Cash Flow Ideas for Salons and Spas

Successful Cash Flow Management
Cash management is ultimately about cash flow -- and very few salons and spas are awash in cash. Even successful, growing salons and spas are vulnerable to cash flow problems because they tend to add employees and inventory rapidly. This may quickly deplete the company coffers and lead to cash shortages.
Because having cash at the right time is so important, salon and spa owners must pay close attention to cash management. Here are some tips for saving money and managing cash flow:
Make financial projections. Forecast both expenses and anticipated revenues for at least the coming year. This will help you predict when you're likely to have cash and when you're likely to need it. You should also maintain a cash reserve if possible.
Create contingency plans. Have several budget projections, including best case and worst case scenarios, and think about how you might respond. In the event sales don't take off as expected or there's some unforeseen problem, you'll be better prepared.
Keep a lid on spending. One of the most common problems with new salon and spa is the owners' tendency to spend freely. There's no need to have lavish offices or expensive furniture. Remember, you're in this for the long haul: You should try to get as much value as possible out of every transaction, whether you're leasing office space or stocking the company kitchen.
Keep inventory low. Don't stock inventory based on your fantasy of what you think you'll be selling in six months. Instead, stock only what you know you can sell in the short term.
Lease, don't buy. Another good way to conserve cash is to lease equipment instead of buying it. Although leasing can be more expensive in the long run, it helps you avoid laying out a lot of capital all at once for things like office furniture, computers and copiers.
Delay hiring employees. Try to improve the productivity of current employees (without burning them out), use independent contractors and consider outsourcing certain nonessential functions. Employees are expensive, so you should put off adding permanent hires as long as you can -- or at least until you're earning the revenue to support them.
Go without a salary. Some experts recommend stockpiling a year's worth of living expenses before going into business. Admittedly, this may be difficult, but you should at least avoid paying yourself an excessive salary. Too many salon and spa owners waste cash by paying themselves big salaries without the revenues to justify them.
Speed up customer payments. Try to get customers to pay in advance with gift cards, series sales and incenntives like discounts for prebooking appointments, and adopt more effective collection techniques for deadbeat customers.
Don't be wasteful. Recycle and reuse what you can -- for example, boxes, computer discs and file folders. The savings may not be large on any given item, but they can add up!
The MIKAL Corporation 513-528-5100 www.mikal.com

Fall Marketing Ideas for Salons and DaySpas

GETTING THE MOST
OUT OF YOUR FALL
Now that summer is over (depressing isn't it?) it's time to get back down to business and get into the business of fall. Now is the time to crank up the business of beauty. Here are a couple of ideas to get you and your staff back down to business:

$ Get a staff meeting together and go over these ideas. See what ideas generate the most excitement and appoint people and set dates for getting the projects going!

$ Clean the salon/spa from top to bottom. Paint a few walls and make a few small changes. Move some plants and displays. Decorate for the season!

$ Have everyone get dressed up. I don=t mean formal but every summer people get a little casual. It=s time to change our look and the change should be professional and upscale.

$ Get into the fall colors. Make sure your make up is right for the season and coordinates with your new look! Get the staff together for a make up session and new fashion review.

$ Start your Referral Contest October 10th and end it on December 20th. Pick your prizes, do your precontest mailing/e-mail now, and get the signs up in the salon/spa. Call us for a free 11 page Referral Contest planning book. How would 50-100 new customers sound in the next 60 days?

$ Get your front desk staff to commit to cleaning up the customer data base in the next 60 days. All of your regular customers will be in by the holidays. Run a list on your MIKAL system of all customers with Invalid addresses. The goal is to verify every customer=s address in the next 60 days. Check on the progress by running the Invalid Addresses report for all Last Visits in the last 7 days each week. The report should be blank every week if the front desk staff is cleaning up the list!

$ Get your Gift Cards on order NOW! Call Betsy at Custom Plastics at 800-334-6488 for a free sample kit. Order the Gift Card option is MIKAL's SMS software and ask for our free information pack on promoting gift cards. Gift Cards will make a huge difference in your holiday sales over the old gift certificates. NOTE: beware of companies giving you gift cards for use with their Internet or bank card systems. The costs for the processing of the card every time it is swiped become a huge expense and if a customer loses their card there is no way to cancel that card and charge the balance up on a new card. Call us at MIKAL to make an informed decision.

$ Draw up a list of outstanding bills (that you owe). Make sure you pay off these bills during the increased cash flow period in the fall and holidays before you take on any more debt. Don't spend that gift card income before the redemptions start happening in January!

$ Increase your color service prices now just before the holiday season. This will give you an additional boost to your income and the customers are coming in for that popular service during the holiday season.

Now is the time to move into the Fall season with a new look, new ideas, and new promotions for increased sales and profits!

Please call us for additional information on the Referral Contest, Gift Cards, Pricing ideas, or your comments. Have a great fall season.
Fred Dengler
MIKAL
513-528-5100 email us at sales@mikal.com Website: www.mikal.com