Targets are a key component of a profitable and successful business. They motivate and focus your team to achieve goals that can grow your salon, spa or clinic.
However, if you’re finding setting targets difficult to get your head around, we wanted to demystify them to help you get started!
How to decide if you need both business and staff targets
It’s really up to you! You can choose to only have business targets in order to formalise your business goals, easily track progress or, if you employ a manager, as a way to motivate them.
If you decide to only set targets for your staff, they’re a great way to motivate, inspire and empower your team.
However, when you have both business and staff targets it can be the ultimate combination! Your business targets are big-picture goals that will shape the direction of your salon, spa or clinic. And the combination of each individual’s performance and achievement of their targets is what will ultimately help reach your business targets.
How to choose which targets to track
When identifying which targets to track, there’s a couple of things you can think about:
- What are your overall business goals?
- Are there areas in your business you can improve?
It’s then a matter of determining which targets will drive your team towards achieving your business goals and the targets that will focus your team’s energy on addressing areas that require improvement.
For example, if your client rebooking rate is below 70%, there’s an awesome opportunity for improvement! Provide your team with some training and tips on how to rebook their clients, then set a motivating rebooking target in Kitomba 1.
Kitomba allows you to track seven different targets:
- Total sales
- Service sales
- Retail sales
- Appointment retail sales
- Total appointment value
- Average appointment value
- Client rebooking
How to determine if you need weekly or monthly targets
The importance of putting a timeframe on targets can’t be underestimated because:
- It creates focus and helps your team to concentrate their efforts.
- It motivates your staff to work hard to reach their targets.
- It allows you to correctly determine if the target has been achieved.
Choosing between weekly and monthly targets is really about deciding what will suit your business best. Here are some things to consider to help you to decide:
- What timeframe do you put on your business targets? It may be easier to do the same with staff targets.
- What would best motivate your team? Will they work harder if they have less time to achieve a target or are they good at playing the long game?
- How are they rewarded for achieving their targets? Do they receive a weekly incentive or are they paid commission monthly?
- How frequently do you review targets? Do you prefer to look at them often or set a monthly meeting?
The good news is, monthly targets are coming to Kitomba! Very soon, you’ll be able to set weekly or monthly targets in Kitomba (depending on what suits you).
How to calculate targets
Start at a business level
- Begin by calculating a revenue target for the year. You could forecast this by looking at your Kitomba Business Summary Report to see revenue for the previous year. Then, based on your goals, determine how much you’d like to strive to make this year. Alternatively, look at your expenses (rent, wages, stock) to determine how much it costs to run your salon each year. Based on that figure, you can calculate a profit goal that provides you with a revenue target.
- Next, you can work out your monthly revenue target. Remember to take into account fluctuations in the year, for example, the busy Christmas season or quiet winter period.
- If you’ve chosen to set weekly targets, you can also break this down into weekly revenue figures.
- Now determine what split of your revenue is coming from services and retail.
- And now you’re ready to set your business targets in Kitomba!
Next, calculate staff targets
- Your staff targets should align with your business targets. For example, if your business target is $10,000 revenue per week, and you’re a salon with 4 staff, each individual needs to make $2,500 a week on average.
- However, you need to take into account everyone is different. By creating individual targets based on skills, experiences and pricing, it ensures targets feel realistic and drive staff to deliver the results you want. For example, if you have an apprentice, two senior stylists and, as the owner, you work 20 hours a week, it’s might not be realistic to divide the weekly business target by four. Instead you may determine your two seniors can make $3,500 per week, with 20 hours, similar experience and pricing you can make $1,750, and your apprentice with less appointments, experience and lower pricing, could achieve a target of $1,250. Ultimately, this still achieves your $10,000 revenue per week target.
Hopefully, this demystifies how to get started with targets. The next step is introducing them into your business. For advice on how to do this, read our How to introduce targets into your business blog.
Don’t have Kitomba targets? Get started now.