Managing your hair salon budget is key to running a successful business, so you want to know you’re making the most of it. If you feel your budget isn’t taking you as far as it should, it’s time to reassess with these three tips.
1. Know Your Numbers
You can only maximize your salon budget when you understand it. Start the process by getting to know your numbers. How much do you spend on supplies monthly across all locations? What’s your monthly revenue from all branches? Do they vary greatly? These numbers are key to making the most of your budget.
Every hair salon has its own cost to run based on factors like location and how many clients each location serves, so your goal should be a percentage. The general rule of thumb is that no more than 15% of your revenue should go toward supplies at each location. You can calculate this by dividing the monthly cost of supplies by your monthly revenue.
Is your percentage higher than 15%? That means it’s time to find ways to improve inventory management. For example, you might reduce units of a product you don’t use often. Inventory management software makes it easy to track product usage and find ways to save. Another way to improve product usage is to make sure you’re using the recommended amount for every use. You might be surprised by how often you overuse products like shampoos, conditioners, and leave-in creams.
2. Check Your Rent
Like supply costs, your rent should stay within a recommended percentage — around 12% of your revenue. If your rent is well above that percentage, finding a new location or negotiating with your property manager could make a huge difference in your salon budget. You might find that your salon’s rent is a great rate when you start, but price hikes can make it unsustainable.
Your rent is a single expense, and it’s a significant one — a single change can have a major impact. Securing a lower rent can help you maximize your hair salon’s profit and prepare you for unexpected losses.
3. Revisit Vendor Contracts
You likely work with a handful of suppliers for inventory, utilities, and operational requirements like insurance. The good news? These contracts are negotiable. Negotiation is most often on the table for vendor relationships that you’ve had for a long time. Nurturing these relationships can help you get better rates, especially when you showcase how your success supports theirs.
It’s smart to do some industry research on supplies to ensure you know how prices typically look. If you find you’re paying more than you should, your research can be evidence for your negotiation. When a vendor is unwilling to compromise, it’s time to find a new one who can offer a better price.
Maximize Your Salon Budget With Meevo
Meevo helps you manage the business side of beauty and wellness with a range of features designed for business operations, client management, and marketing. Features like resource management, goal setting, and reporting enable you to track your salon’s vitals from anywhere and make adjustments when needed. With Meevo, you can maximize your budget and take your salon to the next level. Get a consultation today to learn more!
