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.