Welcome to the FOURTH edition of THREESIXFIVE information blog.Thanks to those that have already asked to be recipients of our business blogs. If you find the articles interesting and even helpful in the day to day understanding of your business, please feel free to share our contact details with anyone you know might benefit from the service we offer.
Buying and Selling a Salon
Stress and trauma can be associated to almost everything that happens to us. Changing jobs, moving homes, marriages and divorces etc, the list is endless. For many reasons buying a salon or starting a new salon, or selling your existing salon rate highly in the stress department.
Starting a new business is always a gamble and the more ‘due diligence ‘ (research) you do the less likely you are to fail.
When you start a salon, you are taking on a liability to recover your initial start-up costs, and then, turning your investment into an asset.
This ideology forces you to work on the Asset Value of your business. When you first open the Asset Value is very low due to the cost of setting up your new business. However, over time, as you recruit and develop your team, build your clientele and establish your image and reputation, the value of your business continues to grow. To a large degree you control this.
Location - Traditional thinkers believe location is number one! While for ‘start-up’ business this is true, high rentals become an obstacle to profitability and high footfall is not always guaranteed. Once you have achieved a certain growth you should see yourself as a destination business.
The Team - Build a strong team, sounds obvious, however high staff turnover is the greatest challenge to sustainable growth. You don’t just employ staff, you recruit the best candidate and invest in them. Normally called a ‘skills development programme’ that incorporates technical skills, mind skills (attitude) as well as social skills (hospitality). Staff are less likely to leave a job where they believe they are growing.
Understand your clients - Forever my favourite. Clients go where they’re invited, stay where they’re valued and grow where they’re pampered (educated). YOU CANNOT ACHIEVE THIS UNLESS YOU ARE WORKING WITH A C.R.M.
Promotion - Strangely enough this does not include discounts and special offers that only attract bargain hunters. It is much more about energy, enthusiasm, education, communication and showing how much you care. ‘Clients don’t always care about what you know, until they know how much you care’.
Protect the Profit Line - Turnover is a direct reflection of your day to day business AND it is essential to set turnover targets for both the salon as well each staff member. The true value of your business is how well you control the overheads and running costs - that can only be achieved through DISCIPLINE.
Over the years THREESIXFIVE has been able to assist many clients in the process of either buying into or selling their existing business. We believe ‘everything is negotiable’
INTERESTED IN KNOWING MORE?
CONTACT: TERRY - 083 650 0954 - TERVAL@IAFRICA.COM
Communication is as important to your business as oil is to your car!
Communication is, by definition, as well as the role it plays “the sending and receiving of ideas, objectives, and strategies between the people who are ‘stakeholders’ in your success”.
IN FACT COMMUNICATION IS ONE OF THE BUILDING BLOCK OF SUCCESS!
I think one of the reasons is that people ASSUME the other party knows what they are referring to. For example, when a clients requests just the ends be cut, the stylist could cut right up to the shortest growth, as opposed to JUST THE ENDS. To avoid this problem SHOW the client how much you intend cutting off.
Another problem is that people THINK in images - we just use WORDS to describe the picture you hope the other person will see. That probably explains when the other person is confused the speaker comments ‘you just don’t get the picture’. To avoid this the communicator needs to provide the other person with the stages of the communication as explained in the graphic below. If you think this is too much information, at least cover:-
WHAT NEEDS TO BE DONE
WHY DOING IT IS IMPORTANT &
HOW ARE WE GOING TO BENEFIT FROM ITS DOING
Armed with the above the person will understand (get the picture).
If, under the HOW you are able to suggest the first step, you will be surprised by how much gets done as well as role COMMUNICATION plays.
EVERY DAY I START WITH TWO POSITIVE THOUGHTS:
I WILL FIND NEW OPPORTUNIES TO GROW MYSELF AND MY BUSINESS
PEOPLE WILL DRIVE LIKE IDIOTS ON THE ROAD
I am rarely disappointed! - Terry Miles
GROWING YOUR BUSINESS
In what way are Farmers similar to hair and beauty salons?
Straight from the MIND POWER book is the concept of seeding.
Similar to a farmer wanting to grow maize, you first have to plant maize seeds. Or tomatoes, or potatoes... or HOME CARE (Retail sales).
Keep your client’s mind open to the importance of a home-care regimen (preparing the soil)
Plant solutions in your clients’ minds to their problems, needs and desires (seeding)
Remind your clients everytime they come in with their problem hair (watering the seeds)
Understand that TIMING will take care of the rest (just don’t forget the watering)
What, Why & How - Price Increases
What happens when rent goes up, stock costs go up and the price of pretty much everything else goes up — but you don’t increase your prices . None of us like to hear that prices are increasing unfortunately, today, they are an everyday reality.
AND very often the difference between survival and closure.
The question is ‘how do you implement a price increase in your business without losing clients’?
Start by using the term ‘price adjustment’.
Secondly separate increases in retail prices from an adjustment of your services prices.
When suppliers increase their prices, you need to amend the cost price on your pricelist immediately. You also need to re- price your retail products to the new RSP. This is normally in the first three months of the year.
Should you advise clients of a pending price increase?
Retail - Not for retail. After all consumers are never advised that prices of their favourite product are going up. If you have clients that are big users of certain brands it would be seen as a courtesy and probably much appreciated. Other than that there is no advantage in announcing changes in the price of retail.
Services on the other hand are a completely different story. What you charge is a calculation to cover your time, overheads and, of course, what you think you are worth (you also need to earn a living). I would recommend adjusting your prices in September for the following reasons: It’s a fairly long time since you increased the price of retail - a decision over which you had absolutely no control; and most people have gone through cost-cutting in the first half of the year.
Motivating your Price Adjustment
Clients are still sensitive to price increases however, if they understand that paying a little more to help you stay in business I think they would rather that, than having to find a new service provider.
This is not so much a salary increase for you as opposed to you making the right business decision to protect the service you provide for them.
No matter what you charge, just make sure you’re worth it!
Send all the above info to info@mysalonsoftware.co.za