When it comes to numbers I can safely say quite a few salon/spa owners would say “It’s not my thing.” The challenge with that thinking is that numbers (especially Kitomba’s report numbers) tell you the true story of what’s really happening in your business beyond how it ‘feels’.
If you would like to understand your business better then here’s a few numbers you should start looking at:
How much it costs to open your doors each week – your accountant should be able to tell you this based on your last end of financial year figures. Knowing your overheads gives you peace of mind and also if you are falling short, the number you need to aim for to get your ‘profit cake’. Do you need more clients or do you need the clients you have to spend more money, or a combination of both?
Stock is a big overhead – but you can benchmark this. If you’re a salon, your technical stock budget (colour, basin stock, treatments etc.) should be around 10% of your services turnover. Your retail stock spend should sit at around 50-55% of your retail turnover. The key thing to remember is that if your numbers aren’t around these percentages there could be a few contributing factors including stock wastage, undercharging and your pricing being too low for the cost of business.
Your wage percentage – this should be around 30-35% of your turnover. It can be a challenge to keep it there but that’s the number you should aim for. If you’re totally out of whack then you have two choices….you need less staff or you need them to increase their turnover and be more productive!
If you would like to know more about how Kitomba can help you to see the performance of your business, contact us for a free demo.
Article courtesy of Brenda Perham,
Business Coach, Bamboo Consulting