From Panic to Profit: A Salon Owners Guide to Smart Savings

Let me guess. You've had notification from your bank that there's not enough money to cover your outgoings, and now you're frantically whizzing through your direct debits, trying to figure out if you can save a few quid on coffee. That's no way to run your business, my darlings. That's a cry for help. Let's see if we can make some savings that actually stick. Hello, hello, hello, my salon friend. Phil Jackson here, your queen of salons, coming in your eyes and ears again with another dose of Wise Owl Wisdom. How on earth are you? Achingly well, I hope. As we head into February, first episode of February, how was January for you? Interesting, I think, is the word that I would use. Lots of my salons reporting not a very busy day. January, but a good money January. Lots of people buying courses for lots of expensive treatments later in the year, but actually utilisation not being hugely high. Also, I'm being reported lots and lots of problems with people cancelling last minute rescheduling appointments. Of course, we're in that time of year when everyone's got flu. We've had norovirus tearing through the country all the way through January as well. And clients rescheduling because they are realising they haven't quite got the money. They thought they were going to have in January. And we need strategies in place to handle that, of course. So maybe this is our new pattern, though. Maybe that pattern for January is going to be good money, but not very high utilisation. Perhaps it's a good time to encourage your teams to be taking some time off. Maybe it's time to re-look at our marketing plans for Q1 and figure out whether we need to put a little bit more effort into our New Year's messaging. But how was it for you? Reach out and let me know. Phil at buildyoursalon.com. You know I love hearing from my salon owner friends anyway, and I love hearing what's going on in the industry, not just here in the UK, but around the world. And reach out to you do. Also reach out if you have any questions. I try and put on some Q&A sessions every now and again. They were supposed to be monthly, but my darlings, you're too slow sending me these questions through. So please reach out. Let me know what's going on with you. Let me know how I can best help you. And today we are returning to one of my favourite topics, which is, of course, money. And specifically, I want to talk about how we can save money because, let's face it, a penny saved is a penny earned, as Benjamin Franklin once said. And ultimately, let's bring things up to date a little bit. And if you're using the profit first ideology in your business, which is something that I highly recommend,

then you will have appreciated by now that every percentage point that we can save on your outgoings and your costs actually contributes another 1% to your profits. And ultimately, isn't that, my dears, why we're all in business in the first place is to make a profit, whether that profit is for you to spend on shiny things or whether it's for you to reinvest in your business. So cutting costs is a good thing to do. Now, before we jump in, though, I don't want you to obsess. I don't think it's great use of your time to spend hours and hours and hours trying to save a few pence here and there. Ultimately, your time has a value attached to it. And if we're only saving a few pence, I would argue it's not the best use of your time to be spending all that time trying to save a couple of quid. So ultimately, let's look for the big wins, the low hanging fruit in our businesses. And I want you to take a kind of systematic approach to that, because I alluded in my introduction to what most people do, which is they get some sort of notification saying there's not enough money to cover all their outgoings. And then they jump into the bank statement and try and figure out whether we can make a cheaper cup of coffee, whether we could maybe cancel our salon software subscriptions, whether we should be moving credit card providers to save a few quid here and there. And I don't want you to take that approach. I want something much more systematic, much more frequent as far as cutting costs is concerned. So what's a better way to do it? How can we go through our costs, save money, cut waste wherever possible and maximise our profits? Let me guess. Your appointment book is full, but your bank account isn't. How long are you going to let that go on for? Isn't it time that you got paid properly? My Get Paid Properly programme isn't just another course. It's your roadmap to boosting your profits, increasing your takings, finally getting rewarded for the hard work that you do. With nine straightforward modules, my foolproof pricing spreadsheet, and I'm even throwing in a one-to-one coaching call to answer any questions that you have about the training or anything else that's getting in the way of your incredible success. Head to getpaidproperly.com forward slash podcast and you can save £100 on your sign-up

and get that bonus coaching call with me. The programme is backed by my signature 90-day no quibble guarantee. Take the training, take the coaching call, and if you don't feel you know enough to confidently set your prices profitably for the future, I will coach you myself until you do. Head to getpaidproperly.com forward slash podcast, lock in that saving, and finally take strides in the direction of getting rewarded for your hard work. Well, the first piece of advice I have is to look for the big wins. So step one, and actually the number one action I want you to take from today, is to start categorising your spend. And lots of your bank accounts now will allow you to do this. So I bank with Monzo, not affiliated, don't get anything for recommending them, but they're a very useful online bank. But lots of them will allow you to categorise spend as it leaves your account. And I want you to go through and make sure everything has a category attached to it. And you'll see very, very quickly where the big spend is in your business. If you have premises, that will be one of the big spends. If you use products in your business, and who doesn't, that's going to be another one. And the third will be wages. And I would guess in most businesses, they're going to be the top three. So guess what? When we're looking for savings, when we're looking to make a big difference to your business, that's where we're going to start. Is there anywhere in your wage bill that can be cut? Now, I'm not talking about necessarily going through with a hatchet and sacking half of your team. But maybe we could start to reallocate our wage bill a bit more efficiently. Perhaps there are certain days and times that are predictably quiet, when we could look at cutting our wage bill back. Perhaps there are some support staff that aren't needed in our business anymore. Where could we be making savings in our wages? As far as product costs are concerned, of course, we're looking to minimise waste at every available opportunity. But could we be shopping around for a different supplier? Could we be maybe looking at white labelling some of our products to increase our profit margin and to cut costs in our everyday services? Where could we be saving money on our products? And the third is premises. Now, it might be that we can't actually save money on our rent, but perhaps we can. Perhaps there is an opportunity to renegotiate with our landlords. Perhaps there is an opportunity to save on some of our premises costs. And then once we've been through the big three, it's time to jump into everything else.

And that's going to be a lot easier if we've categorised our spend. So the way that I would approach cost cutting in a more systematic way would be to take a category at a time, perhaps spend a month looking at one particular category and set yourself a target on what you might be able to save. So, for example, the big one in my business tends to be software subscriptions. I'm a sucker for taking out a new bit of software. I'm a nerd. I'm a geek. I admit it. I love software. I love technology. I love AI, but my goodness, those subscriptions soon stack up. But by categorising my spend, I can set myself a target, perhaps every few months of going through and shaving 5% or 10% off those subscription costs. Now, on its own, that's not going to completely revolutionise my business. It's not going to change my financial fortunes in a heartbeat. But over time, these little incremental gains do stack up. Also, it gets you into the habit of going through your bank statement line by line and just noticing what's up for renewal, just noticing what you spend every month. Because a lot of these, because they tend to be quite small amounts, you know, $19 here and $29 there, they kind of slip through the net a little bit and sometimes we don't notice what we're spending. So have a look at your subscriptions. Figure out where you might be able to save some money. But go through category by category. Set yourself a target of shaving just 5% off. Now, sometimes you're going to smash that target really easily. Other times we're not going to hit that target at all. Maybe we've cut things back so far that actually there isn't anywhere else to save any money in that category. But at least we brought attention. At least we're sure that the money we're spending absolutely has to be spent and there's no waste in the business. A couple of areas where you may be tempted to save money, but I'm going to tell you to be a little bit more mindful about it are marketing and training. So it's very tempting to say, gosh, I'm spending a lot on marketing. Perhaps I can save my 5% or 10% here and there. The problem with marketing is it's not always immediately apparent the impact that it's having. So sometimes it can feel like there's money to be saved, but we don't really understand the impact that's going to have on the number of new clients that are coming through the doors immediately. Sometimes it takes a little while for those changes to filter through.

But ultimately, wherever we can, we want to be tracking our marketing efforts. So we want to make sure that the money we're spending on Facebook ads actually makes a difference. We want to make sure that we're monitoring the numbers. And in fact, if you remember last week's episode when I was talking to Phil Evans, we want to understand the numbers as far as our website's concerned so that we can understand the bits of our marketing that are actually making a difference for us. Then if there are areas where you think the marketing isn't actually money well spent, that's where we want to be cutting back. But don't just take 5% off everything. That's going to really hurt your new client numbers, your lead numbers, and ultimately the level of your success over time. And similarly, training. Lots of us have very big training bills every year because we're trying to keep our skills up to date, trying to make sure that we're offering the latest products and techniques to our customers. And it might feel that you can take a hatchet to your training bill and cut back. What I would do is start to measure the impact of your training. So, for example, let's say you have a need to send a team member on... Let's use a hair example. We use lots of beauty examples on the podcast, don't we? Let's say we've got a need to send one of your stylists on a colour correction course. What I would be doing before they go on the course is measuring their competence and confidence in that area of their skills. So that you might give them a little questionnaire saying, how confident and competent are you? Measure yourself on a scale of 1 to 10. Then I would want them to complete that questionnaire again after their training. And if I haven't seen a meaningful improvement in their competence and confidence, I'd be back on the phone with that training provider asking them for an additional day's training or a refund. And what you'll build up over time is a little catalogue of training that you know makes a difference in your business. So it's not that we're necessarily cutting back on our training, but we're cutting back on wasted money on our training, making sure that when we do spend on external training, that we're getting the best bang for our buck. Ultimately, cost cutting has to come hand in hand with budget setting. We want to know that we've got certain amounts of money allocated to all of these expenses, and I appreciate that's going to take some time to get in place. But once you've categorised your spend, the next stage has to be to start setting some limits. Now, it might be that we go over the limit, but what we need to do is just notice

whether there are inaccuracies or inefficiencies in our budget setting. So I'd like you to go through your areas of spend and start to allocate a certain amount of money or a certain percentage of turnover to each of those areas. A quick couple of traps that I see people fall into when they're budgeting, though. The first is I want you to be very, very careful around kidding yourself that bulk buying is doing you any favours. Yes, per unit, it might make sense for us to buy lots and lots of a product or lots and lots of some of the consumables into our business. But bear in mind, we're tying up a lot of money, potentially for a very long time. Some of those products are going to have expiry dates. Some of them just need storing, and that's going to have a cost attached to it as well. But bear in mind that that money that you've tied up in product is now no longer available, for example, for your training, for your marketing or for you to take out the business in other areas. So do beware where bulk buying is going to be tying up money, I would suggest, for more than a couple of months at a time. And the second area for caution, I think, is going for the cheapest option automatically. Let me give you an example. I have just literally in the last couple of months had one of my coaching clients that's gone from one particularly cheap salon software system to one that's going to cost them noticeably more. Now, why would you jump from one to another? Why would you suddenly increase the amount that you're spending on your IT and tech in your business? Well, it's because of the inefficiency that's built into that cheaper salon software. Yes, it might save you a little bit of money every month on your software budget, but if it's increasing the amount of time that it takes you to generate reports, if it's increasing the number of inefficiencies in that reporting process, If it's bringing inaccuracy into your financial control, it's better to spend a little bit more and make sure that we're getting the best solution possible. So don't just take a hatchet to some of these costs. Play it out in your mind. Make sure you're making the smartest decision, not necessarily the cheapest one. So they're my tips on running a tighter ship, a leaner business, and making sure that we're maximising the profits. But what have I missed? What are you doing in your business to make sure that you are making the most profit possible and enjoying your business and most of all getting paid properly? Reach out and let me know.

You know, I love hearing from you anyway. I'd also love to be interviewing you on a future episode of the Build Your Salon podcast. So reach out and let me know if you've got a story you'd like to share with my listeners. You don't have to be an award winner. You don't have to be the biggest business in the world. Actually, some of the most interesting stories come from smaller businesses that are just sharing what they might think of as quite tiny wins. I promise my audience will find something of value in your story. So reach out, phil at buildyoursalon.com. I'd love to be interviewing you on a future episode very, very soon. Just seven short days until I'm coming in your eyes and ears again with another dose of my wise owl wisdom. And until then, take care. I'll see you next time. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye.