y a W s e l c The Cir
FINANCIALS AND KPI’S By Sharlene Lee
Let’s talk about money. I love money. Love it. There is so much shame around money and people who want it and enjoy it are seen as being greedy, but I don’t see it that way at all. Especially for women, we are taught to be quiet about money, to hide what we earn while men are taught the opposite. There is nothing I love more than seeing female salon owners being loud and proud about it. Other than my family, money is my biggest motivator. The more I make, the more successful my salon is and the more people I can start on their own hair journey, so it’s a win win. Circles is a highly profitable and sustainable business. The reasons for overall financial success can be tricky to analyse as it comes from so many smaller elements all working together seamlessly, but if we had to break it down to the simplest forms let’s look at the numbers around Total, Retail and Colour Sales, Wages, Rent, Outsourcing and Diversifying. Then let’s dive into KPI’s.
People don’t talk about this much but I’m here to. Over 2020 our Subiaco salon smashed it and increased 34.2% while Fitz came in just under 24.3% increase on the previous year following steady increases YOY. A lot of this can be attributed to a strong foundation from which were able to build on new client acquisition, of which we averaged up to 65-70 new clients per week, and strong client retention. We also have noted the importance of online bookings for securing both new clients as well as retention with a 22% increase. The power of automation and the way this frees you up to work on the other elements of your salon will also help drive the $$$ which I discussed last column and will keep banging on about forever!
salons. The defining factor in your retail sales will always be your staff’s confidence in closing the sale as although we love our products, the actual product isn’t the driving factor, the staff endorsement is. We focus heavily on sales strategy and personal development and I work hard to be the motivator for the girls to smash their own targets to ensure our staff have the guts to up their retail average from 0-1 products to 2+ per sale. We also set monthly challenges to get the team motivated and to create a sense of camaraderie and support rather than just pitting them against one another. We also rely on sales data from each of our business partners to check how we are tracking nationally and to identify areas on which we can improve.
COLOUR SALES
WAGES
TOTAL SALES
Our colour sales had a 15% increase. The single biggest factor which will drive your colour sales is staff experience and education. The more confident your team are with their colour skills, the more colour services you are able to book, and the more consultations will lead to both one off and ongoing colour work. A bad colour experience puts client retention in immediate jeopardy so really there is no room for error here. At Circles we work on colour education both in house and externally and highly recommend the comprehensive options L’Oréal Professionnel provide.
RETAIL SALES
Our retail sales reached a 15% increase for Subiaco and even more if we are talking both 108
Hair Biz Year 15 Issue 4
At Circles we work with our own model which is well above the standard hourly rate and with weekly reachable commissions. It’s simple- the more money they generate the more money we both get. A lot of salon owners tend to hide what Senior Stylists and Juniors make but I am the opposite. Be open with the team, make sure everyone understands their commissions and if they are achievable, you will get the results. I’m not talking an extra $50 to $100 per pay, I am talking over $1,000. So many salon owners say that “my team isn’t really motivated by $$”- that is complete bullshit and maybe your incentives are too low. Think about it. Am I going to go above and beyond expectations for an extra $50 to 100 per week? Probably NOT.
RENT
One thing that I have done that has had a big impact on my financial success was purchasing the Circles of Subiaco salon. In 2004 my husband and I decided to take a big risk and bought our very first commercial property, an off the plan purchase in a development which took 4 years to build. It was incredibly nervewracking but as luck would have it, it was the start of the mining boom in WA and property prices were going through the roof, so by the time we moved in the value had tripled and this is where Circles of Subiaco is still located. Remember to consider all your options.
OUTSOURCING
I keep my business management team close to ensure we make calculated decisions with regards to growth and expansion, future proofing our brand financially and mediating risk factors. I need to have those people beside me crunching the numbers and managing my ‘dynamic’ personality with a little bit of grounding! You are a hairdresser/creative/ salon owner/business owner/entrepreneur-
