Mistake #1: Searching the “Right” Location
You know what is a huge mistakes? It`s thinking a location is “right” just because other salons open in the same area.
This isn`t always the best pick.
It`s like betting on “Speedo” the racehorse, just because everyone does.
Speedo might be old, people might be foolish, and you might be deluded. And it`s too late for a refund.
How to Pick the Best Location You Can Afford?
The most important part in running a successful salon business is....
Picking a location that is both good for your budget, and helps you grow. … That`s what you should call “right”
Make the right decision, and your one – no, ten – steps closer to making money. Make the wrong one though, and your journey will be full of regrets.
The good news?
It all comes down to you doing your homework and asking the right questions.
Before putting your heard-earned money on the table you have to ask so many questions. And, more importantly, get the right answers.
You want to invest time, literally sniff around, and investigate every single location criteria in the book. It`ll take time of course, but it will make running your business much tolerable.
So what to do?
Start with the following steps….
Step #1: Touring the place
First you want to take a tour in the neighborhood where you plan to do business in.
You want to meet with small business owners around you and ask as many questions as possible.
Some of these questions are:
• How they started in the area
• How long it took them to make profit
• How much property taxes they pay
• What are their average utility bills per month
Think you`ll have a problem make them talk? Not at all
People love talking about themselves. For each one acting bitchy or you`ll have nine welcoming neighbors who`d love to help you.
Step #2: Assessing transportation
The second sign to a good location is having enough public transportation serving the area. This means more customers, and also means you and your staff won`t waste time.
Check the subway/underground app for any nearby stations and walk around to see if there`s any bus stops nearby.
Step #3: Assessing safety
You must make sure your place is super safe, especially if you intend to overcharge. Not many will pay you a visit if your place is scary or unsafe, especially at night.
Since you won`t change people, the best thing you can do is investigating early and before signing the lease. For this, you want to do three things:
Sounds a lot?
Yes it is, but better safe than sorry.
Step #4: Assessing prospects
The next step is assessing profitability. You want to make sure the salon will make money, how?
By investigating prospects…
Once you get the info you need, hit the nearest Starbucks or Dunkin Donuts and watch for who comes in…. These are your clients,
And they must match the ones you have in mind.
Otherwise, plans will change.
Your ideal locations here are those near coffee-shops, hospitals, large stores and big retailers. These places will guarantee enough visibility and enough traffic to your new place.
Step #5: Investigating the building
Seriously, the building???
Yes! This is the host, and place you`ll be part of for many many hears.
And you must make sure it`s not a wreck, it doesn`t need necessary repairs or have serious issues that will show up later. This requires work and time, but will save your Advil money.
Once you`re done, ask yourself this final question:
Can this place sustain any future growth???
If No.. well, that`s a deal breaker.
The worst thing you can do is grow into a small place, and be forced to relocate to another big, but far, salon.
Even if they like you, not many will go on board.
Mistake #2: Not Renting Your Manicure Area
Q: Ever thought why salons offer manicure services when it`s not that profitable?
A: Client retention, customer loyalty and making clients stay longer at the place.
A manicure area won`t make you much money. A good manicurist will make around 70% in commission each time a client asks for nail job.
And it almost leaves you with nothing.
A two-word way out?
Experts suggest you rent the manicure area in your salon and let your nail techs do their job.
They will pay for their supplies while you get a fixed, agreeable income each month.
Mistake #3: Designing the Salon Yourself
The money you`ll make in salon business will depend on how professional your place looks. This is a given.
However (and that`s a big however), you should avoid these two mistakes:
Both mistakes will lose you money.
You don`t want that, do you?
What you should do is hire a good designer/architect to make sure your salon is as professional as it should be. And work things out with him.
Thinking of your dream salon is one thing, and designing one is another.
You will make mistakes, and pay for them the hard way.
You can, for instance, buy salon stuff online – mostly furniture – only to find it didn`t match what they had in mind.
Or design your place in a way that screws every chance you have for expansion.
Your salon is your home and you`re stuck with for years. So every decision you make should be filtered by an external – and professional – eyes.
And by that I mean a professional designer.
But a designer costs money…. I know. But think of it this way:
If you do it yourself and mess things up – which is more likely to happen – you will have to redesign the whole place again.
And this means more money to spend and more time wasted.
I`m not judging your taste, but you should be cautious before taking the risk. If you really think you can do it, knock yourself out, it`s your salon.
But if it went sour though, nobody but you will pay for it, so mind the risk first.
Okay I`m convinced, now where to find a good salon designer?
If you someone you know owns a beauty salon, ask them. If you don`t, Google local designers, make a list of three, then contact them at the same time.
Tell them about your budget and what you expect out of it and listen to their vision.
You can also ask them to show you pictures of previous successes. A good designer will take pride in their past work, so it`s hard not to find any.
Mistake #4: Underestimating the Importance of a Retail Display
Many salon owners fall for this mistake. They think that just because the products they offer don`t sell, it means they shouldn`t use a retail display.
Yet, most of the time it`s the type, or price of the products they chose to sell that didn`t make clients buy.
A well-designed display with the right product can make a huge side income only if you know what product to pick and have some selling skills on the side.
So where to start?
First, get an idea about what products other salons are selling, and how they set their own displays.
(And by other salons I mean everyone you know including your competitors.)
You won`t sell everything they sell however, this will give you an idea about which products that will appeal to the majority of your clients.
Mistake #5: Setting the Salon System Too Late
You might think you must get every other ball rolling before picking the right software system for your salon.
It`s very important to shop for a decent software system during the designing process…..
Then install it long before the opening night.
You must not wait until it`s a few days before the big opening to order, and install your software system. This can cause many problems:
• You can underestimate how much space the system will require
There will be computers, credit card machines, printers and extra disks as part of this new system.
And you must consider them before you design the salon.
• You may also find yourself forced to delay your big open
It`s important that you start collecting client info as soon as you open and any delay in installing the system may lose you some important clients. So again, you should never open without a software system.
Unfortunately, you may take up to a month from the day you order the system to delivery day. Some advanced systems may even require someone from the software company to install them for you.
And I still didn`t mention practice time….. You and your people should know how to run that software “excellente.” And don`t make the mistake of handling data entry to one or two team members.
Everyone (including you) should know how to use the system effectively. If this one member is absent - or fired - your business can suffer.
Enough training for everybody means avoiding many future mistakes that may come in inconvenient times.
Shopping For the Right System
So what you should be looking when shopping for a solid software system?
According to Jeff Grissler who financed over 15,000 salons:
Solid salon system should tell how much money you will be making in the future by tracking client retention.
In addition to other basic features like booking visits, the system you pick must have customer profiles.
So you know two things:
1. How many new clients you get each month,
2. How many of them keep coming months after their first visit.
These – still according to Grissler – are the basic growth indicators you must keep eyes on as you track your business performance.
So how to pick the right software for your business?
This is much easier than you think.
First you`ll have to check the internet to compare between different types of software. Some websites like this one can help you compare between up to twenty systems.
(Pick only three.)
Grissler says you should seek only software companies that have been in business for more than two years….. (Look for both longevity and consistency.)
Once you have them in mind, check with other salon owners.
If they tell you this system is good, you can contact the software website and use their demo version.
If you like it, request a phone call with one of their salesmen so you can place your order and discuss anything related to your software including any training they might offer to your team members.
Mistake #6: Picking the Wrong Name
No, don`t call yourself “Hairy Cuts”, “I`ll cut your hair,” or “Rock, paper, scissors.”
(These are real names btw.)
You should spend time picking a name for your salon. Customers should know what value you offer and how much they`re about to pay from just looking at your sign.
You can`t have a high-end, luxurious-type of salon and call it “Best Heads”.
In fact, you should never name the salon after you or any family member. In the future, you may want to sell it. A bad name can give you a headache, or worse, make you sell a high-quality salon for less.
What to do?
Ask yourself what`s special about my salon then brainstorm any word that might relate to it.
Create your list and sleep on it for a couple of days, or a week. During that time, your mind will work on the perfect combination.
Mistake #7: Insurance Insurance Insurance
Warning: Some boring ol` History
Old Greek stoics had a tendency to predict and over-plan for catastrophes way before they happen.
Before going on a trip, a typical stoic would plan every single bad thing that might happen in what`s known as pre-mortem technique.
(Nice name, isn`t it?)
Today, big companies like Audi and Yahoo do the same before launching new products. They meet and spend a couple of hours acting as if this new product has already bombed,
and they plan accordingly.
They don`t think positive, they don`t rely on luck, they just think and work hard to cover every hole in their plans so when they launch, they`re confident they left no stone unturned.
This is the reason why they`re successful businesses.
And so will yours (hopefully) if you do your homework and plan for everything that might go wrong to your business. And that`s why you need insurance.
It Is Very Important…..
No matter how cautious you are, anything can happen to you or your business.
A client can slip and break her knee, another can get her ear cut by one of your hairdressers,
some fire might destroy everything you`ve lived for and put your business to the ground.
The only four words you need then will be…. My. Insurance. Covers. This.
So don`t be over cheap. Yes you have to watch the pennies and stick to a budget but neither you, me or anybody knows for sure nothing wrong will happen
You can think positive, but it won`t stop a thing.
(Say with me: Insurance is goo-oo-oo-ood)
So what to do?
Shop for an insurance plan.
A business-liability plan will cover the risk of any lawsuits made by an injured client or other parties.
The plan should also cover other basic damages like fires, especially electrical ones (24,000 fires in the US in 2014 were caused by electrical fires).
When picking the right company, do the same thing you did with your software provider;
Research the internet, ask your friends and other business then narrow down your list to only three with the highest experience.
Later, you can meet a company representative or salesman, discuss your needs and make a final decision based on your budget.
Mistake #8: You Don`t Have a Website
Many business owners assume things will go well just because they have Facebook and Instagram accounts.
For some, this is true. But for many, you`d be dumb if you don`t use your website to get more clients.
Especially new ones.
You can make more local clients visit your salon with a few days of work on your website. Some may even climb your VIP list on the long term.
All from doing what other salon owners don`t do:
Taking care of their web presence.
So, without further ado, this is what website will do for you:
1. Attracting new clients
Many salon owners believe that since they`re locally active, why should they tweak their content for a global search engine like Google.
At the end of the day, you don`t care how many readers you get from Boston if your salon is based in Essex UK, right?
Because though a nice, consistently-updated website will attract readers from all over the world, fresh content with the right key words can boost your Google ranking when new clients search for a nearby salon.
Simply stand into your client`s shoes.
If they`re new to town – or somehow want to change their salon – what`s the first thing they`ll do with their phone?
Answer: Google “nail salon” + “town/area/district”
The best thing about this part? The competition is so easy.
Take the following example. Your prospect is in Dumbo NY and she`s on her phone looking for the nearest beauty salon, so she types: Beauty salon Dumbo NY
From the picture the first result your prospect got was Flora Nails & Spa, followed by Salon de quartier New York (SDQNY).
Sounds like the best options, right?
You may think these are the best salons in town since Google puts them first on the list but if you click on “More places” you will find three more places that have way higher reviews that the two we previously mentioned.
A quick look will tell you that Fabio Scalia salon (which came seventh on the list) has better reviews (4.6) from more people (24) and is a few blocks away from Flora, yet the later gets the biggest piece of the pie, why?
Because the owner was smart enough to tailor his online presence to his clients` needs.
Out of the top ten sites that ranked on Google`s first page, Flora had three of them, and they had a simple strategy.
Unlike their “lazy” competitors, Flora went one tiny mile ahead and created a yelp profile.
They then asked some of their clients to post a quick review which you can get at least ten of them today if you ask some of your happy clients to give a word for you.
The Flora team rolled the ball even further and got themselves a third spot on Google`s No.1 page by simply creating a website.
And though their website was so primitive and looked like it hasn`t been updated since the Shaq-Kobe, it was enough to move the needle for them because guess what…. it`s the only one up there.
(Shame on you Dumbo people)
So where to start?
1. Blog frequently
You can climb on Google`s ranks, build credibility and help your clients by blogging frequently.
You can use some SEO skills and target a handful of long-tail keywords that have little competition.
They may not benefit you directly BUT they will boost your overall ranking so when some new client Googles salon+ your area you rank high like Flora from the previous example.
You then want write reviews for the products you sell or place it as “the ultimate solution” in your blog post.
Not just you will bring awareness to what you sell, there`s a good chance your review will rank high which will further enhance your online presence and boost your ranking.
Finally, pick some of the topics your clients care about like picking the right shampoo or taking care of hair in winter and blog about it, then round the post across Facebook, Twitter and other platforms.
2. Give your retail display an “online” boost
Your website can be another platform where you can sell more products.
Notice how smart the guys in Beauty Plus Salon are playing it.
Not only they sell their products on their main page, they have created a page titled “Top 10” to bait clients to shop online (even if they weren`t locals).
The name “top 10” is psychologically luring since everyone – especially women – are attracted to lists and want to know what`s best in the market.
3. Prospects will remember you more often
Email marketing is more effective in customer acquisition than social media (Link).
Studies show that customer acquisition via email marketing has quadrupled in the last four years, which is not a surprise to be fair.
Everybody checks their email everyday – including your clients. It`s more personalized and can make you more money if you use it the right way.
By doing the following (in order):
1. Get a website
2. Collect prospects` emails
Online: Using opt-in forms
Offline: By asking for it directly as your client checks out
3. Get your clients into the habit of opening your emails
By offering fresh, high-value content via your weekly newsletter
4. Send weekly offers
Sell your products and offer your promotions each week along with your fresh, valuable content.
The key to all this?
Because prospects won`t open your email if it doesn`t touch their needs. And since you want them to remember and appreciate you, binding your weekly offers with a solid, informative, visually appealing blog post will do the job.
So make sure you blog regularly, and make sure your website has the following requirements:
There are many good looking Wordpress themes that will look great for a beauty salon. They`re cheap (many are free) and won`t require much of technical knowledge to use them.
If you feel confused about it, this video can help you
See how Treatwell makes it easy for clients to book (and they look cool too)
The best, most professional and most prestigious salons keep an online portfolio of their best haircuts
More often than not you`ll have clients approaching you with a smart-phone or a tablet asking for a haircut similar to the one in your portfolio.
That should make you smile.
So keep in mind that some won`t ever step into your place without knowing how much your charge because for them, surprise equals embarrassment.
And no one likes to be embarrassed.
So what to do?
Let your website tell new clients how much you charge for a service. That simple.
(See how this salon has a full wedding menu.)
And this one
Surprise = embarrassment
Mistake #9: Speaking Features Not Benefits
The first mistake business owners make is not having enough cash to sustain it for the first 12-24 months.
The second – this one – is failing to understand their offering. In other words, they communicate with clients using the wrong language.
And that`s an easy way to lose money…
The secret of all great persuaders, politicians and salesmen is speaking the language of benefits NOT features.
In salon business, clients don`t come for a haircut, they seek a need that your haircut will offer:
Old people want to look younger (the need to feel liked and wanted)
Business people seek status and maturity (the desire for money, confidence and respect at workplace)
Others want to look sexy on the next date
And others may visit so they can brag to friends about your fancy place the same way they do about their new Mercedes (To need to feel significant).
What about you???
Your job is to find who comes to your place and what they need.. Then tailor your message to make them know you – and only you – are the one who can give them what they deeply need.
You have to speak to your prospects desires not logical brain.
Because that`s where all buying decisions are made.
The following is the list of the basic human needs, tailor your message to as many as possible and you will set yourself apart from your competitors.
1. Making money
2. Saving money
3. Saving time
4. Feel comfortable (make work easier – laziness)
5. The need to feel liked, and appreciated
6. The need to feel loved, attractive and sexy
7. The need to feel superior or outstanding.
Spend one day tracking how other people are moved. You will notice they all are persuaded by triggering the same seven needs mentioned above.
Mistake #10: Failing to Manage Discounts
Discounts and promotions can make or break your business.
Offer the right incentive at the right time and you may have a customer of life. Do it wrong however, and you`ll ruin your brand identity and wreck your perceived value that you`d better call yourself Groupon.
Why discounts get such a bad rap?
Offering discounts can often help you make a quick buck but it`s never a good business model on the long term.
If you enrich a culture of coupon hunters who only make a visit on discount days, your long-term profitability will almost vanish.
It`s like cutting your hard-earned income by 25-50% or seeing your business, team and services as less worthy than it really is.
Think of discounts as the way to:
• Beating competitors over new clients
• Treating your super loyal clients and making them even more into your business.
Other than that, 90% of your promotions will be useless. Instead of competing with other salons over the value you offer, too many discounts will make you compete over who`s the cheapest.
Don`t do this to yourself.
The Only Cases You Can Offer a Discount
1. To new clients
You want to lure new clients to leave their old salons and try your services.
To reach this deed you can use one of two approaches: first-visit discounts, and referral cards.
A 20-25% off the first visit can be a good catch to many clients. The fact that they`re willing to try you opens many windows of opportunity for you (and your team) to make them lifetime customers.
You can also rely on old clients to lure new ones into coming to you. Simply offer existing clients a discount if they refer one of their friends to you then offer a freebie to this new client as a welcoming gesture.
2. To your most loyal clients
First, and before doing anything, you must have a decent type of software that tracks who books when, and how often they do it. This will help you identify a tight circle of loyal customers who – according to the Pareto principle – will make up to 80% of your sales.
Once you identify them, your job is to make them super happy and make them feel important way before they step into your salon.
1. Unexpected Offers
Offer an extra, unexpected promotion on any extra service they ask for. The best, most emotion-provoking gifts are always unexpected.
2. Unexpected Freebies
Contact your product supplier for any freebies you can get. Then surprise your VIPs on their way out with any good-looking, nicely-wrapped sample of your desire.
It doesn`t have to be fancy, but still with value (You can do this with new clients as well, they`re sure to remember you for it).
3. Birthday Specials
Want to create a stronger bond? A nice birthday card sent by mail (real, snail mail) sided by a gift card.
Not just they`ll LOVE you for it, they`ll make sure everyone knows what you`ve done. (Remember, you can`t do all these stuff without a good salon software)
You can also use special occasions to promote deals and discounts.
Occasions - like Valentine`s day for instance – have a beginning, an end, and a high sense of urgency which urges clients to take quick actions but at the same time still perceive your services as of high value.
You will still retain the same brand awareness you want while making clients respect the fact that your place promotes fun, and you want to celebrate with them.