When the holiday rush comes to an end, it’s time to close out your books for the year and prepare for taxes. It’s also the perfect opportunity to run vital reports and review your numbers to see how your business compares to last year and the goals you set for this year.
Why Reports are Important
- Strategic Decision-Making: Data from your salon reports helps you make informed decisions about pricing, marketing, staffing, and service offerings.
- Business Growth: Understanding key performance indicators (KPIs), such as client retention and average spend, enables you to develop effective growth strategies.
- Operational Efficiency: Reports on appointments and inventory can help you optimize daily operations and reduce waste.
- Business Health: Financial and sales reports provide a clear picture of your salon’s profitability, allowing for better financial planning.
Tax Preparation Reports
These reports are essential for accurately filing your taxes:
- Payroll Reports: If you have employees, you will need year-end reports for payroll taxes. These reports offer an itemized breakdown of each employee’s wages, deductions, tips, and other compensation, which you or your accountant will use to prepare W-2 forms. Payroll reports ensure accurate and compliant payroll tax reporting to both employees and the IRS.
- Expense Report: A comprehensive report of all your outgoing expenses. You’ll want to output a list from your accounting software of categorized expenses for the year, including rent, utilities, supplies, marketing, licenses, insurance, professional fees, etc. This report is crucial for calculating deductible business expenses, which can help lower your taxable income.
Key Performance Indicators (KPIs): The Story Behind the Numbers
To gain valuable insights into your revenue, run and analyze the following reports:
- Sales Report: A detailed sales report is crucial for diving into your total revenue. You want a breakdown of sales by service, retail products, and staff member that reveals which services and products are most popular and identifies your top-performing employees. A sales report can also track total tips, taxes paid, and refunds processed.
- Services Report: This report describes the total services completed by location during a designated time period. This report can be filtered by all employees or by a specific employee, all services or a specific service, and all departments or a specific department. If you want to dive deeper, you can review the services performed, the number of clients who received each service, the total revenue, as well as other fees and taxes associated with the service.
- Retail Report: This report is ideal for calculating the total retail sales by location during a designated time period. The Retail report can be filtered by supplier, brand, employee, department, category, or sub-category. You can also review the sold products, including unit costs, quantities, and other relevant details.
- Retail to Service Analysis: A Retail to Service report helps assess overall business health by measuring retail sales against service revenue, providing insights into profitability, and identifying areas for improvement. This report helps track employee performance, boost client retention, and inform decisions about inventory, marketing, and overall strategy.
- Year-over-year Comparison: Identify seasonal trends, measure the impact of promotions, and make confident decisions based on comparison data. This report is perfect for goal setting, team reviews, and planning your next year.
- Revenue Per Square Foot: Calculated by dividing total sales by square footage, the Revenue Per Square Foot metric shows how efficiently your space generates revenue. Compare your revenue per square foot to rent costs and use industry benchmarks to assess performance and identify improvement areas. This metric also aids in negotiating lease terms with your landlord.
Client Engagement and Revenue: Boost Your Salon’s Success
To discover how well you’re connecting with your clients and maximizing revenue, run the following reports and review your metrics:
- Client Retention: The Client Retention report provides insights into how well the salon retains clients over time. By analyzing retention metrics, you can identify trends, understand client loyalty, and make informed decisions to improve customer satisfaction.
- New Clients: The New Clients report allows salons to enhance the overall client experience, ensuring that new clients feel welcomed. The report provides a comprehensive list of new clients to your salon, categorized by location, date range, specific provider, or all employees. The report includes the client name, date booked, appointment date, provider, referral information, and more.
- Average Ticket Price: Calculate your average revenue per transaction to understand the value of your services and implement strategies to increase the average ticket size, thereby improving overall profit margins.
- Retail Sales per Client: Encouraging retail sales can significantly boost your income. Use this report to track the number of retail products each client buys and identify trends in customer preferences over time, allowing you to adjust your offerings accordingly.
Employee Performance: Your Team’s Impact Matters
Your stylists and support staff are the backbone of your success. Here’s how to measure their contributions.
- Employee Sales: The Employee Sales report depicts all services, tips, and retail by employee, which can be filtered by location and date range.
- Retention: The Retention report presents various retention metrics and can be filtered by location and date range. This report can also be filtered by new clients or existing clients, and all employees or a specific employee.
- Future Booked: The Future Booked report can be filtered by location or date range and depicts the total number of future appointments booked by House or a specific employee. This report also shows the requests and prebooked percentages, as well as service totals by category. Track the number of clients who book their next appointment before leaving the salon.
Turn Your Data into Action: Your Roadmap Forward
Now that you’ve gathered data, it’s time to review and strategize:
- Reflect on Your Goals: Compare this year’s performance with the goals set at last year’s end. What wins can you celebrate? What improvements need to happen?
- Celebrate Successes: Recognize outstanding employees and celebrate your achievements to build morale and set the tone for continued success.
- Set New Goals: Set fresh goals for the upcoming year.
- Plan Your Future: Tailor your retail strategy, marketing plans, and staff training to your insights, ensuring a confident start to the new year.
As you wrap up the year, remember that reports aren’t just numbers and metrics; they’re a powerful tool to steer your salon toward an even more successful year ahead!
Here’s a helpful guide to crafting a cancellation policy for your salon:
Craft your cancellation policy
- Use Friendly Language:
- Emphasize Care: Begin by stating that the policy is designed to respect everyone’s time and provide the best possible service for all clients.
- Set the Tone: Use a conversational tone in your policy. Phrases like “We understand that life happens” or “We appreciate your understanding” can help put clients at ease. Start the policy with a warm greeting and a brief explanation of why the policy is in place, followed by these friendly phrases to soften the message.
- Keep Communication Open: At the end of your policy, provide clients with a means to contact management with any questions or concerns.
- Define Terms: Clearly explain the difference between a cancellation and a no-show.
- Charge Details: Outline the conditions under which a deposit might be forfeited and/or when charges will be applied to a client’s credit card on file.
- Deposit Information: If your salon requires deposits for any or all of your clients, be sure to specify when and why a deposit is necessary, as well as how it will be applied to services.
- Timeline and Fees: Set clear timelines and percentages for charges:
- For no-shows, specify a percentage of the service fee that will be charged.
- For cancellations made less than a designated number of hours in advance, indicate what percentage and any fees for special orders will be charged.
- State the charges for cancellations made well in advance, if applicable.
- Research Legalities: Check local regulations regarding maximum allowable charges for cancellations and no-shows to ensure compliance.
Implement the policy
- Visibility: Post your cancellation policy on your website and share it across social media platforms.
- In-Person Notice: Display the policy in your salon’s reception area.
- Confirmation Communications: Include the policy or a link to it in confirmation emails and on receipts.
- Email Footers: Add a link to the cancellation policy in the footer of all emails and newsletters.
Set up the necessary systems
- Payment Processing: Utilize a payment processing system that provides a card-on-file option and facilitates card-based deposit collection.
- Booking Integration: Implement a paywall to your booking process, both in-salon and online.
- Staff Training: Since your staff will be interacting with clients and enforcing the policy, it’s essential to train them on how to communicate it effectively. Consider providing a standardized script to ensure all staff members are on the same page and can confidently explain the policy to clients.
Enforce the policy
- New Clients: Make agreeing to the policy a standard procedure for all new clients during the scheduling process.
- Existing Clients: Notify all existing clients about the new policy and collect their payment details.
- Maintain Respect: Emphasize to clients that providing deposits or card information is crucial for respecting appointment times, reducing late cancellations, and minimizing no-shows.
By following this structured approach, you can create, implement, and enforce a cancellation policy that benefits your salon while preserving positive relationships with your clients.
