Importance Of Regular Business Reviews
When was the last time you reviewed your business? Be honest, it's only you that knows. Was it a year ago? Two years ago? Was it longer? Have you ever reviewed your business? Did various lockdowns allow you the time to review and re-evaluate your business?
Starting a Business is really exciting and we make the time for planning, organising and researching things in the initial stage. However, when we have established the business we are so busy and consumed with the day to day running, ordering and all the general things going on with our clients that we can forget to take a step back and review how well the business is running, growing and progressing. I think if there was any positive to Covid it was the time it gave us to almost start our businesses again and make changes. But we are a year plus out of any sort of lockdown and I wonder if you are still reviewing your business in the same way?
The thing is, I totally understand, it is really easily done. You wanted the business and there is always something that needs to be done, plus - you need to be active in the business to earn money because essentially you work for free! And I think it is still very raw fo all of us the time we were closed and how grateful we are to be busy again. I just think it can be a little short sighted not to review things regularly because taking some time out here and there to plan and review, whilst doesn't physically earn you money at that particular time, it makes for a healthier and more profitable business in the long run. We can't just fumble along blindly, where will that get us?
I would suggest that you carry out a thorough business review annually, and perhaps even a mini business review bi-annually, just to make sure you are on track. Look at your advertising and marketing, where are your clients coming from, where would you like to attract more clients from? Are your current therapists fully booked? Can you grow the business to accommodate another therapist? Do you have space? Go over your figures, go over targets (if you have them), if you don't have targets consider introducing them, they are the best way to measure your progress.
Now before you start thinking, here she goes again telling me to find time to review my business, this doesn't need a week! It would be good to dedicate a day to it, or if you can't spare a whole day, two half days. Before you start have a list of what you want to achieve by completing the review and plan your time effectively. Turn your phone off and all social media because a moment scrolling through Facebook or Instagram turns in to a lost hour which could have been used more effectively.
Take a look at where your business currently is and remind yourself of your original vision and why you started the business. Looking at where you are now are you still on track? Have you achieved your original goal? Do you need to set a new one? Now that the business is up and running is your goal still the same as the original one you set? Does it need updating or amending? It doesn't matter if your original goal has changed, it's a bit like buying a wedding dress, from a young girl you always have something in mind, the dream dress, and when the day comes that you need to choose one you often try that very dress on and it looks awful, so the style or (in the case of the business) the goal changes.
Go through your accounts and look at everyone's productivity. Take the number of hours in each day and how many days of the week you are open, now look at how much money an hour you need to take collectively to pay the overheads, the wages, your wages and what profit you would like to have left over. Divide that amount by the number of staff you have who earn you money, by that I mean Beauty Therapists, hairdressers etc. Whilst an integral part of the team, a receptionist isn't going to earn you the money a therapist will. Here you now have how much money you need each and every person earn you essentially their target. This is a really interesting thing to do because we get so caught up in being busy that sometimes we don't realise we are just being busy fools.
You may have 3 girls booked out all day doing gel manicures. If they are working seven hours a day each and you are charging £25 per gel polish that's £175 per team member, so a total of £525 across the 3 of them. Now, you may be looking at that amount and thinking, that's amazing! I would love to have 3 girls earning £525 a day for me. But this is the best case scenario isn't it? Everyone busy every day. Let's break it down - a gel manicure costs approximately £5 to carry out in product alone. Some brands are cheaper, some more expensive, so we will take this as an average - ask your supplier to give you exact costs. So immediately we can take £105 from our £525 total, we now have £420. From that we need to take wages which will be at least £10 an hour so that's £210, so now we have £210 left. Out of what is left we need to pay rent, rates, advertising, replace polishes and other accessory products, laundry, insurance, your wage, receptionist wage and the wage of anyone else who perhaps is not busy for some or all of the day. You see how this is going? And this is the best case scenario. What if, of your 3 girls, they are only half full each......that leaves you with nothing.
Of course each day will vary some treatments will be more expensive, some less. Some treatments will cost more to do, some less. This is why you need to work out what you need to take to be successful.
Many salons stumble along never reviewing, not knowing how financially viable the business is and never looking at ways to make he business healthier or grow the business. Whilst they are often around for some years it does end, and not well. All they needed to do was spare one day, maybe two out of 365, a small price to pay for a successful and long standing business.
