Is Your Business Compensation Plan Setup Correctly?

Is Your Business Compensation Plan Setup Correctly?

A gross margin analysis is one of the most reliable and effective ways to determine just how profitable your business really is, regardless of what industry you are in. However, before you can calculate this, you must know exactly what you are paying for labor. Unlike many other industries, there are several options when it comes to compensation in salons or spas.

The following information is designed to help you decide if your business compensation is set up correctly.

Types of Compensations in Spas and Salons

The most common compensation plans include:

  • Independent contractors: In this situation, you contract out a task for the contractor to complete. He or she is responsible for purchasing all products they use, as well as furnishing their own They are typically not offered benefits and do not have any income taxes taken out of their check. At the end of the year, they receive a Form 1099.
  • Booth Rental: While you collect a rental fee from the person each month, they are considered self-employed and are treated as so.
  • Commission: Salon commission rates range from 35 to 60 percent on services rendered [1]. The person is only paid for what they do. You may also pay commission on products sold. Commission rates should be calibrated very carefully to ensure that it is low enough that your business turns a profit, yet high enough to keep an employee from going elsewhere and taking his or her clients with them.
  • Commission plus salary: In addition to receiving a certain amount per hour, the employee will receive a certain percentage (usually between 10 and 25%) of what they do and sell.

Other forms of compensation include paying for ongoing training and education, offering an employee discount program, and providing certain benefits, such as health insurance and paid vacations. Obviously, the type of compensation you would offer will depend on the employee’s status.

Factoring in Incentives and Bonuses

Incentives and bonuses both qualify as forms of compensation, though they do not necessarily come in cash form. Typically, incentives and bonuses focus on improving customer retention rates, meeting profitability, or reaching media recognition targets. For example, you may give out gift cards or pay for the lunch of a salon/ spa employee for bringing 10 new clients into the salon. Another option could be paying for an employee’s gym membership after they have had 20 clients return to the salon/ spa for at least a second treatment. Finally, you could bring in lunch for everyone once the salon/ spa has reached so many likes on Facebook or follows on Instagram. Be creative with what you offer to motivate your staff, while also increasing their loyalty and overall job satisfaction.

Coming up with the Right Setup

Your business compensation plan should be carefully crafted to create a balance between making a healthy profit, keeping your team loyal and motivated, and ensuring you stay competitive in your niche market. Once you have found the right setup, be sure to carefully communicate the incentive and commission-based elements to your staff. You want to be certain they have a complete understanding of how the compensation program works.  Need help getting the right setup?  Contact STAC Bizness Solutions to help you get started.

Looking for a QuickBooks Expert?

Working with a QuickBooks ProAdvisor is the best way to learn how to use QuickBooks to help your business grow and flourish. You won’t find a better way to get the support you need anywhere else.

As a small business owner, we realize that you may not have the budget to hire a QuickBooks expert. If you’re looking for a more economical way to get set up on QuickBooks, we provide cloud bookkeeping programs to match any business requirement. Here are our Quickbooks ServicesQuickBooks SetupQuickBooks Training, and QuickTune-up.

You can feel confident in knowing that our STAC Bizness Solutions team are Certified QuickBooks ProAdvisors. Meet Our Team.

If you would like to learn about all the benefits that STAC offers, just give us a call and we’ll provide you all the details. Call us at (844) 424-9637.

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Setting the Right Price for Your Salon or Spa

Setting the Right Price for Your Salon or Spa

Are you charging the right prices? In the salon and spa industry, calculating how much to charge your clients is not all that simple. After all, it has to be enough to ensure that you are turning a profit, but not so much that potential clients are turned off.

The Importance of Gross Margin Analysis

Whether you are just opening your salon or have an already established business and are thinking about raising the prices, performing a gross margin analysis is the first thing you should do when setting your prices.

Setting Your Prices

Of course, there are several other factors to consider when setting the prices in your spa or salon. They include:

Consider the competition. First, you need to do your research and determine what your competitors are charging, as well as exactly what services they are providing and the quality of their work. After coming up with a price range, you should consider where your experience, skill level, and reputation fall along the spectrum.

Think about the area you are in. If your salon/ spa is located in an upscale area, you’ll be able to offer more upscale treatments. On the other hand, if you are in an area that is home to blue-collar workers and young working families, you will want to focus on more basic treatments that are affordably priced.

Take a good look at your overhead, as well as your labor costs. Your overhead costs consist of any and all costs required to operate your business, including your rent or mortgage, utilities, and ongoing monthly expenses. Your labor costs should be considered separately and apply to any support staff, such as a receptionist or cleaning crew. You’ll want to be sure that your prices will be able to adequately cover your overhead and labor costs, while also leaving you enough room to make a profit.

Be sure that your prices align with your salon/spa’s image. If your prices fall toward the high end of the spectrum, be prepared to justify them. For example, do you offer clients specialty coffees or teas while they wait? Are you using high-end products?

Increasing Your Prices

If you are raising your current prices, there are a few additional things you should consider. They include:

Consider how much you will be increasing your rates. It is important not to raise your rates by such as great amount that it scares customers off. To give you some perspective, the industry standard for price increases in the salon is around 10 to 20% [1].

Choose the right time. Raising your prices should align with a rise in your costs of goods and shouldn’t occur more than twice a year.

Give your current clients plenty of notice. You will want to give your clients time to adjust, which is why you should make them aware of an upcoming rise in prices at least six weeks in advance. If you are client’s are happy with your service, your clients should be able to justify a moderate price increase to themselves.

Owning your salon or spa can be very rewarding, both mentally and financially, if you set your prices right.  Not sure what is the right price? Not a problem.  Contact STAC Bizness Solutions and we will help you get started.

Looking for a QuickBooks Expert?

Working with a QuickBooks ProAdvisor is the best way to learn how to use QuickBooks to help your business grow and flourish. You won’t find a better way to get the support you need anywhere else.

As a small business owner, we realize that you may not have the budget to hire a QuickBooks expert. If you’re looking for a more economical way to get set up on QuickBooks, we provide cloud bookkeeping programs to match any business requirement. Here are our Quickbooks ServicesQuickBooks SetupQuickBooks Training, and QuickTune-up.

You can feel confident in knowing that our STAC Bizness Solutions team are Certified QuickBooks ProAdvisors. Meet Our Team.

If you would like to learn about all the benefits that STAC offers, just give us a call and we’ll provide you all the details. Call us at (844) 424-9637.

Hire a QuickBooks ProAdvisor

To schedule an initial consultation with us, please click the button below.

Gift Cards

How To Generate More Sales

The National Gift Card annual 2017 Gift Card Data states plastic gift card redemption doesn’t appear to be going away anytime soon.

2017 SEVA BEAUTY CONFERENCE

2017 SEVA BEAUTY CONFERENCE

As a small business consultant, I consider it part of my responsibility to stay abreast with the industries that I advise. This means learning the latest technology that our clients might need as well as the most recent issues that they are facing.

This year has been no different than other years. I attended the same training sessions and conferences necessary to keep me up-to-date with the constant changes in business laws and regulations; bookkeeping and payroll processes; new apps; QuickBooks updates; and accounting operations. As one can imagine, it is a constant curve of upward learning, but this knowledge is absolutely integral for all of our clients. It is important that we are on the same page when it comes to industry standards. They might not have time to keep up-to-date with the latest in their field, so this is where a small business consultant comes in.

My goal is to provide insightful advice which enables my clients to make informed financial decisions. That is why in addition to attending conferences for my profession, I also like to attend industry specific conferences. These conferences help me gain more particular insight into new products, skills, and potential issues our clients may be dealing with in their industry. There is nothing like understanding the industries in detail. A generalized approach would not give me the industry-specific know how to have personalized plans to help each of our clients with their business solutions.

This month I attended the 2017 Seva Beauty Conference. Talking with our clients face-to-face was amazing. I was able to speak with several salon owners and learn about what is working for them and what they are struggling with concerning growth. I enjoyed this rich qualitative data that I can now use as valuable lessons and share with my clients.

It was also nice to learn about the new products, services, and techniques. When our clients have questions for me regarding their operations, I will not have to waste time asking them to explain the basics of what certain processes are. Of course, each business is a unique entity, so I welcome dialogue with them that is not only clarifying, but also necessary to ensure that I understand exactly what a particular term means to their business.

I was glad to network with not only the franchise owners but also with the other franchise suppliers. Connecting with suppliers allows my firm to discuss potential partnerships to streamline processes for our clients further. This part of networking is essential as there is no use having another framework in place when customers cannot get their hands on products that are in demand in the salons.

The training sessions for this conference were particularly insightful and informative. Some of the sessions helped us gain further insight into the human resource issues with running a salon. We can then come up with some ideas for solutions that STAC Bizness Solutions can assist with going forward.

All in all, I had a particularly productive year of conferences and training. I look forward to passing this knowledge directly onto my clients through innovative solutions and technological advances.

Here are some of our pictures of the SEVA Beauty Conference.  A special “Thank You” to our current clients.

Want to hear more about what I learned?  Contact me today to discuss your personal salon or spa needs.

 

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To schedule an initial consultation with us, please click the button below.

Decision-Ready Financial Reporting for Your Salon

Decision-Ready Financial Reporting for Your Salon

Decision-Ready Financial Reporting for Your Salon or Spa

Financial reporting is a crucial element for any business as it helps in making decisions. Reports such as Profit and Loss, Balance Sheet, and Cash Flow Statements are helpful with the growth analysis of small businesses, but they are typically prepared monthly.  So let’s look into how this helps with making intelligent business decisions this month?

When your virtual bookkeeper sends your business customized, decision-ready, financial reports for your Salon & Spa at your fingertips it can help your business become more profitable.  Here are five areas where STAC Bizness Solutions can assist with your business growth:

1. Providing Gross Margin Analysis

Gross margin is an indicator of a company’s financial health. It will tell you how much profit the company is earning before operating expenses.  Here is a question to ask yourself.  Are your margins lower than the industry average? Here at STAC Bizness Solutions, we have extensive knowledge in the salon and spa industry and can provide gross margin insights.

2. Establishing Key Performance Indicators

Key Performance Indicators (KPIs) measures how effectively a business is reaching their targets. Successful salons and spas set their goals within a given period and monitor them each week.

Would you like to increase your new clients or increase the number of retail product sales? Our services provide you with customized reports for salons and spa to track the KPIs required for your business.  Ask one of our team members to show you the benefits of having your small business managed by STAC Bizness Solutions.  We would be happy to give you a free consultation.

3. Delivering Industry Benchmarks

Industry benchmarks help in assessing your Salon and Spa business performance by comparing it with your competition. These industry benchmarks help with identifying the gaps in your business and give you valuable insights about where you are successful or where you can make an improvement.  Your STAC Bizness consultant will assist in helping you get these reports to make the best decision for your Salon or Spa business.

4. Preparing a Twelve-Month Forecast

A 12-month forecast is integral for any business to thrive. It is a prediction of future developments such as sale, expenses, and profits. The twelve-month forecast that we will prepare for your Salon and Spa business will assist with making goal-oriented decisions.

5. Providing Management Reports

Management reports give you a deeper understanding of your success. We will identify the data that your business needs and our management reports will help make predictions about the future growth and profitability of your company.

At STAC Bizness Solutions, we go beyond just bookkeeping. We will provide your Salon and Spa with customized, decision-ready, financial intelligence reports to help your business become more profitable and reach your goals.

Hire a QuickBooks ProAdvisor

To schedule an initial consultation with us, please click the button below.

The Ultimate Cheat Sheet On Salon & Spa Bookkeeping

The Ultimate Cheat Sheet On Salon & Spa Bookkeeping

Whether you manage your own accounting books with a small salon business accounting software, or you have hired a professional salon bookkeeper to help, you will find that managing your books will help play a major role in the success of your salon business.

Even though the salon business is a little different in how it is run, the bookkeeping doesn’t need to be such a challenge.

You will mostly receive income for services, products, booth rentals, and even commissions.  Along with this might include a lease, payroll, products, equipment, insurance and other license fees.  Your salon business will require some of the bookkeeping methods to help you keep your revenue and expenses straight.

Probably the best advice I ever got in my life was from the head of the accounting department, Mr. Hutchinson, I believe at the Glidden Company in Chicago, and he told me, ‘You really aren’t cut out for accounting.

Bob Newhart

Here are some handy Beauty Salon & Spa Bookkeeping Tips:

USE APPROPRIATE SALON & SPA BOOKKEEPING METHODS

You sell to your clients your services and products, so you need meticulous records to keep up with it all.  If you deal with any receipts, you will want to use some sort of binder to track them and divide it into months.  Then use it to keep bank statements, receipts, and deposit slips.  This will provide easy referencing and will protect you in the case of an audit.  So you will want to use your business checks or your business debit card to make purchases.  Always remember to save your receipts and deposits correctly.

Good bookkeeping for salon owners involves tracking expenses.

A salon business with inventory is normally required to report under the accrual method.  However, there are a few exceptions to this rule.  Inventory as items purchased with the intent to resell, like shampoos, brushes, and other salon products you might sell in your salon & spa business.  If your salon fits under a certain annual gross income, and most small salons fit in this group, then you can elect to choose a much simpler cash basis method to account for your inventory.  Simplicity is the main reason Salon & Spa owners want to choose this cash based method.  Setting up and using the accrual method proves to be much more complex to manage for small salon owners.

But if you’re managing a larger inventory in your salon, then we recommend an accrual method of accounting for your salon.

For most small cosmetology, hair, tanning, beauty and other salon & spa owners who are not inventorying heavy, the cash basis will prove to work best in most cases.

If you are unsure, contact a Salon & Spa Bookkeeping Professional

Setup and Use Salon & Spa Bookkeeping Technology

Think about all the services your business offers, products your business sells, and even how many stylists might work in your salon.  Setup any products you will sell.  You will need to setup your business, corporation, tax information, and employees to get started.

Go over your accounts monthly, and track receipts, deposits, and bank statements to your folders.  This would be a good time to consider using proven Beauty Salon & Spa accounting software.

Salon & Spas are cash-intensive businesses.  Features you might need in your accounting software include payroll, inventory, commissions, invoicing, payments and reports.

Hire a Professional Salon & Spa Bookkeeper to Help Out

Salon & Spa owners are no different when it comes to needing help.  If you are not interested in struggling with all the setup and management of the software, look into hiring an online salon & spa bookkeeping expert to come help you.  Rather than struggling with this, make accounting easier by hiring a bookkeeper or investing in salon business management software.  These tools can help you track your expenses, and generate invoices.  This will help you implement bookkeeping practices for your salon business.

Also, don’t be like other salon owners, and wait until the end of the tax year to get their financials organized.  Waiting until the end of the year can also result in more errors so be careful about being too hurried.  If you follow these simple bookkeeping guidelines for salon & spa business, your year-end tasks will be less daunting.  You will be better prepared to meet your salon business financial obligations.

Your main goal is to get clients to come in so you can, in turn, provide them with a great experience, so make sure to use technology to help you.  So, let STAC Bizness Solutions help you with your Salon Bookkeeping.


Looking for a QuickBooks Expert?

QuickBooks ProAdvisor Houston Tx

Working with a QuickBooks ProAdvisor is the best way to learn how to use QuickBooks to help your business grow and flourish. You won’t find a better way to get the support you need anywhere else.

As a small business owner, we realize that you may not have the budget to hire a QuickBooks expert. If you’re looking for a more economical way to get set up on QuickBooks, we provide cloud bookkeeping programs to match any business requirement. Here are our Quickbooks ServicesQuickBooks SetupQuickBooks Training, and QuickTune-up.

You can feel confident in knowing that our STAC Bizness Solutions team are Certified QuickBooks ProAdvisors. Meet Our Team.

If you would like to learn about all the benefits that STAC offers, just give us a call and we’ll provide you all the details. Call us at (844) 424-9637.

Hire a QuickBooks ProAdvisor

To schedule an initial consultation with us, please click the button below.

Top 20 Online Marketing Tips for Salons & Spas

Top 20 Online Marketing Tips for Salons & Spas

All Salons & Spas are looking for new ways to market their salon.

Here are our top 20 online marketing tips for Salons and Spas:

1.   Create a clean, professional, easy-to-use website for your customers that attracts and converts.

2.   Utilize social media ads to target prospective customers.

3.   Write informational content about your business on your site.

4.   Start a blog. Content marketing is one of the best ways to get new customers online.

5.   Use lots of good calls to action on your website for onsite conversions.

6.   Create a video to use in online marketing efforts.

7.   Optimize your website for search engines so that you rank higher and are easier to find.

8.   Advertise in an online/offline Salon magazine (preferably local).

9.   Create a Salon & Spa Brochure for your business. Market the salon & spa to new prospective customers living in your target area.

10.  Send out a coupon mailer to increase your customer loyalty using a very cost effective direct marketing strategy.

11.  Use social media to communicate with your followers. Remember to post about your work and any specials. Ask for customers to give you a review.

12.  Attend local events, and get involved with the community. This will help your online marketing with some face to face time.

13.  Track and follow your competitors one to see what they are doing to gain customers.

14.  Send thank you emails for showing your appreciation to your customers.

15.  Try using SMS text messaging to market to your customers.

16.  Use a point-based loyalty program for salon & spa products and services.

17.  Send out a survey to see how your salon is doing and gain insight from your customers.

18.  Create events and contests that help spread the word about our business through social media.

19.  Get involved in local and national Salon & Spa Events and have them showcase your efforts and link back to your website.

20.  Find local charities and community organizations to showcase and link back to your Salon & Spa.

Start using these online marketing tips for your salon & spa, and watch your beauty salon & spa grow!

Your main goal is to get clients to come in so you can, in turn, provide them with a great experience, so make sure to use technology to help you.  So, let STAC Bizness Solutions help you with your Salon Bookkeeping.  If you’re looking for help managing your books, we provide salon business cloud bookkeeping programs to match any salon or franchise salon business requirement.  Here is more information on our salon business bookkeeping services.  Our team are all Quickbooks ProAdvisors.  Meet our Team.

Contact STAC Bizness Solutions today to see if we can help.

We will provide you with a no-obligation FREE consultation!

Hire a QuickBooks ProAdvisor

To schedule an initial consultation with us, please click the button below.