Technology

OK, I have a blog, so obviously I'm not totally afraid of technology. I can't imagine running our salon with a paper appointment book! It would be difficult enough to manage just the appointments, but getting the statistics and measures you need to make good business decisions would be darn near impossible.

At my salon we converted to Millennium Software by Harms (www.harms-software.com). It's not cheap - actually I think it's the most expensive one out there. But there's a reason for that! It gives us everything we need to run the business well.

There are a bunch of options out there for salon software and frankly I think they all have a great appointment book. If that's all you're looking for, go with something inexpensive - maybe one of the softwares you can rent like Elite or Salonbiz. But I would challenge you to look beyond the appointment book at the other things a great system can do for you. Some features to look for and why you want them:

Retention reports (by employee, dept, or salon and in summary or detail by client) - Wondering if you should buy an ad in a local magazine or advertise on the radio for the holidays? If your new client retention rate is 20% you're throwing your money away--80% of the new guests to walk through your door are NEVER COMING BACK!

Inventory management and reports - Which products did you sell the most of? Which did you sell the least of? How many of each item should you stock? What do you need to order today? All of these questions can be answered with a good inventory management system.

Cash Flow Projections - OK this one is really cool. Millennium will look at all the appointments on your book for some period (today, this week, next month, etc.) and add up the prices for all those services so you'll know the amount of sales on your book already. Not cool enough? It also tells you how much of that total is for clients with outstanding gift cards so you'll know how much will be paid in cash versus gift card.

Gift Cards - Gotta love the gift cards! Isn't December great?! A lot of systems also manage your gift cards for you so you can run reports on the amount outstanding. One thing I love about our software is since it tracks the gift card by recipient, when that guest comes in it provides an indicator that this guest has a gift card to use. We also use barcoded gift cards so it's quick and easy to sell them (we got ours from www.swipe-it.com - great price $0.20 each for 2,000, plus we ordered custom designed holders for $0.40 each).

Prebooking - One of the best ways to make a salon more profitable is to prebook your clients! Book their next appointment (or 2 or 3) before they walk out the door. OK, bear with me, because I'm an accountant I'm going to show you the numbers.

Let's say your salon has 1,000 clients and your average ticket is $50. If each client comes in 6 times per year your sales will be $300,000 (1,000 x $50 x 6). At 6 visits per year, that means each client is coming in about every 8.6 weeks (52 weeks / 6). Now, let's say you start pre-booking clients before they leave the salon. But instead of booking them 8.6 weeks out, you are booking their next appointment 6 weeks out. Now they're coming in 8 times per year. What happened to salon sales? Now it's $400,000 (1,000 x $50 x 8). That's a 33% increase in sales WITHOUT ADDING A SINGLE NEW CLIENT!!!

A software that will track pre-booking and frequency of visits will pay for itself. Why do you need to track it, instead of just doing it? If you can track it you can reward it. We can see our pre-booking rate by employee so we know who is encouraging their clients to pre-book and who isn't. And since we're on Team-Based Pay, we can reward those who are meeting their pre-booking goal.

These are just a few of my favorite technology tools. More to come later...