The role of data in business

The role that data plays in your

business Photo by Carlos Muza on Unsplash

Today most clinics are run using software, but are business owners making the most of what can only be described as the goldmine of information at their fingertips, namely data?

Knowing your data is critical – it is not just a luxury for big corporations, it is essential for any business to run successfully, no matter the size. So says Shani Leon of booking app, My Appointment. She continues: “I once asked a prospective client how she measures how well her salon is doing, and her response was: ‘I check if there is money in the bank account at the end of the month’. While this answer was humorous, it was also very honest and true for many business owners. And yes, having money in your bank account at the end of the month is definitely a clear indication of how the month went – so it is a logical thing to check. However, this is a completely re-active approach. What it won’t do is help you make decisions and move the business in a pro-active way. It will also not offer you any insights into why there is (or isn’t) money in the account at the end of the month.” Leon points out that there are so many variables that can influence the revenue of a salon business, such as seasonality, staff complement and staff performance. “When comparing data, it is important to take all of these factors into account so that we compare like with like.”

Tracking trends

Gary Halberstadt of Spa Guru notes that while most salons and spas utilise a software solution to help them manage their day-today operations, it’s essential to be able to access all this electronic information in a way that allows managers and staff to track trends and act on this data. “From a revenue perspective it’s important to keep track of what services and products are the most popular in order to help focus your marketing, and also to ensure that you are keeping up with changing client needs. “Particularly during this global pandemic, utilising data from your system to see what services are still in demand and which are seeing a drop in utilisation is essential. This can ensure you focus on what’s profitable and what clients are still comfortable coming in for, whilst reducing costs on services that are currently seeing low demand,” explains Halberstadt.

‘Living information’

As Chris Parker of ESP Online points out, the term business intelligence means gathering data, converting

it into meaningful information, interpreting this information and taking positive action in response to the interpretation. “Using business intelligence to support your decision making process stands opposed to making decisions based on gut feeling. Rather you give up what you think you know about your business and take a neutral standpoint in order to let the facts speak for themselves. Business intelligence gives an objective point of view rather than a subjective point of view. “The difference between business intelligence and management reporting is that business intelligence is meant to be ‘living information’ that should really be referred to on a daily basis and a top down view is critical and suggests that owners begin with a very simple entry point such as whether turnover is up or down compared to a comparable previous period. “This then begs the next question of why your turnover is up or down compared to a previous comparable period. The ability to answer this question will depend on your ability to make sense of the sales information that you generate on a daily basis. Every question that you are able to answer will usually lead to another question. The more questions you answer, the better. “Your aim is not only to increase turnover but ultimately to improve your profitability. Therefore, you need to be working towards not only operating at full capacity, but also to be maximising returns once you have reached capacity. For example, if all your therapists are fully booked all of the time, you may decide that your only choice is to expand by either opening another branch, or extending the size of your spa. However, by using data to pinpoint your situation, you realise that you need to be get a higher return per client visit, which should yield greater returns without the capital outlay (and imminent overheads) of expansion,” concludes Parker.

There are so many variables that can

influence the revenue

of a salon business

such as seasonality staff complement and staff performence Particularly during this global pandemic, utilising data from your

action should be taken almost daily to correct performance that is not in line with the target requirements. “Business intelligence, therefore, needs to be a working tool that not only gives you information about your business, but also assists you in doing staff appraisals on a regular basis so that they are part of the overall objectives for your spa, so that staff can benchmark themselves against the performance of the spa on the whole, as well as other therapists if necessary. Therapists need to feel empowered by the feedback that is given to them through the business intelligence cycle so that they not only get a reflection of their performance, but also the kind of input they need in order to grow their performance.” Parker believes that starting with

Key metrics

Leon points out that the My Appointment booking app can help salon owners by identifying key metrics, which can be used to make business decisions. She continues: “You will easily be able to identify which service types sell the most, which product houses sell the most, and most importantly, which are the most profitable. This type of information can help you to push the right type of sales and maximise profits. “One of the key aspects of My Appointment is that it is a completely cloud based point of sale. This means that not only do you have access to the necessary analytical data, but you will always have the most up to date

system to see what services are still

in demand and which

are seeing a drop in utilisation is

essential.

information at any time and from anywhere. This will give you the agility to make business decisions quickly in response to what the data is telling you.”