The Salon Owner’s Guide to Smarter Metrics

Turnover might look sexy on paper, but if it's the only metric you're tracking, you are flying in the dark. Let this episode shine the light on the other areas of your business. Hello, hello, hello my salon friends. How on earth are you? Achingly well, I hope. As we plunge towards the end of March, the end of Q1, how was it for you? Bit of a bumpy ride, but heck, aren't they all these days, my darling? I've heard some really good strong results coming out of March though. Lots of my coaching clients doing some really good money, making up for a bit of a shortfall either in January or February. Perhaps this is the pattern in your business. How's it been for you though? I want to hear from you. Reach out and let me know. Phil at buildyoursalon.com. You know I love hearing from you anyway. And as we plunge towards Q2, how do we know whether we're doing a good job at all? How do we know whether we're getting to move in the right direction towards our goals and dreams, our aspirations for our business? Well, it's through measuring stuff. And lots and lots of my salon owner friends out there are only measuring really one thing, and that's turnover, which will get you so far. But it's not the whole story. In the same way as just takings is not enough of a goal for our team members, we expect a more rounded picture of how they're doing so that we can set targets and set goals in lots of different areas. The other problem, of course, with turnover is it's a lag indicator. It's showing how well the business did over a previous period of time. It's not really giving us an indication of whether we're going to be doing well in the future, whether we're sowing the seeds for our future success. So when it comes to team members, I've always encouraged you, and there are plenty of episodes, my darling, of the Build Your Salon podcast talking about performance management. But I've always encouraged you to look at not only takings, but we also look at breaking that down into service and retail. I've also encouraged you to look at customer retention or rebooking, which is a lead indicator. It's showing us how well we might expect to do in the future. And we've also looked at utilisation. And lots of you out there have taken that on board and you're making your performance management much more effective as a result, which brings warmth to this old homosexual's heart, my darlings. It really does warm me cockles when I see you doing a great job on performance management. But of course, there's a layer across that. There's a layer above that, which is how well the business is doing.

And we need a different set of measures to the ones that we're giving to our team members, firstly in finance, but also in other areas of the business as well. So what I'm asking you to do as we get towards Q2, I'm asking you to come up with a bit of a score sheet where we can start measuring some metrics across all areas of our business. But where might those metrics come from? What might we be measuring? What would be useful in our business? Well, that's going to change and adapt depending on your goals, the stage of business that you're at, the current level of performance that you're enjoying or enduring and where we want to go to next. But there's going to be some financial goals in there. So what I've done is put myself in the position where I'm getting into a rhythm with this now. And this is an area, even in my own business, that I've been neglecting. And trust me, as much as I'm teaching and helping you guys, I'm learning at the same time. And I've started putting together a bit of a score sheet. And you may know that I have my finance Friday. So every Friday I sit down, I look at what the money that I've taken across the past week. And that's when I reallocate things according to the Profit First methodology and put things in different spaces or pots and assign money to different budgets in my business. So to bookend my week, as well as Finance Friday, I now have Metrics Monday, which is when I sit down and look at the other areas of the business beyond finance where I want to see improvements. So money is obviously a big part of every business. But takings, well, that's not enough in our salon businesses. I want to know whether not only I'm starting to grow the amount of money that's going into the till, but actually whether I'm starting to generate more profit. Because it's relatively easy to grow turnover. And the old adage that turnover is vanity and profit is sanity holds true here. But we want to see growth in our profits as well. How do I mean that we could grow turnover unprofitably? Well, we could take out a load of very expensive adverts that get lots and lots of bums on seats. Or we could run some massive marketing campaigns with very much reduced margins through huge discounts. And you know my feelings about discounting, darlings. But we can get lots of people through the door, get us nice and busy, get those columns really full. But profitability-wise, we're not doing very well. So we need to be measuring the profit that's being generated in the business, not just the turnover. 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. We might also want to set some targets around the money that's available in reserves. So I have a target set and a metric that I measure for success in my business is the amount of money I have put aside, and I call it my war chest. That's because I'm a COVID business survivor, my darlings, and I know that one day it may not have a COVID flavour, but one day there will be something that comes along, throws us a curveball, and we're going to have to have a buffer. We're going to have to have a certain amount of money put to one side to take us through the dark times. And there will be dark times coming again, probably from something that we haven't even imagined yet. So I want that war chest growing. So that's one of the metrics in my business. Having said all of that, what are the metrics that you could be looking at as far as money is concerned? And perhaps you've got some metrics around the amount of debt that you're repaying, or perhaps we've got some payment terms that need looking at. The amount of money that people owe us might be a very valid metric as well. So you're going to look at your goals, look at the state of the business at the moment, and start to build up a number of money metrics for your business. The second area that I have is around sales and marketing.

So I'm looking at things like the number of Instagram posts that I've put out there in a week, or I'm putting a metric in there for the amount of engagement that I'm getting. It's not enough just to put content out there. We want people engaging with our content. The number of emails that I'm sending, the email open rate. So all of these marketing metrics, because we're not just looking at the money that's coming through the till then. The marketing should be sowing the seeds for your future success. So if we're doing well on the marketing, the chances are good that we're going to start to see some longer term improvements, some stabilisation in the business or future growth as well. But also in that sales and marketing, we could be putting things like customer satisfaction. Perhaps you've got some feedback. Lots of my clients, by the way, one very recently puts a customer survey out there. And we could be setting marketing, we could be setting rather metrics around the feedback that we're getting from our customers, the number of testimonials that we're getting, the number of reviews that we're getting on Google. All of these things need measuring for improvement, because it also empowers us, of course, not to just see improvement in the takings. Sometimes it's really hard to see improvement in the business if all we're looking at is turnover. But we could be allocating our resources, allocating our energy, allocating our efforts in other areas of the business as well. And then the third broad area that I have for my metrics are my goals and my business progress. So growth and goals, I've called that. And that's where my 12-month goals are brought in, turned into much smaller chunks that I can be working on. And I want to see progress towards those 12-month goals week in and week out. And if I'm not seeing any progress at all towards those goals, well, it's time that Uncle Phil sat down, had a strong, hard, stern word with himself, and a very gentle kick up the arse to get some progress made in the business. There's no point in just putting goals out there and letting them sit there, not looked at for six months or 12 months at a time. So I want you to start building up a set of metrics that actually measure whether you're doing a good job in your business. Now, what I don't want you to do is come up with 15 to 20 different metrics and start measuring them all at once. You won't keep that up. You won't turn that into a habit. That won't be useful to you in the longer term. So start with just one area or one or two metrics across a couple of areas. Measure those. Get into the rhythm of it. Make sure it's information that you can access really easily. So find the reports on your salon software

or find the reports on your email software or your social media platforms that can start to give you those bits of information really easily. Then when we're in a habit of your version of Metrics Monday, well, then we can start bringing in extra measures as well. And of course, because everything in my 2025 has an AI flavour, of course, I'm using AI to help measure. Not necessarily help measure, but help me track the progress towards those metrics. So every Monday, I'm opening up my ChatGPT window. I'm reporting back. And ChatGPT is starting to measure the trends, measure my progress and celebrate with me when I do a good job. And then it helps me put together a little report card, which is a snapshot of how well my business is doing. So what do you think? What have I missed? How can you be building your own little scorecard for your business? What are you measuring that I might not have mentioned in this episode? Reach out and let me know. You know I love hearing from my salon owner friends and I don't have all the answers, but between us, maybe we do. I'd love to hear from you. My email address, scrolling at the bottom of the screen, phil at buildyoursalon.com. Also reach out if you'd like to share your salon success story. I'd love to be interviewing you on a future episode of the Build Your Salon podcast. Just seven short days until your uncle Phil's coming in your eyes and ears again with another dose of wise hour wisdom. And until then, take care.