Business & Marketing
Understanding Your Sola Business
Posted on August 24, 2022
It is important to regularly assess the health of your business for a few reasons. As a Sola Professional, you are in total control of your own opportunity and earning potential. So whether you’re trying to set new goals to help your business grow or know how successful you were last quarter, it is up to you to know your numbers so that you can make positive changes that impact your business.
What numbers should you look at?
You want to track and assess the parts of your business that indicate whether or not you are meeting or exceeding your guests’ expectations, improving guest loyalty and increasing your overall revenue. Items like average ticket, total service sales, retail sales and number of pre-booked appointments are good for starters.
But what if I don’t have time to track my numbers?!
Assessing your business can help you in so many ways. It’s important to know where most of your income is coming from so that you can focus your energy on improving areas that are most valuable to your business. In order to ensure you are carving out time to regularly assess your business (whether it’s on a daily, weekly or monthly basis) schedule it into your calendar like you would a client’s color. Put it on your books for an hour each week like clockwork and stick to it. Pick a slower day to do this if necessary, or plan on coming in an hour earlier than you normally would one day a week.
What are KPIs, and what do they do?
KPIs (key performance indicators) will give you the facts you need take the guesswork out of prioritizing what you should work on. They can also guide you in setting clear, realistic goals. Assessing your success based on your KPIs show you very clearly how effective you are with serving your clients and help you compare where you are now with the goals you have previously set. They are like a mirror to show you your strengths and where you can improve.
We’ve separated the KPIs we recommend you follow into four areas. From a high-level view, we recommend tracking and analyzing total sales and your overall guest average ticket. From there, you can look at your service business, retail business and guest retention information.
- Total Sales: This is the total combined amount of service and retail sales. Compare this to your goals for the week, month or year. You can also compare this to last year’s performance to assess progress.
- Average Ticket: This is the average amount of money your clients spend with you per visit. Your total average ticket helps you to assess overall performance and can be used to project growth in your future. To calculate the average ticket, take your total sales and divide it by the number of guests you saw during that given time period.
- Gratuity %: This is the average amount of money your guests tip you. This is an important part of total sales because it is income and must be tracked from a tax reporting standpoint.
- Service Sales: This is the number of dollars you generate on a daily, weekly, monthly and annual basis in services.
- Service $ per Guest: This is the average amount your clients spend on services each time they visit. You get this average by dividing total service dollars by the total number of clients for the period you are reviewing. Compare this average to your goal and with your pricing.
- Frequency of Visit: The frequency of visit is the number of times a client visits you annually. Increasing the frequency with which your clients come in is a surefire way to increase your total sales. If a client typically comes in every 8 weeks, but you're able to show them that they should be coming every 6 weeks, you will increase the total times they visit you by 2 times per year. This can make a big impact on sales volume.
- Retail Sales: This is the number of dollars you generate on a daily, weekly, monthly and annual basis in retail.
- Retail $ per Guest: This is the amount your clients spend on average in retail each time they visit. You get this average by dividing total retail dollars by the total number of clients for the period you are reviewing.
- Retail to Service %: Your Retail to Service % indicates how effective you are at serving your clients with retail. Divide your total retail dollars by your total service dollars to get this percentage. If you are a stylist, your goal should be 15%. For estheticians, it should be 75%; for nail technicians, the average is 10%; and for massage therapists that offer retail such as body lotions, the average is 5%.
- # of Guests: Tracking the number of guests you have is important information that helps you factor all other KPIs. The health of your business depends on having a healthy book of business!
- Rebooking %: Your rebooking % is a key indicator of your ability to retain your guests as well as predict the number of clients and money you can expect to make during a given time period. Your rebooking % is calculated by dividing the number of guests who rebook with you by your total number of guests. Your rebooking goal should be 80%.
- # of Cancellations / No-Shows: Tracking the number of cancellations and “no-shows” you have is an important indication of how you serve your guests. This number should be minimal and sporadic. If it happens more frequently, a review of how you rebook, follow up or schedule clients is important.
Now that you know what KPIs are, here are 3 ways to use them to make more money 💸
- Increasing your clientele: If you look at the number of clients you are servicing on a weekly, monthly or annual basis, and that number is lower than you like, it’s pretty simple to see that it’s time to do some marketing to attract new customers. To put it simply, by increasing your clients, you will increase your overall revenue.
- Increasing your frequency of visit. Increasing frequency of visit is all about getting your current customer base to visit you more often. You can increase the frequency of visits by offering more services, asking clients what else they need and understanding what kind of special occasions they have coming up.
- Increasing your average amount spent per client. You can achieve this goal by increasing your prices, offering more services at the time of their visit and, increasing your retail sales.
Understanding the Service Cycle
Part of digging into your KPIs and assessing the financial health of your business is revisiting your service cycle - aka the customer journey that your clients go through before you see them at their scheduled appointment. This should encapsulate their entire experience - even before they foot into your business.
- Booking and Arrival We all know you never get a second chance to make a great first impression, with that in mind, let’s talk about how the first experience you provide can make or break the number of new clients you retain. This can be as simple as having a consistent and reliable booking process, or in the way you communicate via email or text with your customers for booking. Whatever your process is, make sure that the booking system is easy for them to use and for you to maintain.
- Consultation Don’t rush through a consultation. It’s important to be consistent in your approach and treat every appointment like it’s the client’s first time in your chair. By taking the time to understand your guests’ needs, you can market your specialty services that they might be interested in and think about how to increase average dollar per guest based on the needs you uncover. It’s never safe to assume what a guest wants, whether they are a new client or they’ve been coming to you for years.
- Service and Retailing While it may seem simple, there’s so much that happens while you conduct the service. Make an effort to describe what you are doing as you perform the service, from the shampoo bowl to the finishing, share with your client WHAT you are using, WHY you are using it and HOW they can use it at home. Do you describe the techniques you are applying while you do them, or are you letting the client dictate the flow of conversation? Do you talk about and teach your clients about the products you're using? Do you let them hold the product to smell it and see what it feels like in their hands? When you complete the service, how do you recap? You’re the trained expert, and this is your time to shine!
- Service Completion At the end of the service, take a moment to recap what the client said they wanted during the consultation, and make sure they are happy with the results. Recap the products you recommended throughout the service to ensure they understand how to use them. Then, ask if there are any products they’d like to take home with them.
- Checkout Process Whether asking for referrals, pre-booking, taking payment or retailing, there’s lots going on when you close out the service. Maybe when you review your KPIs, it shows you that your pre-booking percentage is not where you want it to be. Take some time to reevaluate your checkout routine and see if there’s a way you can add an incentive for customers who pre-book.