Sunday, 8 February 2009

How healthy is your salon business?

With the state of the economy on everyone’s mind and things looking a little bleak, it may be that you are worrying about your business and how best to ensure it survives the recession.

Well before making any plans and taking any actions you should get a full understanding of how well you are doing now. So, first things first, assess where you are and how strong your position is in the market by doing a SWOT analysis; this is a meticulous look at the Strengths, Weaknesses, Opportunities and Threats associated with your business. The Strengths and Weaknesses will be things that come from within your business and the Opportunities and Threats will be external factors that affect or may affect your business.

I know that most small business owners do not seriously consider producing business plans, marketing plans and doing SWOT analysis as they all seem over‐the-top and not like real business; just a load of paperwork and theory. Whilst I agree that one of the greatest skills a business owner has is the ability to ‘get‐on’ and make things happen in the ‘real world’, it must be said that taking some timeout to thoroughly work through a strategy and write down some plans can save a lot of ‘headless chicken’ actions!

Here are some examples of Strengths, Weaknesses, Opportunities and Threats…

Strengths – What is really good about your salon business (internal)?
• Salon has a great atmosphere; clients always seem to enjoy their visits.
• Salon has a loyal client base.
• Salon has excellent technicians/operators.
• Salon is well located.

Weaknesses – What are its limitations? Where could it grow or do better (internal)?
• You have a weak approach to marketing; hence very few new clients.
• You are the most popular tech or therapist and client’s always/only want you.
• Always experience poor/average product sales.
• Salon interior is out of date.
• Customers have difficulty finding the salon; salon isn’t ideally located.
• Limited floor space; always a struggle to add new treatments.

Opportunities – What opportunities has your business been or could be presented
with (external)?
• Could add extra treatments.
• Could rent out top floor.
• Could create bespoke treatment packages for local businesses.
• Could merchandise products more effectively.

Threats – What are the worst‐case scenarios for your business and how will you
address them (external)?
• Lease about to expire and landlord may not renew.
• Rents and/or business rates about to rise dramatically.
• The business is in negative cash flow.

These will be different for different salons and situations, but doing a thorough SWOT analysis will give you a methodical way of working‐out what is really great about your business, what isn’t so great and where you may be missing out on crucial opportunities. It will also help you prioritise where you need to focus your time and energy for maximum profit and long‐term success. It may be difficult, but be as objective about your business as possible; especially with its weaknesses ‐ image you are looking at another business and not your own. It’s only through being thorough that you will give yourself the opportunity to improve or even eradicate the bad bits, while securing and growing the great bits!

Do your own analysis and make the most of your business today!

If you need assistance to start your own salon or are unsure about how to improve
your current salon business and overcome any of its weaknesses or threats visit or call us on 0845 643 1619.