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Old 12-10-2013, 01:43 PM   #1 (permalink)
 
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What to add to my salon?

I need some advise!

I'd like to diversify to help me get through the summer months.
We are on the same road as a University, maybe 1/2 mile away.
I bought my salon February 2013. It has 12 rooms with mostly tanning bed/booths in it.

Currently we have;
#2 level 2 beds
#3 level 3 beds
#1 level 3 booth
#1 level 4 booth
#1 level 4 bed
#1 HydroMassage
#1 Hydration Station
Air Brushing and waxing use one room
That leaves me with one empty room.

Some ideas I've had;
Eyelash extensions
Body Wraps (but which one?)
Oxygen Station (I could put that in the lobby and save the room)

I appreciate any and all advise!
Thank you
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Old 12-10-2013, 02:34 PM   #2 (permalink)
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Re: What to add to my salon?

(1) Switch to an automated booth, you are in Idaho
-Promote the sunless, we are slammed all summer and even last Friday we were at 100% capacity
(2) Start a solid EFT program

Body wraps do great in salons if priced correctly and promoted; IMO, I would focus on the spray tanning & EFTs first.
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Old 12-12-2013, 12:00 PM   #3 (permalink)
 
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Re: What to add to my salon?

Thanks!

I do have custom airbrushing here, but rare is there an appointment for it.
Too, I do have an EFT program, about 105 members now!

Do you think I should switch from having someone do the airbrushing and to to a booth instead? That's one huge investment. But if its a better way to go and you guys that have been in this industry longer than I have feel its better..........well I'll definitely set money aside for it!
I wonder if my advertisement is lacking.
We have 4 coupons in the University coupon book.
Post daily ads onto Facebook and our website.
I have visited the surrounding businesses and invited the teams to visit for free and left cards.
Our clients are given incentives to bring their friends in.
And occasionally take flyers out.

Which body wrap do you think is better?
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Old 12-12-2013, 12:51 PM   #4 (permalink)
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Re: What to add to my salon?

Wrap - Formostar

Spray – A gun will limit you in a conservative area, booths IMO are a better route, but choose wisely. If you are a gun now, do not get rid of it, but focus on booth and offer custom tans for 50%-100% more (base price).

Ads - Do you track your ROI? If not, set up a spreadsheet to help you gauge the campaigns then test and tweak.

EFT - Do you just offer it, or is your salon structured around it?

Benchmarks - Do you have standards/goals for each service and level and do you test/tweak monthly to achieve higher numbers?

Time Inventory - Do you have enough, too much? IE: Are you efficient?

Gross margins - Are all your services producing the margins you need to cover overhead at the current rate of clients you see?

Base price - Is it high enough to allow for discounts and specials while still retaining your needed margins?

Do a $/minute analysis of your levels and find the weakest level. Remove that level from your line up (or address the issue) and adjust prices and if necessary increase throughput on your more profitable levels with efficiencies (or) adding more units in (add units last, only if needed)
[Make sure to use your avg. price per tan, not your base price for most metrics you track & in most cases use net profit, not gross sales]

Example:

Level 2 (net profit is $3 for a 20 min session) $.15/min
Level 3 (net profit is $4 for a 15 min session) $.27/min
Level 4 (net profit is $7 for a 12 min session) $.58/min

From this example; you would have to do almost 4x the tans on level 2 to equal the profit from (1) level 4 tan.

This exercise will also help you identify inconsistencies in your pricing as well. You may find services are priced too low or even too high.
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Old 12-12-2013, 01:05 PM   #5 (permalink)
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Re: What to add to my salon?

FYI, when I calculate the session cost (direct cost of production) of a spray tan; I include:

Hairnet
Any crèmes or gels used
Solution used
Towel and tool depreciation
Body stickers
Candy/mints
Cleaning solution

So if the average $/tan for that service is $18.56 and the cost of production is $1.50, then my net profit per service is $17.06

If you were tracking direct costs of a UV bed, you would also add in electricity use.

Many ways to track and it is all contentious; but one point that cannot be argued is: “You cannot smack what you do not track”.
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Old 12-12-2013, 01:30 PM   #6 (permalink)
 
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Re: What to add to my salon?

House of Tan.......this is the most useful information I have EVER received in this industry!

With this outline I can start "tracking and smacking" immediately!

Thank you very very much!
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Old 12-12-2013, 03:38 PM   #7 (permalink)
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Re: What to add to my salon?

3 things to constantly try to improve:

Inventory Reduction – You are in the business of manufacturing tans, not housing people in a lobby, nor housing un-used beds in a structure. Balance your inventory and try to achieve 100% capacity, 100 percent of the time; you will never achieve that, but strive for it.

Gross margins – Always try to reduce costs and increase $/tan (many methods, but this is the end-goal)

Throughput – The velocity of the process and essentially how much you can push out in any given parameter of time you wish to benchmark. Such as: Tans/hour or Tans/day…

My biggest tip: Play with your pricing, never be satisfied; always question.

For example a bed level could have to high of a $/tan average. Sure ridiculous margins are great; however this would also limit volume. Do not modify the base price*; rather, restructure the plans to offer better discounts. Keep the value in the tan by not budging on price; instead drive up tans/month and $/month by moving more people to memberships & packages.

The key is not only in the $/tan, but continuous yearly revenue; there are many ways to achieve higher Yearly numbers, IMO the best is to focus on PPYA and drive that with EFTs.

*Unless it’s way out of whack with the rest of your line-up.
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Old 12-12-2013, 03:42 PM   #8 (permalink)
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Re: What to add to my salon?

One last thing, take a look at this thread by Sunsally.

I like the way she segments the beds, this will give you a better grasp of "levels" and some ideas on equipment if you decide to update your line-up.

QUALITY reconditioned used beds
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Old 12-12-2013, 04:03 PM   #9 (permalink)
 
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Re: What to add to my salon?

When I first bought the place I called around to see what everyone is charging, then undercut that a bit for this first year to entice clients to come.
Groupon has helped a lot too.
Looking at the salons prior owners past numbers, I am beating their revenue, new clients in the door and foot traffic every month for the last 3.5 years. I have only been in the red twice my first year, July and August.
I have A LOT to learn and want to grow. I am very excited to pen to paper and use all the tools you gave me!!

I have a room not being used that has a 30 min. bed in it, that works, it came with the salon when I bought it this passed February, but I don't want to get clients used to it since they will be outlawed soon.

That's why I was wondering about the body wraps, to diversify (July/August support). Formorstar is a big investment that I don't want to make unless some success in the industry has been seen. By your notes, I think I might go a head and move on it. ...after tax time. :)
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Old 12-12-2013, 05:14 PM   #10 (permalink)
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Re: What to add to my salon?

Numbers are your friend; data-driven decisions should always guide your path.

Wraps must be thought of as a department in your salon, not just an add-on. There is cross promotion, but it is a different client to cater to in both how you market and how you take care of them in-house. When I did wraps, I had 2 Formostars (the original German units). We did $3.5k-$8k a month and while it looks like pure profit, you will go through some stuff and you will need to set up a "pad replacement" fund. ;)

Wraps take some serious staff time (labor hours) to operate; keep that in-mind. When figuring direct costs for this service, I also included labor since it was more of a spa service and required what I considered to be significant use of labor resources.

One thing to consider; time.

The wraps are going to consume your most important asset, time; especially when you are first introducing them. Personally if I were not running at maximum efficiency with my core business (tanning), I would focus on that first. Peak season is here or near; make that tanning money while you can, when it slows down in fall, then add wraps. My 2 cents
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