wage, not necessarily your performance. You can see the problems this arises.
THE PROBLEMS: “Junior” stylists don’t want to be called “intermediate”. It also takes a lot of time to get to the next level and so they are much more likely to go work somewhere else. It’s not up-to-date with how quick the industry and artists are growing. This is tricky for a salon owner because you need to be there for your team and help them grow. This means that you need to focus on the OPERATIONAL side.
As a salon owner, it is your job to make them feel valued, and important. Next, you need to spend some time away from the chair and on the operational side of things. if you can simplify your finances, and get the money then, then you can focus on your operations. If you obsess over your STAFF and understand their needs, then you can really see your salon grow and THRIVE.
THE SOLUTION- LEVEL SYSTEMS: You can do something such as levels 1-5. Unlike the other model, this is based on performance. Things such as education, booking ratios, performance, etc. Moving up levels would be an increase in wage or commission. It is like a mini-business plan for stylists. This is a great system because stylists are able to make a 5 year plan and look forward to getting better.
How to talk to your clients: First ask them what their budget is. From there.. you can recommend stylists that fit their “budget” instead of saying specific levels. This is great for salon owners, because then you can serve a bigger variety of customers, because you have different prices. Then your customers can go to someone cheaper or more expensive, on THEIR DECISION.
19:00 WHO SHOULD YOU HIRE FOR YOUR FRONT DESK PERSON?
Alicia recommends hiring someone that is part time at the desk and part time assisting. That way they understand both the front (The heart of the business= the customers needs, conflicts, and confrontations.) Then, when they are on the floor they understand the technique and the art!
20:00 WHO SHOULD BE THE SALON OWNER
Alicia recommends having someone just be a manager. They don’t necessarily have to be a stylist. Diversity is SO powerful. If you bring in someone with a financial / operational mind vs. creative mind (which most stylists are), it might feel off, but by adding that diversity you are going to grow SO much faster. This person can bring in a new perspective when it comes to how to make your business better.
So.. Where do you find this person?
They work at the doctors office, or other front desks, they are used to working with people and talking back and forth with other financial people. It could help to have someone that has a degree in business, and that is organized. That way they can focus on the logistics of your company and you can focus on the creative side.
22:00 HOW TO GAGE YOUR GROWTH
Only track things that GROW YOUR BUSINESS. it’s as easy as that!! When looking at your stylists look at things like:
- What is the percentage of your stylist being booked? This will tell you if they are helping to grow the business. EX: If they are booked 85% of the time, they are helping you grow your company!
Check this QUARTERLY
-Other things to look at: Culture, Education, Ability to work with, things that provide value.
Check this ANNUALLY
There is never a time too early to move someone up in the level system! Your job as a salon owner is to get people growing quick! If they surpass you.. YOU DID YOUR JOB!! Always remember.. give to others things you wished you had, so that they don’t have to go through those things you did! Be the mentor that really supports their growth.
Tip for keeping level 5 excited about growth:
- Talk with them!! See if they want to do a partnership, franchise, stock options, etc.
Don’t be afraid to give your equity away!! They helped you grow your business!
27:05 DO PARTS AND LABOR SUPPORT THE “LEVEL SYSTEM”
Alicia realized that the only problem to the “level system” was the pricing aspect. Let’s take a root touch up for example.. You will use different amounts of color depending on what your client’s base color is, or much hair they have.. So if you are charging one price for ALL clients you’ll be losing money on those clients that you are having to use more color on. So instead.. you would have a base price + whatever their hair color cost is.
Summary… You need systems and policies to keep everything in check, and then you need SalonScale to measure your color costs!!
We are so excited for you to starting changing your with with SalonScale.
Don’t forget to share with your friends. :) Click here to get your free scale!
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