Making your salon or spa stand out above and beyond your competition has to be your number one priority as an entrepreneur, and small business owner. You must be diligent and relentless in this pursuit. With every new day more, and more hair, and nail salons, are labeling themselves spas. So, you will need to be bigger, better and different. No matter how well-designed your location (salon or spa) website, or sales presentation, without proper budgeting, you will more than likely, run out of money, or energy and fail. My motto in business is: "Anyone can get lucky. Not everyone can get smart." This article is to help you with your smart business thinking.
First the facts.
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Seventy percent of all small businesses close their doors within the first two years of operation. What's really scary is that ninety-one percent of all salons and spas, are owned and operated by small business owners. This means that only thirty percent of these entrepreneurs, who open a spa or salon will still be in business after two years of operation. The single, biggest reason for this is under-capitalization. In laymen's terms; they simply run out of money.
Sometimes this,(under-capitalization)can be attributed to lack of education; other times, just plain-old wishful thinking. But I digress. When I speak of education, I am not just referring to an individuals formal education, in obtaining their Business Management, International Business, Business Marketing, or any of the other specialized Business Degrees. But most importantly, to salon operating experience. Don't take me wrong, getting a degree certainly helps, but is not a fundamental prerequisite of being a successful entrepreneur; The education model in which I refer is operational management, and an individuals ability to manage, and hire a great staff.
You may be asking yourself what exactly does operational management, and professional's ability to manage a staff have to do with under-capitalization. The answer is everything.
A common (major) mistake when writing a business plan(assuming you have a business plan), is slanting plan numbers to make our dreams become a reality. This often results in under budgeting (under capitalization), based on best case scenarios. If you can't make your worse case scenario numbers fit your plan, stop and re-evaluate. My advice is to save a little longer, and get into a stronger financial picture, to save yourself a lot grief, stress, and heart ache later.
I have many friends who have opened ultra-chic, hip, swank, spas and salons. And, I am sorry to say, that many had no idea of what it takes to stay competitive. I would guess a majority of salons, and or spas usually have same, or similar visions of what's cool. So, if all you have is a pretty location. You will lose your market share when the next (nice, pretty, swank, hip)location opens, or remodels.
So, I think it all comes down to this. It's easy to see our dreams. It's difficult to plan our dreams into reality. I think my friends, and associates visualized themselves working in a beautiful location, and knew what tools, they need to make that happen. They themselves already possessed the skills needed, to get started, but generally what they lacked, was knowledge. The knowledge to keeping going, and grow, and still love what they do. (Yeah... you can work, and hate what you do. But, then what's the point of being a entrepreneur, if you hate the job stress.) It takes a lot more than talent, to maintain a sustainable business.
The truth, in a nutshell is this. In today's salon and spa environment you can't do it all yourself and grow. You will need a few things. First and foremost, you will need a unique selling proposition(what makes you stand out from the crowd), and team that supports your visions and core beliefs. To build an amazing team you need capital. Having a great team will set you apart from you competition.
Employee investment, is as important as an investment if not bigger, as having a knockout (pretty) location. Think about this. Have you ever been to a cool-looking business whether it be, a clothing store, or restaurant, and the service sucks. How did you feel? You probably hated it, and swore never to go back. I bet, you definitely won't be recommending it to a friend any time soon. As a spa, or salon owner you are in the people service business, and referral business is a big part of it.
So, one of the keys of maintaining your S.C.A (Salon Competitive Advantage) means you need to allocate enough money to retain the best quality people at your location. If you have ever lost someone who was great employee, to another salon based on a few bucks; even a thousand bucks, in the grand scheme of things, you deserve a (firm) finger waving, shame on you! Every employee you hire, and train is an investment in your future success. You spend money, time, and emotional energy, in training employees; and every time you lose one, you have not only thrown money away, but you spent your money, training another salon/spas employees.
I would like to end by telling potential entrepreneurs to follow, and visualize your dreams. If your dream is worth following, write a solid action plan, so all your dreams can be realized. Dream big, and think smart.
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