How do I as a salon owner determine appropriate booth rental rates?

Do it by the numbers with your end goal in mind.

How much do you want to make clear in a year?
What percentage of turnover would that figure represent?

Lets say you wanted to make 45,000 in profit.

If all your expenses add up to 99% of your turnover, then for your 1% profit left over to be 45,000 you would have needed to turnover 4.5 Million, unlikely I know, but I'm just starting with big round numbers for the example.

Let's work that example the other way.

Lets say our salon turnover is a more realistic 300,000 annually.

If we wanted to clear our 45,000 profit out of this business, we would need to keep our expenses down to 85%, so that 45,000 is 15% profit.

To keep expenses in the region of 80 - 85% we will need to breakdown our expenses into benchmarks, or if you like give each area its own budget.

An example budget could be:

135,000 = 45% Cost of Team
 39,000 = 13% Operational expenses
 30,000 = 10% Stock
 30,000 = 10% Rent / Loan
 21,000 = 7% Marketing
 45,000 = 15% Profit


300,000 = 100% Turnover

Obviously you can massage these benchmarks to your circumstances, so if your stock and rent don't cost you this much per year, you can increase what you can afford to pay the team, without cutting into your goal profit or even achieve greater than 15% profits!

Generally the percentages for most healthy businesses will be within 5% of these benchmarks.

Try this exercise to determine what you can "profitably afford" to pay.

1. Go through your annual accounts and arrange your expenses into the broad categories of Operational, Stock, Rent, Marketing to calculate them as a percentage of your turnover, then add them up for a total percentage. Call this number (A).
2. Decide on your goal profit percentage for next year? Will it be between 5% & 15%? (If you haven't made a profit yet or for a couple of years, make it 1% or even 1/2%. Call this number (B).
3. Take your total turnover figure and minus (A) and (B) from it. Appropriate or not, this figure is all you can afford to pay the team without dipping into your profit goal or worse making a loss.
4. Take this figure and divide it by the number of team members working the booths. (If you employ dedicated receptionists not responsible for producing salon income, for this exercise you could add the cost of their wages to (A) first, by considering them an Operational expense).

You now should have an annual figure of what the current business turnover can afford to pay each booth worker.

If this isn't enough to provide an attractive or sustainable annual individual income and you can't reduce any overheads calculated in (A) and the profit goal you set yourself at (B) is reasonable for the business turnover, then your team is not productive enough (too many appointment spaces) and / or your prices are not set profitably (too low or too much discounting).

Hopefully this exercise has shown why is can be a mistake to set flat rates.

Even if you keep the other 4 expense categories at 5% less to release a further 20% towards paying the team a rate of 65% of turnover, what incentive is there to book in 7 clients over 5 clients for the day? Being 50% productive of available appointment times, might provide the booth renter a comfortable income, but cost you roughly the same expenses as if they had of been working closer to their full potential.

The only difference is it will affect your profit goal, or cost you money as a loss & wont have done any favours to the goodwill of the salon.

THE SOLUTION TO APPROPRIATE PAY RATES

Its better to reward teams on progressive scales, where the higher the target hit the higher percentage of turnover can be paid.

Here's a blog on best ways to compensate http://salon-management-nexus.blogspot.co.uk/2012/03/whats-best-compensation-model-for.html

Best way to attract team members http://salon-management-nexus.blogspot.co.uk/2012/04/what-is-best-way-to-attract-new-team.html

A Season for every Salon

What motivates people with their natural differences in thought, skill, passion to put their time and energies into the same enterprise at different stages of their life?

Amazingly I have come across some order to this constant cycle we all grow through. The natural flow of things like the seasons, Spring round through to Winter, before the new Spring again.

Understanding this flow can make unraveling our own paths at lot easier, because we can work with it instead of against it. We can actually understand were we are now in relation to what season whatever we are picking our way through is at, and we can even look ahead with relative certainty to the phase of the next season in cycle.

For example, everything starts with an Idea - The Spring Phase - this is the "What". In the salon industry the "What" might be the idea to have our own salon business. Spring energy is creative energy, so we form our idea around what kind of brand we would create our salon business to be. What will it look like, how will I furnish it, light it, theme it. What product ranges will I carry, what services will I offer, what will I call it.

Following Spring comes The Summer Phase - this is the "Who". This is the realisation that I cant turn my idea into a working success on my own. I need a team, I need partnerships. I need the differences others will bring. I need others to be attracted to my idea and help me take it to the next level. Of course I need clients, so who will they be? Who am I targeting my idea too?

Summer gives way to The Autumn Phase - this is the "When". Its all about the timing. Is it really the right time to set up my own shop? Did another chain just open in the same area? Are people moving out of my village at an unsustainable rate at present? Am I planning to extend the family in the near future? Is there too much of a shortage of qualified professionals to attract the size team I need? Is tax about to rise? Is my intended business partner about to go through a divorce? or could the timing not be better... Your current boss is offering you a stake in the business with the view of helping you into buying it out. The current owner wants to open a second location with you as a partner. The local council has begun a rejuvenation of the areas surrounding the high street, promising an increase of trade where you can pickup a good lease.

The Winter Phase - is about the "How". Its about proving the robustness of the business. Ensuring positive cash-flow that can weather any season. By this stage the business isn't just proof of concept, its matured into an operational system that can be consistently duplicated, tested, measured and improved further still, whilst taking advantage of each team members differences and strengths.

That's where Spring can shine through again, as fresh ideas are tried and implemented to allow a new growth phase. This may lead to a change in team roles and responsibilities (a new summer phase), which could lead to a time to expand or consolidate (the next autumn) and so on through the natural order of things.

Understanding this flow can help us not to work on unpicking to wrong knot for what stage we are actually in and save us a lot of wasted time and resource.

The WHY, WHAT, WHO, WHEN, HOW of Salon Spas

I see "What we do" in salon more of a by-product of "Why we do it" and so rank Why higher in importance. Also because our Why tends to change less often than What we do.

In our career our Why naturally must first meet our own hierarchy of needs. We start by  needing a job to pay the bills, but to stick at that job, our Why will soon grow, so that the job also needs to satisfy our interests, challenge our skills, fulfill our passions.

For many our Why evolves further still, to others; delighting clients and nurturing those in our circle of influence following the same career path.

For some the Why gets even bigger as what we accomplish in business allows us to give into more social projects, even as much as leaving a legacy others benefit from after we've gone.

It will be hard for your Why to grow to higher levels of meaning if you don't excel technically in "What you do", so for anyone starting out with whatever 'Why' that motivates you, a focus at being good at "What you do" should be where you begin. After all a qualification in What you do, is only just the beginning of your career.

As for "How we do it", I feel this becomes a lot easier, when we next think about "Who we do it for" followed by "When we do it".

In this often ego fed industry, pointing out that the 'Who' is not You, is not quickly received - because if you don't look after yourself, no-one else will, right? True, however, we have already got 'You' covered up to this point. You have taken action toward a career path to meet your current 'Why' and you have concentrated your attentions to become good and always getting better at "What you do". So You are covered enough at this point, for it to be OK for the rest of "Who we do it for" to not be about You - and that's where You can truly be rewarded. The Why - What -Who questions create a constant circle. It's in the circle of flow, that greater things come back to you.

As a skilled salon professional, the Who is now all about the client. When you don't have a client in front of you, make it about training others in your team, (unless you're still the least trained in the team, then learn from others) otherwise offer up spare time to work ON the business.

Remember I started by saying "What we do" is more of a by-product? This is really important when we focus on the "Who we do it for", because if What we do is, for example a haircut, then it goes without saying that the client should receive a great haircut - its what they are paying for, so the very least they should receive. However they can get a haircut from any salon, so what is their why for coming back to your salon?

The client must value the experience and to come again and again, they must trust the experience, hopefully enough to recommend it to their friends. Their experience is largely the responsibility of the team members performing the "What we do" in salon and so if the team is not constantly focused on this "Who we do it for", they are likely to miss out on their part of providing a delightful client experience.

"When we do it" is the easy part. Every visit, every time. Okay so maybe its not that easy to delight a client every time, but the important thing is for the entire team to be consistent in your intent to delight every time, which means not getting complacent with our most frequent clients by skipping on consultations to check we are providing full care solutions or recommendations to met their needs, or to know if they are ready for some new suggestions.

Which finally leads to "how we do it". Truth is How a salon chooses to do it, isn't important, so long as you can do it consistently, profitably and measurably to know its working or not. Efficient operations providing good work in 20mins without the need for an appointment can be just as successful as opulent establishments that allow an hour to deliver the same by-product, and everything in between, as there will always a customer for every place in the market.

What is the best way to attract new team members to my salon?

Salon Owners should see their own role, not of one that directly focuses on serving the Salon Client, but firstly to serve the Salon Team. (It's the Salon Team, which focuses on serving the Salon Client, the properly serviced Salon Client is then much more likely to serve the Salon Business with loyalty and then the Salon Business serves its purpose to the Salon Owner) - see http://salon-management-nexus.blogspot.co.uk/2012/03/is-your-salon-built-to-last.html for more on this.

This means for the Owner - its all about the Team. Its about creating a workplace internal structure that rewards better than they are likely to find anywhere else. And no, this doesn't mean just financially. Money will always be a strong motivator out of necessity, but there are plenty more needs a great job will provide, so the best internal workplace policies will include structured rewards for;

* A clear career path for promotion advancement
* Recognition for excellence
* Flexibility in rostering or ways to earn bonus time off
* Salon Perks - Service & Retail rates for the Team and or family
* Opportunities for Industry Awards
* Annual Events
* Training and Education
* Team Clubs / Points / Member of Month, Quarter, Year
* Partnership opportunities in existing or additional planned sites
* Long Service benefits
* and off course multiply forms of performance based bonuses and commissions

Be as creative as there is need to drive any area of the business forward that would benefit from factoring in an affordable and equitable way to cultivate additional buy-in from the team, so the more they put in the more they can share in the returns they are responsible for generating.

We encourage salon owners to take an in depth look at the numbers that make up the internal mechanics of the business, (or we do if for you) so that you can set out your Salon Progress Ladder - see http://salon-management-nexus.blogspot.co.uk/2012/03/whats-best-compensation-model-for.html and also document your own chosen mix of the above Team Perks into your Salon's Team Member Handbook - see http://www.nexusrevolution.co.uk/I-Need/Less-Headache.aspx

This way when you are advertising positions vacate, your potential new team member can be shown in black and white (although we do customise Salon Manuals to your salons branding), exactly what is so attractive about being a member of your team.

Do you have salon managers that split their time between technical client services and business management functions?

How you need to allocate admin hours may vary week to week depending on the growth and needs of the salon.

If for example, the salon is currently recruiting, a manager may need to set service appointment time aside to interview, run trials, induct and even train new team members.

If the manager is responsible for stock control, then one week could include ordering or receiving, but not the next, then again their will be times when a 100% stock take is required to be managed.

Some salons have great habits of conducting monthly style sessions as additional training time and also quarterly team member appraisals, if not the opportunity to schedule weekly 1-2-1's to address certain team member requirements.

The list of course can go on, with marketing, reporting, seasonal planning, banking, industry awards, photo shoots, team scheduling, pays, bills, general maintenance.

This all becomes a huge juggle for managers who service repeat clientele and can be a bigger headache for salon owners to calculate reasonable bonus targets and pay commissions when weeks vary so much.


Nexus Revolution comes to the rescue in a number of ways.

* We provide salons with an equitable Salon Progress Ladder, which can be used to quickly and easily calculate individual targets for service, retail, productivity, rebooking, retention, clients (whatever you need to measure) for any level in your salon structure, be they an assistant, graduate, senior, manager, director - based on the actual floor hours they spent servicing clients, so you can always fairly reward the team against the actual time they were split to provide client services. see - http://www.nexusrevolution.co.uk/I-Need/More-Profit.aspx

* We provide salons with a documented Operations Manual, backed up by easy to follow checklists to make every management task mentioned above an easy to follow procedure, saving the time it takes to train, delegate and complete the various management responsibilities, the way owners want them done. Which also makes it possible to spread tasks within roles, across team members who might otherwise have idle appointment times. see - http://www.nexusrevolution.co.uk/I-Need/Less-Headache.aspx

* We provide position descriptions for the entire salon structure, with specific duties for reception, assistant managers, managers, trainers and owners - which can also include specific admin related performance bonuses to further compensate team members who need to come off the floor from servicing clients. see - http://www.nexusrevolution.co.uk/I-Need/Less-Headache.aspx

One final tip: If you haven't yet - invest in a computer that allows you to schedule admin tasks and team sessions in advance on your quite days / times and then take client booking around these. This way if you do need to open the time back up for client appointments you can see at a glance where you can either reschedule the salon task or weigh up its administrational importance to leave it in place to ensure it gets done.

Is your salon built to last?

Employee Agreements - Commission Structures - Salon Pricing - Correct Client Billing - Professional Product Use - Product Wastage - Profitability - Sustainability - Theft (stock & clients) - Old Habits - Fresh Starts and more.

No matter what your experience or how good an operator you are, it seems the headaches never stop.

The bottom line is a business must be setup to profit by a fair exchange of value for everyone concerned within it.

The 'Happy Business Cycle' works like this:

The Business rewards the Owner by what the Owner does for the Team,The Owner rewards the Team by what the Team does for the Client,The Team rewards The Client by what the Client does for the Business.

It's pay it forward to be rewarded; only that if the value of exchange is not fairly built in, the cycle stops, because somewhere in the cycle someone will eventually stop putting in because they're not getting what they need back out.

Fortunately the buck always stops / starts with the Owner.

Unfortunately, especially for the adopted practice of many salons in US in particular, where the majority opt for chair rental or 100% commission, too much ownership has been handed to the team.

If that's working for you, by way of measurable sustained growth and profits - great. No need to fix what isn't broken. Happy Team, Happy Clients, Happy Business, Happy You.

But if your team keeps leaving, your clients keep leaving, your money keeps leaving, more often or faster then these should, where does that leave you?

If you feel you're still in it to win it, you'll probably find your team and your clients are too, (so long as there's going to be a good exchange of value remember), so why not invite them to continue the journey with a renewed sense of focus. A focus on the numbers. It's what ultimately the business will live or die by, so you must take the time to get them right and the team will need to know what numbers they will be responsible for and what they get a share of when they do take responsibility. Client numbers will follow once the owner and the team work their part of the plan.

Nexus Revolution begins working the numbers based on calculating the profitability of every service you provide for every team member that will be providing it. This takes into account service timing standards for each salon level of experience and how much back bar product or other consumables is required to complete the service, so there's no further need to add-on charges or fees to clients or the team.

From here we workout a fair way to share salon income from services and retail based on the individuals experience level and consistently proven track record, for performing at an agreed standard across all measurable targets; by way of a Salon Progress Ladder to reward and motivate everyone based on what they individually want to be held accountable too - which avoids trying to make a one-fits-all policy that can seldom be fair. See http://salon-management-nexus.blogspot.co.uk/2012/03/whats-best-compensation-model-for.html for more info.

Once sustainable and profitable accountability on the numbers is restored as the 'why' the owner and the team are taking the same business journey together, we continue building the business foundations on 'what' we are here for - how it is we do the business and what it looks and feels like for the team to work there and the clients to experience, which brings us to the 'who' we do this for and how often we do it - the 'when'.

Want to know more on the 'how'? Visit http://www.nexusrevolution.co.uk with 15 years experience helping 100's of salons and 1000's of people when can assist with your next necessary step.

What's the best compensation model for retaining excellent employees?

We encourage building professional teams that look at the balance between their responsibilities to the client and their role in the business holistically.

That means understanding that to serve the client completely they not only need to focus on improving skills to a high technical standard, but also activity seek to give the client full service to meet all their needs. Which after a professional consultation to plan their service recommendations, will include the right retail solutions, and the correct rebooking solution to maintain their look.

Nexus Revolution builds this all-round approach into a salon progress ladder that acknowledges that the team will be made up of different levels of experience and expertise within the salon structure. Therefore a one-fits-all approach will never inspire the entire time or be a fair way to reward them.

We take the time with salon owners to get their wage and commission structure right, so that it is not only affordable and profitable for the salon, but provides a clear motivating career path for everyone.

It works on the principle of paying an increasing base salary to acknowledge seniority, but also sets increasingly higher bonuses for achieving increasing targets, so not to disadvantage or demotivate newer members of the team or those just starting out.

The progress ladder allows for many other important considerations, such as different level pricing and timing standards and different training needs. It also allows individuals the 'permission' to only move up the ladder as high as both their comfort and competency warrants. Taking the pressure off a long standing senior member, to simply get on with what they enjoy doing at their level, rather than being forced to act in higher training or management roles.

This means the Progress Ladder meets the needs of both the ambitious and the content, who both are provided a set out way to be justly rewarded without animosity for what others by their achievements receive in their take home pays.

The Ladder works further to maintain a balanced salon structure, as there becomes an understanding that to be promoted into a higher experience level or pricing point, a team member not only is first required to prove their all round consistent performance across measurable targets such as, service takings, retail takings, column productivity, recommendations, rebooking and retention - at the level they want to move into, but that they will also have a responsibly to assist in training up a team member below them in the structure in order that their current position is replaced. This means your team must be motivated to learn the expectations of their higher roles and keenly interested in nurturing their less experience colleges. So positional training requirements in salon start to take care of itself too.

We have seen this system to be the best model for retaining excellent all-round professionals, who are in tune with both what it takes to provide great service and also what makes a sustainable growing business tick, as it provides a base level of security, multiple avenues to earn additional monthly bonus, a road map for their careers - from apprentice to your next business partner in another site?, a format to receive high standards of training, while also being able to give back to the next up and coming... why would an employee risk going to work anywhere else?

The Salon Progress Ladder is just the backbone of an entire body of parts that we recommend having in place to ensure a truly outstanding salon operations model, which include documenting your standards in a Team Member Handbook, Customer Service Module and Training and Operations module. We complete this salon manual with your health and safety guidelines, position descriptions and a suite of easy-use internal salon forms and checklists that make it all stick together.

More information at http://www.nexusrevolution.co.uk

A client emailed to say they're leaving for a cheaper, closer salon

We all realise clients will come and go, opt in and opt out, try other's deals, yet perhaps return for an experience they trust and prefer. Some clients get to love the personal approach to client-stylist/therapist relationships which are nurtured at particularly friendly salons and stay loyal for years, but its still a business relationship unless they cross into your own circle of personal friendships.

There should be no hard feelings where someone has made a choice on price and convenience, especially when they have taken the time and effort to let you know. That in itself shows some respect towards the professional relationship so far shared. It also provides you an opportunity to evaluate if its worth extending this individual an opportunity to continue frequenting your salon as a 'destination salon' - one that a client will go the extra mile to, because the salon experience / value goes the extra mile.

The more experience you have as a stylist and the more senior position you hold in a salon, the more you should be evaluating 'what kind of client' do I want to keep as my loyal ones? You've only so many clients you can do in a day, so if your running a full column its ridiculous to be discounting your work. If your not running a full column, then there's an argument that if you're going to be sitting/standing around anyway, you have room to entice new clients in with an offer anyway.

Just don't do it by discounting your core service. Never let the perceived value of your bread and butter service, be cheapened by directly discounting it. Always look to what you can 'value add' with your most popular service. Use this same rule to reward your loyal returning clients. Use the relationship you build with them (your client consultations, you should all be doing - yes even with existing clients) to work out a service plan / package that really provides value to their individual service needs and witness how committed they will be to it.

The client who emailed you is rare, they have taken to time to explain that regrettably, they have had to weigh up cost and distance in deciding which salon can best meet there needs on balance. Your evaluation of the 'life worth' of a client; (You can calculate by the value of what you could expect them to spend with you in a year, times however many years you expect to be providing services to them if each of you doesn't move away) Tip: Just use 1 year for simplicity - can help you determine how much of that you can profitably value add too, to still have them come the 'extra mile' to you.

Don't forget to factor for some client referral 'love' too, because your keeping another happy client who naturally will be spreading word of mouth about you, not your competitor.

The important thing to reminder is, whether this client returns or not, whats your overall picture look like? You must have the measure of this, so you can constantly measure and evaluate, just like this client has done and every other client / potential client is too.

That's what Nexus Revolution http://www.nexusrevolution.co.uk help salons do best.

salon management support.mov

Salon Spa Team Motivation & Performance

Our salon client teams generally look forward to their quarterly reviews as this official check on their past performance and ongoing training needs, could mean promotion time!

We encourage salon owners to set motivating, fair and achievable targets across all measurable areas within a team members influence. This inspires and creates all rounded professionals who are conscious of what power they have in themselves to effect positive change in all the vital KPI's when serving the salon's clientele.

In addition, we understand that earning more take home cash is not the single motivating factor of every team member.

Rewards can come in the form of:
* Salon Service Perks

* Salon Product Perks

* Family Member Perks

* Recognition

* Flexibility in Shifts or even bonus days off

* Lifestyle prizes or vouchers

* Training opportunities - including part paid / full paid

* Industry Award opportunities

* Industry and Salon Events

* 100% Fighting Fit Bonus

* Extra long service perks

For more on the topics discussed here, see our Salon Progress Ladder,http://www.nexusrevolution.co.uk/I-Need/More-Profit.aspx Team Quarterly Reviewshttp://www.nexusrevolution.co.uk/I-Need/Salon-Team.aspx & Team Member Handbooks which document all this http://www.nexusrevolution.co.uk/I-Need/Less-Headache.aspx

Measure Your Money Benchmark Review

Keeping Clients vs Attracting Clients

"Business is like a bath, you need to put in the plug before you turn the taps on"


All too often I come across salons who are trying to look for new clients as the answer to keeping their businesses going.

It's true that you need a constant stream of new clients into a salon, depending on your current productivity or available bookings and current level of client retention we recommend at least 25% of your clients should be new.

However, it's your regular clients that form the basis of your business and make you the money so make sure your standards of service are high and that each client wants to return again and again.

But how do you "make sure your standards of service are high"?

It starts with deciding what you want your standards to be and defining them in detail. Then its about getting the basics right and ensuring you consistently deliver the same standards.

Its also about how well your team can build rapport with clients, how well they listen to the clients needs, ask great questions during the consultation and how knowledgeable they are about the service, products and details about the client and their buying habits.

Then it's the little touches that make the experience special, but these will only work if they are overlaid on the foundations of quality service.

This is what the saying "attention to detail" means in reality and that's what we help salons achieve.

Lay the foundations for great service and visit us at http://www.nexusrevolution.co.uk

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Ryan Fox

Know any Senior staff with bad attitudes?

Presenting a bad attitude may be good if you are Lady Gaga, in fact it can enhance your reputation andfollowing if you are talented and famous. However only thinking that the world revolves around you in a salon is not good for team spirit and for the Salon as a whole.


Who runs your staff room? There is sometimes an unofficial leader who is often a senior stylist who may be well established. They may say yes to your face but take every opportunity to undermine you when your back is turned. When you try and introduce new things they often try their hardest to undo the good work you have done.


These characters live on their past reputation and salon experience but often do not want to progress. They will negotiate the best deal for them and then sit on it, not contributing or offering anything back in return. They will only do their set hours and use attack as their best defence if you question anything.


They will talk a good game and appear as everyone's friend in public as life is a show, but do they actually get much done. Quite often they appear busy but when you look at their figures they are not that effective.


When you take everything into account such as paying them a high basic, low productivity, me me me attitude, undoing your good work and their unwillingness to progress you have to question if you should keep them in the job.


If you have tried so many times it's driving you mad, sometimes you have to stand tough and let them go for the good of everyone.


Introducing a Performance Management System is a good way to develop an open environment where team member loyalty, performance and great customer care are all rewarded in a fair way. It gives a true picture of what's going on and stops Stylists being able to hide behind their old reputation.


It lets people know where they stand, what the boundaries are and what they have to do to get on. You will find that good stylists will thrive and bad ones will move on.


For more information about how we help salons introduce a Performance Management System visit http://www.nexusrevolution.co.uk

Is your salon setup to make a Million?

One of the salon business tools Nexus Revolution use to take the guess work out of your salon's potential to profit is our Salon Calculator.

The Salon Calculator works out:

1. How many active clients you need on your database to produce your desired income.
2. How many of these need to visit each hour for your team's column productivity
3. How many Full/Part Time team members you need to service these clients based on your opening hours
4. What your return on income is after basic wages for your length of trading hours

Take a look at the results of this sample case study; to see what the salon would need to do to make a £1,000,000 turnover.

Salon 1 – Has 10 cutting stations. Opens 5 days, for 8 hours a day. 60 minute appointment times are allocated to deliver a £45 cut and finish. The team average being booked out 80% of their available time. (This means there is 96 minutes unallocated in each column to schedule rest breaks throughout the day without reducing productivity further.)  On average the active clients in the salon database return every 8 and 2/3 weeks, which is 6 visits a year (52 weeks ÷ 8.67 weeks between visits = 6 visits a year). Full Time team members are employed 8 hours a day, 5 days a week for 46.4 weeks a year to allow for 5.6 weeks paid annual leave. The average pay rate for the members doing the £45 cut and finish is £8.00 per hour.

1. To turnover £1,000,000 based on £45 cuts across an active clientele returning an average 6 times a year, the salon would need at least 3704 clients such as these.
2. However at £45 for every 60 minute appointment slot the salon would need to see 14 clients in salon per hour. Unfortunately this salon only has 10 cutting stations. (Even if the team worked at 100% productivity the whole year, the salon would still need to see 11 clients each hour!) 10 stations limit the salon to £748,000pa based on this most performed service at the current price, duration and total trading hours.

So what is the best thing to do assuming the salon itself can’t be made to fit the 4 additional stations required?

OPTION A – Increase service price?
OPTION B – Decrease service time?
OPTION C – Increase trading hours?

If the salon changed nothing and reached its current revenue ceiling of £748,800 it would need to employ at least 10 Full Time and 1 & 1/8th Part Time qualified members costing £166,400 in basic wages before bonuses. Income after wages will not exceed £582,400.


Option B – Decrease service time in this example returned the most income but must be weighed against the extra pressure on staff to run to time without reducing the quality or service experience of the client.

Reducing service times is not always an option. Had the service most performed be a 45 minute massage service that occupies a treatment room with a 60 minute appointment slot, we cannot expect to service more than 1 client per hour in this work space. In which case Option A – Increase prices should be considered before opening longer and significantly increase your wage bill.

Whilst on the topic on service times, it is worth noting that increasing the popularity of profitably priced 30 minute services will have the effect of halving the number of team members required. For example in the above example, £45 cuts completed in 30 minutes, would require only 4 Full Time and 3/8ths Part Time qualified members (that is a casual employed 3 hours for every 8 hours trading) grossing £1,048,320 at a basic wage cost of £66,560 to return £981,760 after wages.

A Nexus Revolution Salon Setup Benchmark Review would also input your other cost centers of Rent, Stock, Operations, Marketing etc to forecast your profit potential. Follow the link below to arrange a no obligation consultation.

© 2011 Wayne Kranz & Nexus Revolution Trust http://www.nexusrevolution.co.uk