Salon Spa Business

APAN article Sept/Oct 2009

APAN article Sept/Oct 2009

By Caroline Nelson

Your own salon - Getting it right in the beginning

The dream of almost every graduating aesthetician is to one day open their own salon. If after working in the industry for several years and gaining valuable experience the next logical step for you is to start your own salon. Or if you are new to salon ownership then this article may provide the information you need. Because getting it right in the beginning will save you money headaches and possibly the future heartache of business failure.

But before we go any further lets see if you have the qualities and commitment necessary for operating a successful aesthetic business. Remember just because you are an excellent aesthetician does not necessarily mean you have the ability to be an excellent business manager. While it is essential that you have a passion for aesthetics and that you envision your new business being committed to providing customers with a high quality service, it’s not all that you require. As a business owner you will also be required to establish staffing procedures and policies, create marketing opportunities, supervise day to day operations, monitor the finances, and attend to all your legal business responsibilities. So owning your own business is not a piece of cake. It is in fact hard work so before you go ahead make sure you are prepared for the long haul because a successful business is not made overnight.

Having said all that, there are also unlimited opportunities to make money and a stable financial future for your self and your family when you go into business. How successful the business will be and just how much money you make largely depends on the initial planning and the amount of time and effort you put into your enterprise. So don’t be fooled that it will be easy to succeed because the beauty business is a very competitive one.

And those who do not have a good business plan and the correct strategies in place, along with a strong desire to be successful will often fail or at best have a business that just pays its way. And operating a business that just pays its way and limps along from one week to the next is unfortunately where many salon owners often find themselves. In many case this could have been avoid by good planning and realizing that one person can not have all the answers knowledge or expertise. By seeking the help support and advice of other business professionals such as a lawyer; accountant and beauty industry specific business coach these businesses could have grown and prospered.

As one of the leading industry specific business coaches in Australia I am often called in by a stressed business owner when the business is starting to fail. And while I can generally turn the business around and into profit I would have loved the opportunity to be in at the commencement so that many of the pitfalls and stress could have been avoided. And also many thousands of dollars saved. In this article I will endeavour to offer the advice that could save you the stress of a failed business. But for a more in depth support please contact me - details at the end of the article.

The Business Plan – if you plan to succeed

Firstly you will need to create a Business Plan. A well-prepared business plan is essential throughout the life of your business, not just before you start. You will need it later on to guide your focus, to prepare for expanding the business or to help implement new directions, technologies or products. Before you start your business, a business plan will ensure that the business is feasible and that there is a well laid out blueprint for action. The business plan will cover critical business decisions made at the start, for example organizational structure, partners, initial debt, etc. It will be geared to the initial funding or capital requirements from a bank or investor.

If you require outside funding from banks etc the business plan will need to very in-depth and it is suggested that you get assistance from your accountant. you wish to set up shop in a shopping centre you will often find that they will require you to present your Business Plan so they can see if your business will be viable and can succeed through the term of the lease. Also once you are in the business, a business plan helps you track how you’re going. Business planning is an ongoing business activity – you should regularly review and revise the plan throughout the life of your business. Part of your business plan is the marketing plan.

The Marketing plan

This is a gutsy part of the business plan covering marketing and promotions, selling strategies, pricing and results. The ‘link’ between your marketing plan and the resulting business plan is vital. Marketing attracts and retains the customers and ultimately ‘drives’ the performance of the business.

You can use the ‘five Ps of marketing’ as a structure to discuss your marketing plans:

  • the right Product (services and retail)
  • the right Price
  • the right Place (location)
  • the right People (staff, business experts and customers)
  • the right Promotional strategy

Marketing strategies

Your marketing strategy involves selecting a target market, developing an appropriate mix for each and allocating the resources necessary to achieve its goals. It is important to understand that the practicality of your business plan is determined to a large degree by how realistic the sales forecast and the supporting marketing strategy are.

Four variables shape your marketing strategies for meeting the customer needs:

  • product features
  • quality of product
  • level of service to the customer
  • price – and this must be profitable to the business

You will need to decide the Branding of your business – how do you want your business projected to the general public. How you position your Brand will influence the services you hope to provide and this in turn will dictate the type of equipment or products stocked. A cautionary note here – I often get called into help a failing business that has not successfully Branded and their potential customers are receiving mixed messages. Not good for business. An example of this would be a salon that projects itself as very clinical offering high tech services but stocks a skin care range that can not support the services. This salon would have been better stocked with cosmeceuticals. Alternatively a salon that concentrates on delivering the more traditional pampering services might be best to stock an aromatherapy or organic product line. The services and products you stock must also be suited to the demographics of the trade area.

Choosing the right location to start your new salon can also be a big determining factor to its success. The major points to consider are first what particular area or suburb do you want to locate and are there any specific site within that area that would suit. Then ask yourself is the population base large enough to support your business? Are the demographics compatible with the market you wish to attract? What is the competition like in the area? Is the available site the right size for your business – large enough for growth but not too large that you are paying an unnecessarily high rent.

The physical layout of the business is also extremely important and must be practical but aesthetically pleasing. When choosing a site pay particular attention to the shape of the premises because unusual shaped premises can be harder and more costly to fit out. In addition they often have hard to use areas and thus wasted space. And where are the plumbing and electrical outlets situated? By keeping all plumbing within a certain area you will save valuable dollars. There are many savings to be made in the fit out so make sure your draftsperson and builder are very aware of your budget. The amount of money to set up a salon will depend on the quality of salon, the fixtures and fittings you would like to project this quality, the equipment you need and your stock inventory.

The amount of money your business will need to generate to break even and then to make a profit will largely depending on your variable expenses for example wages, supplies, cost of goods and your fixed expanses like rent, utilities, insurance etc. You will need to know how many services and/or retail sales you need and if they are achievable. If it doesn’t stack up than you will have to decide if the idea of opening your own salon is feasible, or could you adjust your plans and make it more feasible. And any decision you make must be based on the goals you have for your intended business.

There are also numerous operational issues you will need to decide on. For instance are you going to employ people and if so will they be employed as casual, part-time or full time employees. You may even decide on contract staff. What are the qualifications and qualities you desire of employees? And will you be offering a good staff training program and introducing an effective systems of incentives so you can recruit and retain valuable staff?

Once you have a team of employees you will need to furnish them with the tools to perform at the high standard you desire your customers to receive. This will require you to provide them with all the necessary equipment and products to successful perform the services. It also means that you need to provide them with a formal salon staff policies and procedures manual so they are able to deliver a high standard each and every time a customer receives a service in your salon. Your salon staff policies and procedure manual is the “Blueprint” necessary to enable your team to provide a consistent level of service that will lift it above the competition.

Quality Customer Service is essential through the life of your business but never more so than in the early establishing of your business. It is important that both you and your staff go the extra mile and happily meet the customer’s needs wants and desires in their aesthetic services and home care requirements. If this is done you will be a long way towards establishing a strong and loyal customer base.

If you decide after taking everything into consideration that you have the necessary passion, drive, commitment and the start-up money then I would suggest that you may be an ideal candidate for operating your own salon. But one final word before you start looking for the perfect location go an do a business management course at your local TAFE or through your states Small Business Resource Centre who provide numerous informative seminars and workshops. Read everything you can and consider employing a industry specific business coach to guide you through the mine field of starting up in what can only be described as a very competitive industry.

In the next issue I will be discussing Savvy Marketing to build your Beauty Business.

© Copyright Caroline Nelson 2009

 

Caroline Nelson is a beauty industry specific business coach and author of the Ignite Your Beauty Business For $uccess- Salon, Staff Policies Procedures & Systems manual.

To learn more about her step by-step program for salon spa success, and to sign up for her FREE e-Book "3 Top Salon Spa Money Making Secrets", visit:
www.salonspabusiness.com