Welcome to the new year!
The older I get, the more New Year’s Day reminds me of the movie Groundhog Day; I can’t believe it’s here again, already! The fact is, the more quickly the years tick by, the more urgency you may have as a business owner to avoid procrastinating in regards to your spa business.
New Year’s resolutions have actually been around since the ancient Babylonians marked the new year as a time to repay their debts and return borrowed objects, 4000 years ago. You know that list of changes you’d like to make, or new approaches you’ve been meaning to try? The time is now, no need to wait until another year, or two, or five, goes by. Select one activity from each of these four areas, and get to work!
Those of you who know me have heard about this topic before; labor is your single biggest expense, and too many spas are operating with outdated compensation plans that do nothing to drive positive or revenue-building behaviors on the part of your technicians. Make sure that your spa is operating with a compensation plan that lays out a career path that benefits both the technicians AND the business. If it’s not, do something about it now!
Since products are a commodity in the spa, they are often neglected when it comes to cost controls. Ensure that you have a solid system for ordering, receiving, and storing your inventory. When products need replenishing, whether in the treatment cabin or on a retail shelf, ensure that your system allows product usage to be tracked, for both professional and retail supplies. Service protocols should include detailed recommendations on product usage. It is not that you don’t trust your staff, but if you don’t have controls in place, they will, at least subconsciously, believe that this area of the business is unimportant to you. Untold dollars are being wasted along with creams and oils.
Even when you keep your eye on retail performance on a weekly basis, it can easily slip. Pay attention to retailing basics, and even just following the 80/20 rule can improve your financial results. Run a report on your retail sales for the previous year, identifying your lowest performers, either by dollar volume or units. Discontinue sales of those products, and take the cash you would have spent stocking them and invest it in your top 20% movers; at least the business will see higher turnover in retail, if not in retail margins.
Full Price Sales:
Social media has become the go-to marketing channel for many small businesses, and one thing you can always have more of is clients. However, many spas are using social media to promote sales and appointment gaps, and often at a discount. There is always the argument that you’d rather have your therapists be busy with discounted guests than none at all, but over the long run, that continued practice trains clients to wait for the sale, and they become disinclined to pay your full prices, therefore eroding your already thin margins. Take a good hard look at your pricing and margins, and make whatever adjustments are needed to ensure that more clients are paying your list prices.
No matter how you measure the success of your business, the economic environment today ensures that success doesn’t “just happen,” it’s the result of focused leadership and a dedicated team. Everyone wants their business to do better each year, but “better” is not a real objective.