How is your salon standing financially? Are you reaching your KPIs (Key Performance Indicators), used to evaluate success at reaching goals? Which services are bringing you the most profit? Which ones are not selling too well? Being familiar with this information is essential in order for you to operate your salon effectively. But does such data really constitute for whether or not your business prospers or fails? Here’s why generating reports and analysing them can spell life or death for your hair or beauty business.
Your business is floating adrift and you can only guesstimate where it’s going to end up - and guesstimating can lead your salon to failure. If you don’t know how your salon is functioning long term, it’s virtually impossible to predict the outcome of any marketing campaigns and which services offered in a salon are the most popular. You might feel as though last week your spa treatments were selling like crazy, so you invest in marketing activities based on a hunch, which eventually yield no significant effects. Without reports, everything you do is hit or miss.
You don’t have to have an in-depth understanding of reporting and analytics for salons - basic knowledge will suffice. All you have to know is how to read a profit and loss report and be able to open up a salon expense spreadsheet in order to record sales, profit earned and services sold. However, we need to be realistic here. Collecting this data by hand requires you jot everything down after every appointment, which more than likely isn’t going to happen, especially if you’re busy and have loads of tasks at hand.
To automate this process, you ought to try Booksy salon software. Every sale and finalised appointment is processed within the system; this collected data is used for generating financial, staff commissions and activity, service popularity, gift card sales, salon inventory list and many other reports. Additionally, you can generate reports for select periods, such as the current week, month, year or a custom time - which is useful for comparing busy and slow periods and monitoring any significant changes that can be affected by outside factors, such as COVID-19. Now, to get to the juicy part - how this data can benefit you?
Managing expenses and creating separate budgets for marketing, stocktaking and developmental purposes (the introduction of new treatments, products, staff and renovations) is second nature for the hardened salon owner. But by being familiar with your financial situation, you’re able to better allocate your budget. A slow season brings you less profit, which means you’re on a tighter budget and you should focus on distributing finances to more vital parts of the business, like stock and marketing. Less-important expenditures, such as purchasing required resources for a new treatment you’re looking to introduce can wait for better times.
Staying updated on your reports is also essential in order to make more profit. So, does that mean knowing how much profit you make in a given timeframe can help you make more profit? Not exactly. But knowing what brings you profit can. Here’s an example: your highlights made up 23% of all earned profit this month, whereas your sugar waxing treatment only 2%. Using this data, you can infer that there’s a better chance that you’ll make more profit from treatments and products related to highlights and hair, rather than sugar waxing.
Now, here’s a money-making strategy you just have to try. Upon generating a service popularity report, check which treatments are selling the best. In order to bolster your sales even more, run a Flash Sale and offer your clients a discount. The system will let you specify your sale period but also when bookings need to occur in order for the discount to apply. This way you can boost your profit in slower periods of the year.
Unfortunately, when looking to expand their menus, many hair and beauty specialists go with either their gut feeling or stick to what they’re qualified to offer without considering taking additional courses for being able to provide more in-demand treatment options. Just because you enjoy providing holistic spa treatments doesn’t mean that they’ll sell. Before deciding on what services you should offer in your salon, check your reports to see which treatment categories sell the best and make sure to do some sleuthing. Create a poll, asking clients what services they’d like you to provide, and don’t forget to do local market research to see what your competition has to offer and what are some great salon trends you ought to follow. Using all of this information, you’ll know exactly what services can make you more profit, and which ones to stay clear of.
Additionally, introducing new treatment options should include a testing period of about a few months in order to collect a significant amount of data. It’s also important to note that certain services, such as microdermabrasions and facial laser treatments are more popular during autumn and winter, as there is far less harmful UV radiation, which can cause injury to recently treated areas, whereas treatments such as sugar waxing are more popular during summer, as people tend to cover-up less.
Whether you’re looking to expand your menu, make more profit, better manage your business or are simply curious to find out where your salon is heading, a reliable reporting system is essential to achieve this. Booksy software is used by hair and beauty specialists not only to generate reports, but also to help manage staff, keep track of bookings, secure sensitive information and much more. Essentially, Booksy is the go-to solution for effective and efficient salon management. Sign up for your free account today and book a live tour with one of our salon experts. No credit card required, free support forever.
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