I’m often asked this question by salon and spa owners, ‘How can I increase my revenue (turnover)?’ In fact, if staying in business and taking home a decent personal wage are the goals, the question should actually be ‘How can I make more profit in my business without working any harder than I already do?’ 

Almost every salon or spa owner I’ve met is already a very hard worker who puts in longer hours than nearly all their employees. They’re often the first in to open the doors each day and the ones left to lock up each night.

If this sounds a lot like you, then working harder is not something you should have to do, however working smarter certainly is!

Taking time out of the everyday grind to work on business growth strategies is an activity some salon owners are not that comfortable with.

After all, if they’re working on their business, they have to pay someone else to care for the clients, and that is often a frightening prospect on many levels.

But the truth is that working productively on your business by developing your marketing ideas, planning staff training sessions, investigating new service options, or developing a more streamlined roster, amongst many other things, can actually be the best use of your time.

Yes, you may earn an additional $50 by providing that client service yourself but a well thought out marketing strategy might bring you an additional $5000 instead. It’s really all about using your existing working hours more effectively.

If you’re in the rut of working too many hours in your business rather than spending some quality time working on your business, then read on to discover effective ways to break the cycle of chasing revenue instead of making a profit.

Remember, revenue is just the money that goes into your register and this figure means very little at the end of the day, especially if every dollar is consumed by expenses.

Instead, you need to focus your efforts on is how to keep as big a portion of your revenue as possible, because this becomes your profit (and the only thing that really matters in the long run).

Here are 5 profit-generating strategies that you should implement into your beauty business asap.


Strategy #1 – Start making a profit from your salon services.

This is a no-compromise strategy. Every service you provide must make you some profit, and to ensure this you must first know what each service costs you to provide. Guessing is not good enough.

Forget about what the salon down the road is charging or what your suppliers tell you is the ‘normal average selling price’. These figures are meaningless to your business.

The salon down the road may be slowly going broke because of the way they do business and the supplier has absolutely no idea about what your unique expenses actually are.

So, the only person who can work out a profitable selling price for your services in your business is you.

Consider the labour cost, the product cost and the consumable cost to work out a service cost price. Then, before you decide on a selling price, remember that you also have to cover every other expense your business generates also (rent, utilities, marketing, etc.), and only then can you set a selling price that will ensure you make a profit.


Strategy #2 – Start charging what you’re worth.

Stop attracting those cheap-skate, discount-seeking clients who will never make you a penny in profit. You know the ones I mean. They’re the clients who only materialise when you’re selling something with a discount attached to it.

In business, as in life, we get what we aim for. If you want to attract more profitable clients, stop making every marketing offer into a discount-fest. Find better ways to position yourself by offering value to your clients instead of discounts.

If you’re offering professional services in a professional environment, then you deserve to ask a professional price for them. It’s important that you don’t undervalue yourself if you don’t want your clients to undervalue you.


Strategy #3 – Reduce your salon wages expense.

One of the biggest expenses in any beauty business is undoubtedly the wages. Now, while you definitely need staff to deliver the services to your clients as your business grows, what you don’t need is them standing around for hours on end making cuppas, chatting and dusting the product shelves for the 6th time that week.

So, what should you do if this is happening in your salon? The answer is ‘measure and monitor’. Understanding the productivity of each team member is vital so you can determine how many hours you need them to work on your roster. Things you must monitor as a minimum are:
 How many dollars per client they generate,
 How many dollars per week they generate,
 How many clients per week they service,
 How much of the revenue they earn is going back out in their wages? (Hint: If it’s more than 35%, you need to find out why.)

You need to understand all these figures for each staff member and then take appropriate action to reduces excess wages where needed by amending your roster.

If you’re not already doing this, I recommend you start straight away.

Minimising unnecessary wages will often make the difference between taking home a pay packet or not for yourself.


Strategy #4 – Make more money from each salon client.

If you can’t get more clients into your business, then you have to make more money from each client. Easy to say, I know, but not that hard to do when you put your mind to it.

The obvious solution is to have a price increase, especially if you’ve been holding off for far too long because you believe your clients might not want to pay a little more.

The fact is you are in business. You are not a charity!

Your clients also know this but the longer you hold off having a much-needed price increase, the more the clients won’t like it when the time comes.

With this in mind, work out your true costs (see Strategy #1) and set a price for your services that will make you a fair profit.

Regular small price increases are less likely to upset your clients’ budgets than a huge price increase once every couple of years.

Another method to lift the average client spend amount is to up-sell additional services.

So many of your clients would happily purchase more if only they were asked to (nicely of course).

Your clients may be missing out on services they’d thoroughly enjoy and benefit from because no-one has told them about a new and improved service, or an add-on service that would complement the service they’ve booked in for.

Here’s a FACT. If you don’t ask you don’t get. Talk to your clients about the services they might be interested in trying and make a goal to upsell to every client.

And what about selling courses of services. This is always a good idea as it not only provides good value for the client (generally with a bonus service included), but you get a lovely chunk of money up-front that keeps the client returning to you over a set period of time.

Courses rock when it comes to making more profit and you should seriously think about how to maximise your sales using them more often.

Finally, how’s your retailing?

Are you monitoring and measuring it?

Do you have some goals in place?

Something that many salon and spa owners don’t know is that retail sales can offer 2-3 times more profit for the time invested than delivering services.

Learn the art of retailing and teach your staff how to retail as well. This one strategy alone will make a huge and positive impact on your profits.

Strategy #5 – Reduce your general salon expenses.

Every dollar you outlay on unnecessary expenses is a dollar out of your profit (that means less in your holiday fund).

If you haven’t looked at the reports your accountant sends you each year, take a big gulp of something to calm your nerves and go find your last expenses report (I promise you will live through this experience, although you may come away feeling a little traumatised and in need a little nap to fully recover).

Now you have that report in hand, read through your expenses list.

What jumps out at you?

What appears to be way higher than you thought it would be?

Are these expenses ones you can do something about?

Some expenses are a necessity and impossible to budge but others can be culled or reduced without any ill effects to your business.

What expenses are a good investment (like quality coaching and training) and which ones should be minimised?

You’re bound to discover you’re spending way too much money in some areas, and this knowledge will allow you to reduce some of your expenses and therefore increase your profits.


And there we have it. 5 simple but effective strategies that will put more profits into your pocket without working any harder or longer. Be brave and do what’s needed so that you can enjoy your business knowing there’s a payday for you at the end of the week also.