With Alicia Soulier, Founder Salon Scale
The changing economy, inflation, and talks of an oncoming recession mean taking a long hard look at your business and recognizing areas for growth and opportunity. It is no secret that even small dollar amounts can cause big expenses over time in salons. One of the most overlooked and easiest places to make change is located right at the heart of your business- the backbar.
Here are a few tried and true tips to manage your backbar costs.
Turn your open bar into a fixed one.
We all know the drill- you go to an event and drinks are on the house. Everyone is having a great time and 99% of the party-goers aren’t giving a second thought to the $13 cocktail that they just ordered at the bar. Only the 1%, the person whose credit card is burning a hole in their pocket, is giving any thought to what the final tab will be.
Meanwhile, at your salon, stylists are pouring color freely, and at a cost of 3x more per ounce than alcohol, money is leaving the backbar without a second thought. Whether it is walking out the door on the heads of guests, (or worse) getting washed down the drain, every day in your salon you are the one with a credit card in hand- picking up the never-ending tab.
How do you change this? You turn your open bar into a fixed one. By tracking the cost of each color service, you not only know the exact amount of money leaving your color bar, but you can turn your backbar into a profit center by passing this cost to your customer.
Ensure profitability in every transaction.
By passing the color and product cost to your customer at each session, you can create profitability in every transaction. Although this sounds scary, consumers are very used to this behavior. They recognize that it costs more to add a new faucet to their plumbing appointment, to add guacamole to their favorite burrito bowl, or even to add toppings to their go-to sundae order.
Why is this important? We live in a trend-based business, and where there are trends there is variability. We do not have predictable outcomes, so sharing the variability cost of this allows our businesses to have more predictable cash flows and never have things leaving your backbar unpaid. By being transparent, your team, your customers, and yourself will all feel confident in the new revenue stream impacting your business.
Recognize the power of transparency.
Transparency is the newest currency in building trust, and trust is needed now more than ever. Whether in conversation on pricing with your customers, or the reasons why you need to make change with your staff, opening up and sharing the “why” behind your decisions allows you to have the support you need to make critical decisions in your business.
Not only does transparency benefit communications, but it also helps to showcase that it is everyone’s responsibility to support the daily operations of your business, including things like inventory. If everyone is pitching in and operating within the same backbar management systems that lead to data-driven inventory decisions, there is a sense of camaraderie and belonging that naturally will happen. As soon as ownership is shared, there is kindness in our communication as we become more clear (shout out to our girl Brene Brown).
I get it. But how?
The best way to cover product expenses is to know the exact cost of the product used – that’s the foundation of your business. SalonScale will help you control the cost of goods sold at the backbar, and leverage that data to run a transparent and more profitable salon.Let’s create a transparent pricing strategy where everyone wins – customers win, you win and your salon wins.