I Spent £300 on a Billboard (Big Mistake)

I wasted 300 quid on a billboard once. It actually cost me £3,000. Not because the billboard was that expensive, but because of a piece of maths I wasn't doing at the time, and once I've shown it to you, you will never be able to unsee it. Hello, hello, hello, my salon friends. Phil Jackson here, your queen of salons, coming all over the internet with another dose of my Wise Owl Wisdom. How on earth are you? Achingly well, I hope, as we storm into June. I do like it when the first episode of the month lands on the first of the month, but we have a Monday-Friday rhythm, so frankly, darling, we take our chances. But this month, everything is going to work out wonderfully. And we are at the start of something this month. As we're heading into June, that means we're nearly at the end of Q2, nearly halfway through the year. So every Monday, I'm doing an episode on what I'm calling the 10-minute money fix. There are five fixes. We've got five Mondays in the month. Each one is a little bit of maths or a little reframe. Don't get scared. I know you don't like maths, darling. Or a little reframe that puts money back into your pocket. It's all about becoming a more profitable business. So, you know, I'm not asking you to overhaul your entire business. I'm not asking you to do any huge sweeping changes, just little money fixes. And this one is designed to change the way that you look at every pound that leaves your bank account. Here's the bit that you don't get told when you're studying to become a hairdresser or a beauty therapist. And that is that the cost of an expense is not what it says on your invoice. The real cost of an expense is what your business had to do to earn to pay for it. Let me explain. If your salon runs at a 10% profit margin, and for lots of salons and beauty rooms and aesthetic clinics, that's about right. It's on the low side, but let's deal with reality rather than pipe dreams. That means for every £100 of revenue coming in, £10 of that is profit. The other £90 goes on your rent, your wages, your products, your software, your stock, your tax, all of those wonderful things that we all resent paying month after month. So when you spend £300 on something, that £300 has to come from somewhere. And there's only one place it can come from, and that is your profit, which means your business had to generate £3,000 in revenue just to cover it.

That's a £300 expense, 10% profit margin. So we multiply by £10, £3,000 in sales that the business has to do just to pay for that one thing. So just sit with that for a second, because lots of you beautiful salon business owners look at a £200 invoice and think, well, that's £200. Or you invest in some training, which promises to pay for itself. You know, you pay £500 out for training, generate £500 on a new service and think it's been paid for. Or a new product line gets brought in, it's going to pay for itself in no time. It's just not true. And let me know, let me tell you why I know this. It's because a few years ago, somebody called me up about advertising on digital billboards that were going up all around the town. They were going to put them in the shopping centre, in the post office, so that people would look at them in the queue, in some of the shop windows. Bright and shiny, thousands of shoppers going past them every day, apparently, all for the princely sum of £300 a month. I was sold on the dream, brand awareness, your name in lights, people seeing me everywhere. So I said yes, of course I said yes. It felt like proper marketing and at £300, it didn't feel untenable, it didn't feel unaffordable. It felt like I was being finally a grown-up business owner, for whatever that means. And I would occasionally pass these screens and see our advert popping up there and get a little buzz to see my salon's name out and about across the town. £300, no-brainer. Except a few weeks in, I started to monitor whether we were actually getting clients from these screens. And I didn't just have to ask, I didn't just say, how did you hear about us? What I'd done is set up trackable marketing. So way back in the 1800s, darling, when Uncle Phil started his salon, everybody used to call up for appointments and I had something called tracking numbers. So they were telephone numbers that all routed through to reception, but they were all unique. So I knew that if somebody had seen a particular telephone number in an advert and called up, I knew they were calling up because they'd seen that advert. It made the marketing trackable. So I had one for all the flyers that we did. I had one any time we put an advert in the paper.

And I had one on these digital billboards. And nobody came as a result of those adverts. Nobody used that particular tracking number. They said that they'd researched us. They said they'd been recommended by a friend. They said they'd walk past the salon like the look of the place. Nobody mentioned these boards. And the longer that went on, the more I realized that that feeling of being in serious business was actually me being seriously, seriously stupid. Then I did the maths because £300 at a 10% profit margin, £3,000 in revenue the salon had to do every single month just to cover that one piece of marketing. £3,000 and not a single new appointment that I could trace back to it. And that's when it landed. For me, it wasn't a £300 mistake. It was a £3,000 hole in my profits. Now, of course, this isn't about digital billboards or marketing or deliciously tempting sales reps. This is about every single thing that you're spending your money on. That £200 a month software subscription, £2,000 worth of work. £350 on a training course, that's three and a half grand. £600 worth of products you over-ordered because the rep gave you an amazing deal. £6,000 of work. Every single pound needs to be multiplied. And this is why I see salon owners working flat out. Now, I don't like the idea that you are scrimping and saving and cutting costs to save every single penny. I think it's a miserable place to be in business when we're cutting corners and cutting costs again and again and again. But when you start understanding how much work you actually have to do to cover those costs, it's absolutely worth taking your bank statement out every now and again and figuring out where you're leaking money. It's not always because you're undercharging. Well, actually, you are often undercharging. But that's another episode. It's because you're leaking money on these things that quietly cost 10 times what the invoice says. And that's if you're on a 10% profit margin, which is pretty good these days. It's unfortunately way too low for most businesses. But if you're on a 5% profit margin, we're not multiplying by 10 anymore. We're multiplying by 20. So the fix isn't to stop spending. You've got to spend money to run a business. But the fix is to look at every expense through this lens before you say yes.

Is this thing going to bring back 10 times what it costs? Because that's the bar that's been set by your profit margin. Now, of course, if we can improve your profit margin, brilliant. We get to relax a little bit about these costs. But until then, my darlings, everything gets multiplied by 10. So here's what I want you to do today, genuinely today. I only want you to take a few minutes. I want you to open last month's bank statement or bring it up on your phone. Pick five expenses, multiply each one by 10, and then ask yourself honestly, hand on heart, was it worth it? Some of them will be rent, wages, your business coach, obviously. But I'll bet you'll find at least one, probably more, where the answer is no. And that's the one I want you to look at cancelling this week. That's the fix. That's the whole thing in less than 10 minutes. And that's the whole point of these money fixes. Each of them take less than 10 minutes. There are five of the money fixes available. And this one is the first. The other four are all a bit like this, a tiny bit of maths, but mainly a reframe that quietly helps you keep money in your business. If you want the full walkthrough, the real cost calculator and all five fixes, then you need to head over to 10minutemoneyfix.com. I'm going to put that link in the episode description as well. And the whole thing costs you nine quid. OK, that's all I'm asking for. Pays for itself before lunch, because there's no point in me asking you to keep more profit in your business and charging a huge amount for it. So it's 10minutemoneyfix.com. The link's in the show notes. And what I've done is put those fixes in as PDFs that you can download. They're also available as video episodes. Or if you want to take me for a walk with the dog or listen to me in the car, I've made them available as audio as well. So I've made it as accessible as properly as possible, my darlings. Friday's episode, we're going to change things up a little bit. I'm talking about what you do when you get a one star review and want to burn your salon down and hit somebody. We've all been there. That's just a few short days until I'm coming all over the Internet. And until then, take care.