They don’t teach good money sense in school. We know how to count our change, but do we know what to do with it?
Everyone makes mistakes in business, but money mistakes can be catastrophic. Here are four money mistakes that beauty salon owners have made before, and how you can avoid them.
Pricing Salon’s Services Incorrectly
Making mistakes in pricing your own goods or services is common across many businesses, especially start-ups. Initial prices are set up to a level that the owner is comfortable with, or thinks that they are worth. It’s probably one of the most difficult things to do once you’ve set up your beauty salon. If you set your prices too high, potential new customers may be put off; set them too low, and you won’t be able to pay the bills at the end of the month.
Make sure you do your initial marketing research. What are your competitors charging? And what exactly are they offering in return for this price? Are they going above and beyond with their customer service? Clients may not be as price-sensitive as you fear, especially if you’re giving them a great customer experience. So it may even be worth setting your prices just a bit higher than your competitors to start with and see what happens. If clients keep returning, then that’s great. But if the price is putting them off, then you have some leeway to work with. Lowering your prices is always better received than raising them.
Also, beware of discounts. If you’re routinely offering deep discounts on your hair salon’s services – perhaps for children or students – then these are costing you time and money that you could be using/earning elsewhere. If you do make a small profit from these discounts, then perhaps offer them only on your typically slower days instead. That way your high demand time is available for clients paying full price.
Not Marketing Your Beauty Salon
It’s tempting to think inwardly about your own salon and get carried away with the décor and equipment. But even now, as we approach 2016, there are still a large amount of hair and beauty businesses that don’t even have a website. No matter how much effort you’ve put into making your salon look as attractive as possible, if you no longer have the funds to promote it, then not many people are going to even be aware that your salon exists.
A website and maybe even some digital marketing campaigns will help potential customers find you and see the services that you offer. Also, running social media campaigns for your beauty salon can help build up a strong online presence, showcasing your services through pictures and video, as well as engaging with both your current and prospective audiences. A number of salons are now getting involved with mobile apps, attracting past customers to return with push notifications and tailored offers. Get your marketing budget right and you’ll always have people in your salon.
Newspaper Advertising is So 20th Century!
It’s time to face up to reality, in terms of a return on investment, local newspaper advertising isn’t a smart option on a small budget. First of all, the amount of people reading the local papers is depleting, and then these people are ten times more likely to read the articles themselves than the adverts. Not only are these adverts reaching a very broad audience but there’s no way of measuring how many of those people are actually seeing your advert.
The best way that you can get some positive coverage from your local paper is to contact them with an actual story. Have you recently won an award, been visited by an important figure, or held a charity event that will attract the interest of readers? Be wary of the canny advertising department of the local press who may try and turn your story into an advert, but keep convincing them that you’ve got a story on your hands and they might crack.
Giving Away Services to Customers Willing to Pay Full Price
A number of salons go in for the type of loyalty cards that coffee shops promote – “get four manicures and get the fifth for free!” But these are customers who have no problem coming to your salon to get manicures, surely they’ll continue to have no problem paying for a fifth manicure after the fourth. This is simply discounting a service that the client is willing to pay full price for anyway.
The sort of loyalty schemes that salons should offer are points based and provide a reward of a new product or service that is one they’ve never had before. Not only does this mean you’re not giving them something for free that they’re happy to pay for, but you’re exposing them to another product or service that you offer. In the long run, this may lead them to spend more money on the new product or service at your salon.
Even if you’re already doing a good job in these four areas, you may be able to enhance your profitability by making small improvements to your beauty salon’s current procedures. If you’re not doing these things, we at Boost Capital can help your beauty salon on your way to start implementing them. You’ll be amazed at the results!
Image courtesy of marin / FreeDigitalPhotos.net