Bizzare situation, can you help?

[lady R]

Hello all

This really is strange and I am not sure why. I had a tanning and beauty salon for 3 yrs and it did fab, i was booked up all the time but didn't really make enough for a wage, just bits and bob here and there so i decided to expand and move to a better location.

I got a business partner and she does hair, I do the beauty side our salon is great and i am booked pretty much solid tues/fri 9-5 and wed/thurs 10-8, most days the clients are back to back, I am fully booked at least 2 weeks in advance, most days i don't even get dinner!!

But still no wage??? I admit at both places our overheads were high around £1500 just for the shop (more inc stock) and the busier it gets the more stock we need but what am I doing wrong?

Help!!! (before my husband divorces me......)

My prices are the average for our area (small village) but I have no idea

 

[Kate1982]

Hon it's simple you either have too many expenses or your not charging enough. You say your prices are average with your area. Well perhaps the salons in your area don't have as many overheads as you or perhaps thay arn't taking a wage either. There's nothing wrong with increasing your prices. Sure you will lose some clients but you will make this up by what you take. If you are as busy as you say then you shouldn't have a problem. Why stick to average, stand out and make some money.
Income-outgoings=profit/loss it's that simple. xx

 

[Redchick]

Wow this is worrying. I'm going to be really honest here and say what I think. Maybe you're not cut out for business.

Clearly you have the likeability and skills to build a client base. If you're that busy you should be taking a decent wage. Something is seriously wrong. As Kate said, it can only be those two things, simple really.

The fact that you've carried on for 3 years, not sat down and broken down the cost of everything to work out where you are going wrong is worrying. Would you have been better off employed over the last few years?

What's worse is you say you have no idea what the problem could be. At the moment the problem is the way you're running your business. Maybe you need to get an acountant to have a good look over your figures. Help point you in the right direction.

 

[angelina221]

Have you got a website so that we can see your prices?
If you are fully booked then you should be taking around £300 a day so one week would should cover your rent.

 

[An*Gel]

Either you are spending more than you are making or you are being robbed blind!!

You need to sit down and do your accounts missy and fast!!

:hug:

 

[ProperPrincess]

I take it you asked the question for some help. Not to be shot down If your booked and good at what you do....your cut out for business. But maybe you need to approach it a bit differently hun...

Cut your expenses where possible or raise your prices.

Keep note of every profit and loss.

You may be busy because your good and cheap. Im sure as long as your standards are kept high people will stick with you if you were to increase your prices xxx

Good luck xxx

Sent from my GT-S5670 using SalonGeek

 

[persianista]

it would be a good idea to have a meeting with your accountant, and work out exactly whats happening here. Your accountant can disect your figures properly and work out why you are earning nothing.My guess would be that in trying to grow the business, you have maybe overspent in some areas and hit a cashflow issue. Not easy to spot when you are running your salon day to day, but your accountant should see it.

 

[Lynne Baker]

Am I reading this correctly? You work only 4 days a week, and there's just you, and you don't work saturdays?

 

[Lynne Baker]

If your booked and good at what you do....your cut out for business.

Not necessarily! She could just be cut out for carrying out treatments!

Learning about business is far more involved than you would think.
Years ago I went to jongleurs. The stand up gave a young woman a hard time because she was studying business studies. "wtf is there to learn about that?!" he mocked, "you buy stuff, you sell it for more!"
I'm a distributor for 3 brands and let me tell you I thought it would be easy until I actually started doing it!
There are so many issues ranging from people not wanting to settle their accounts, to the post office losing stuff, to customs hanging onto my goods at the airport, to resellers shouting at me when I can't get stock from the manufacturer.

It should be all so simple, but it's anything but.
And without wishing to be rude to you, weren't you considering giving up the industry because getting clients was proving almost impossible?

It's never simple. There are too many variables for it to be so.
Also, sometimes you need someone dispassionate to look at your business and cast a fresh eye on it.
Business link used to offer such a service for free - they still might!

 

[persianista]

just re-read the original post, thanks to Lynne.

Four days a week, even full booked are not really enough to cover overheads of that size, if rent alone is 1500. As a rough guide, take your rent and treble it for the truer cost of running your salon. You need to maybe open more days and take on some staff to justify a building that expensive.
There is a limit to what kind of building a salon can support.

 

[ProperPrincess]

Not necessarily! She could just be cut out for carrying out treatments!

Learning about business is far more involved than you would think.
Years ago I went to jongleurs. The stand up gave a young woman a hard time because she was studying business studies. "wtf is there to learn about that?!" he mocked, "you buy stuff, you sell it for more!"
I'm a distributor for 3 brands and let me tell you I thought it would be easy until I actually started doing it!
There are so many issues ranging from people not wanting to settle their accounts, to the post office losing stuff, to customs hanging onto my goods at the airport, to resellers shouting at me when I can't get stock from the manufacturer.

It should be all so simple, but it's anything but.
And without wishing to be rude to you, weren't you considering giving up the industry because getting clients was proving almost impossible?

It's never simple. There are too many variables for it to be so.
Also, sometimes you need someone dispassionate to look at your business and cast a fresh eye on it.
Business link used to offer such a service for free - they still might!

I wasn't aware this was about me. I think after 3 months on my own i can't be considered not cut out for it. But i can return to a highly successful career if i was to fail. Im not losing money. I have an a level accounting so i know pretty much what Im doing financially. But again i didn't know it was about me.

And basically i was trying to give the op a confidence boost after a geek in my opinion was mean. That's my opinion. So sorry for trying to b nice!

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[Lynne Baker]

Being nice is nice; I'm all for that!
In this particular circumstance the OP doesn't need us just to be nice; she needs the benefit of people's experience, and sometimes that's uncomfortable to hear.
I didn't mean you (proper princess) when I said she's not necessarily cut out for business. I meant that for anyone who's been running a business for 3 years and still can't take a wage.

 

[ProperPrincess]

Gosh agreed. But i think there's a way of saying and going about things sometimes. I Just feel sorry for her Im struggling now and then but i have.the security of being trained in something else x

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[angelina221]

Sometimes in situations like this, there can be a very simple solution. Some people are just not very business-minded.
One in 3 new salons fail in the first year and it's nearly always down to cash-flow problems.
I really think you need to get an accountant to go through everything with you and see if they can make suggestions.
A good accountant should save you more money than they cost so it may be a good idea to get yourself one.
I have an accountant and she does all my paperwork and then I don't have to worry about anything.
I don't think £1500 is excessively expensive for rent and you should still be making a profit if you are fully booked so something is amiss somewhere.
I have all my outgoings written down and know exactly what is coming out on what day.
Too many people think that if they are covering their rent then they shoulod be ok but like Dawn said, you need to treble that amount.
Their are all your other utilities plus rates, licences, insurance, loans, printing costs, PDQ machine fees, cleaning stuff and the list goes on and on.
Have you got a list of everything you pay, written down? If so, I could always take a look for you and see if I can spot anything.
I really would suggest getting yourself an accountant though.

 

[lady R]

Thank you all for your replies!
I love it that you all ca be good and honest on here! And believe me no offence is taken!
I think i wrote down my hours wrong, I don't work sum/mon but do the rest of the week. Also we have a part time receptionist to cover.

As far as I have worked out it costs £100 a day to cover all running costs, obviously that goes up if we restock, printing etc, I am established so am always busy but the hair side is new so maybe that just needs more time to establish.

As I work all the time I have no time to sit and go over the books etc so I will be making time from now on, and looking at better ways of increasing revenue without burn out!

I will be researching more ways of marketing too. I think I have spent so much time wrapped up in DOING the job, I neglected the actual day to day stuff, stupid of me really, but hey, I am not proud and will shout from the rooftops if i need help......hence this!

I also have my original tanning salon that was due to sell a week before the new one opened but he buyer pulled out 2 days before( made me strip out my powerplate studio and beauty areas) and left me in a real mess, its been limping along and another buyer came along and pulled exactly the same stunt!! Have been in a very very bad way but have now slapped myself, pulled myself together and i am rebranding, making it look fab and being REAL wary of other buyers!!!!!

So, its good to know when you do need help, others are out there.Thank you all for your support and advice!

ps - if any one wants a sunbed salon...going cheap!

 

[Lynne Baker]

£100 a day!
So, if I had to take out £700 every week before I made any money at all I'd be looking at that very carefully!

 

[Redchick]

Lady R - Thank you for not taking offence. I'll admit, I was a bit blunt and could have worded it better. Sorry!

Good luck x

 

[MsRebeccaJ]

I'm sure you will but just thought I would mention the retail side of things. How much do you retail? Could you increase it? Would your receptionist benefit from some kind of training in the products you retail or a small commission from things she sells. I understand your problem is much bigger than the retail side of things but every little helps

 

[Sarah-Jean]

£100 a day doesn't sounds too high to me - my salon is very small and generally costs about that if not more on our busy days... Considering you have other staff. I think it's very easy for people to get stuck on the shop floor and stop seeing the bigger picture. You are a business, your main function is to run the business and do the marketing. It's great that you also work shop floor but I've always found that is at the expense of something else - whether it's drawing a wage, or time spent on the business, or time spent with family. That's one of the main reasons I refuse to work shop floor - my sole function is to run my business.

Of course everyone is different, and some people love working on the floor (I do too but I prefer to do it as I please/am requested, rather than because I have too) but it's a lot harder to run the business side of things.

The first thing you need to do is take an honest look at where your money is going. If your salon is so successful and bringing in so much work, then it must be making money. If it isn't it's either because you're bargain basement cheap, or you're spilling money out somewhere else or someone is screwing you. The latter is likely to not be it, and I don't know what you charge... So I'm going to assume you're losing money elsewhere. And considering you have no accountant, no marketing strategy and no realistic idea of what your money is doing it's a hard one to guess where it's all going.

1/. Get an accountant. And BE HONEST with them.
2/. Cut all un-necessary costs.
3/. Maybe take a step back and employ someone else to do your job, even if it's just a few hours, part time, a week. Firstly it will give you a break from what you're doing, and secondly it will allow you to focus on the admin and marketing scheme you need to bring this business into profit and make a good living from it!

Good luck!

 

[Sarah-Jean]

Actually I'm going to change my opinion.... You're running at about the same rate as me... But with no real staff. Is your partner (hair) taking a wage?

Having thought about it your rent and your overheads seem high, so try and shave some money off of those. Literally everything you spend money on, tackle individually and try and save some money.

Also if you're "average" in pricing, but fully booked two weeks in advance, I might have thought you could probably get away with a few percent (maybe 6-7%) price increase. Then the chances are by the time hair is up and running, and you have your price increase, and you shave every cost you have you should be in profit and drawing a wage.

So to do a complete turn about, I think your main function is to figure out where and why your money is going (and actually, an accountant probably won't do this for you they'll just organise everything so you can see for yourself) and cut it back. It's very easy to think that things cost what they cost but actually most thing can be scaled back. Equipment, supplies, phone lines, electricity, gas, water, insurance... Everything can be saved on - it's just knowing where to find it and doing a LOT of research!