Closing…

[theislandtan]

I bet that caught the attention of some of you…

We’ve pretty much decided to close the salon on Tuesday and Thursday next month and keep it that way till around December. We’re not really staying busy enough to warrant staying open those days and the few tanners my wife has spoken to appear to be ok with it. Heck, it was one of our main tanners idea... Tomorrow we’ll start informing our customers of the change and get their reaction. A month ago we started closing on Sunday with no complaints. So far the consensus has been as long as we give enough notice most are fine and understand.

Anyone else do this?

[Mojave Tan]

Wow. You are closed 3 out of the 7 days. My customers would be gone and off to the next salon.

[theislandtan]

Originally Posted by Mojave Tan

Wow. You are closed 3 out of the 7 days. My customers would be gone and off to the next salon.

Its a gamble, but we're willing to give it a try. We didn't have one person complain about closing on Sunday. Nor have we had anyone complain about being closed during the holidays.

If we get to much of a backlash we'll change it back. We're going to do our best for the customer, but also need to cut expenses where possible. Few customers come in more than 3 times a week so we aren't preventing them from getting their current package usage, just limiting the days they can do it.

We'll push the envelope some and see what happens. Most say they can raise prices without any issues. We're keeping prices the same but cutting expenses.

[dcjjp1]

This is gonna be long, but it has really changed my expenses.

I'd personally just trim some hours where you can at either opening or closing, instead of closing 3 days per week. That's great if your existing clients are good with it, but as a perspective client, I'd go somewhere else as it seems you are open according to your needs and schedule vs. mine.

I did a extreme cost cutting last year and trimmed more than 2K off of my monthly expenses by getting rid of some small stuff like:

Taking on some more hours (working from open 10-6:30 letting me be the second person for part of the evening) and having someone come in from 4-8 M-F. Cutting Saturday to only one person for the 8 hours or (2) 4 hour shifts (no overlap) instead of having 2 people all day. Cutting Sunday all together year round, Saturday business is more than double last year. Sunday was a dog anyway so no big loss for me there (nothing else is open anyway aside from a few restaurants and they are even dead)

Switching payroll company (or even doing it yourself for that matter saves alot) CC processing (shop around) cutting dead advertising costs (like phonebook, direct mailers) and going mainly internet based email blasts and grass roots/guerilla marketing of flyers printed by clubflyers.com (super cheap) utilizing my people or networked partners to distribute them. Pairing up with a local gym (2) and giving their clients a discount for tanning with us in exchange for promo's in their space and free memberships for my staff as incentives.

Stopping printing menu of services to hand out and instead doing a counter card and utilizing more of my business cards (designed and printed at Kinkos, really cheap) to direct them to our website that way if there is any price change I only have to do in 2 places (countercard and internet site)

Even purchases in larger bulk vs. going to the local store more often, using newspaper to clean mirrors (works better anyway and I feel like I'm being greener) vs. buying tons of papertowel, investing in a steam mop and using the bed cleaner in it to disinfect floors ($79) instead of costly additional floor disinfectant, cheaper cleaning chemicals for cleaning bathroom vs. name brands.

I was floored at how much we saved and personally, the client would never know aside from ditching the mints on the beds ($50) saved per month alone.

[sunsally]

Jeff's post is a great one that EVERY salon owner should think about and look at their OWN business - today!

When I hear from struggling salon owners, they generally think the "problem" is their lease payments. The lease payment is what bought you the equipment you have - if you can't afford it - it means you aren't bringing in enough revenue since (at least with Highline), you can get more than $100,000 worth of equipment for about $75/day on a payment!

So 2 places to look - how do I LOWER COSTS and how do I RAISE REVENUES?

Jeff's post outlines GREAT places to start on costs! Others I would mention:

-Shopping insurance companies

-Smart lotion inventory (not too much at a time, consider discontinued/closeout products, monitor for theft,...)

-Evaluate ALL outside vendors and decide if you need them or can find someone for less -- payroll, insurance, cleaning services, advertising, rugs, internet (is it just for you to do chat sites or is it so you can view salon data because you don't work there), window cleaners, etc etc etc

-Check bills for "hidden costs" snuck on - phone company and merchant services are most famous for this!

-Check payroll hours. At one point I monitored and found that during "shift change" when one would sign in (a few minutes before her scheduled shift change when she showed up), the other often woudn't sign out right away. I was paying both for 10-15 minutes --- up to 25, 40 and even 50 -- when we weren't busy enough to need two -- they were just "chatting" with both on MY clock! In the end, this added up to as much as $50/month in extra payroll

-Advertising with low/no effectiveness: If you don't know what sort of a "return" you are getting from your advertising - you shouldn't be doing it! From coupon clippers to school yearbooks and calendars to anything else. If you can't "measure" the results - then you may just be throwing money out the window!

- Hours - based on your area, competition and customer patterns - are you open the right hours/days? Generally, I say 7 days/week. But this CAN vary for an individual salon. If you are only seeing 30 people per day, probably don't need to be open 8am-11pm Sun-Sat. But of course - the BETTER way to deal with this is see more than 30 people per day!


Revenues:

-Call or email your data base -- cheap and effective -- you are reaching "known tanners" who already know you. Now you just need an effective offer to get them to come in!

-EFT program. Some of you don't believe, but when done properly, salons with EFT programs see substantially more customers and make more revenue.

-ACTIVE referral program - talk it up to EVERY customer, give them cards to hand out, give them "incentives" to bring new customers to you.

-SELLING - know HOW to sell, and do it! Ask about upgrading, lotion purchases, bigger packages, other services you offer, etc. If you don't ask - it won't happen

[dcjjp1]

GREAT ADDITION Ann. Funny thing is that you both have been to my salon in the past... LOL!

As far as selling goes, you have to ask for the sale, comp some upgrades on occasion to entice them to upgrade more often or even change their regular buying habits. Comp a product and let them see what it can do for them.

We aren't in it for the hard sell, more suggestive. I trimmed my lotions from about 15 at one point down to about 8 + a few Mystic stuff also. Focus on what sells, if they want something else, special order it as needed to keep them buying from you.

Don't apologize for your prices, add value with upgrades, combine with lotion purchases etc...

Eft's are a good income maker, we have under 100 now (dropped slightly) by are netting close to 5K monthly from them still, my goal is to get them up to about 7K to pay my rent fully.

[Kathe]

Great posts. I agree with cutting costs rather than cutting hours. It's amazing how much waste was in our salon. I agree with everything Jeff posted and we have done all of that (except the candy in the rooms - lol) in the past 2 years. We also keep our inventory stocked but not overstocked. That is money that just sits on your shelves, especially this time of year. Have enough so you look like you have product to sell but don't overload.

Watching the amount of payroll is huge I think. Our payroll covers at most 25 hours per week. I work the rest and if there are doubles on a shift I am the 2nd person. My employees know they basically work for free tanning, discounts on products and other services and a little spending money.

We don't hire outside services at all. We take our garbage home (2 bags per week at most) or share with a neighbor for a few dollars. We wash our own windows and floors. We don't use a mat service, we wash rugs instead.

And advertising is huge. You can get sucked into spending hundreds and thousands of dollars with little or no payback very easily. JUST SAY NO!

Like Jeff said, get creative with other businesses or offer a referral program to your current clients. That's what we do. I figure I would rather reward my current loyal clients with upgrades and discounts for referrals than to pay some company where there was no guarantee of ROI.

And our Sam's membership has more than paid for itself. Buying bulk cleaning supplies, towels, etc is well worth it.

Look at a list of your monthly expenses. I would bet you could cut a big chunk of that off if you really looked at it.

And I also agree that cutting back on daily hours vs closing all together is a good idea. At least then your customers know they can come in on Tues between noon and 4 or sometihng like that. Competition is too fierce in this business to give your comp an opening like that.

How is the lighting set up in your salon? If you have different circuits then you can turn lights off when they aren't in use. I do that a lot this time of year. When I don't have customers the lights are off.

The savings can really add up as Jeff said.

[Kathe]

Originally Posted by sunsally

-Check payroll hours. At one point I monitored and found that during "shift change" when one would sign in (a few minutes before her scheduled shift change when she showed up), the other often woudn't sign out right away. I was paying both for 10-15 minutes --- up to 25, 40 and even 50 -- when we weren't busy enough to need two -- they were just "chatting" with both on MY clock! In the end, this added up to as much as $50/month in extra payroll

This is huge! I have a rule that they have 5 minutes for shift change. Anything overlapping by more than 5 minutes must be explained and approved by me. This has cut out a lot of wasted payroll for us. I also don't allow them to punch in more than 10 minutes before opening the salon and they must be punched out within 15 minutes of closing time unless they can show me there were customers in tanning later.

[theislandtan]

Originally Posted by dcjjp1

I'd personally just trim some hours where you can at either opening or closing, instead of closing 3 days per week. That's great if your existing clients are good with it, but as a perspective client, I'd go somewhere else as it seems you are open according to your needs and schedule vs. mine.

We started staying open later once summer hit. I don't think we can really trim hours across the board without impacting folks. Thats one reason we're thinking of closing a couple of days instead.

We understand it might impact new customers, but there and fewer of those each week. At this point we're going to focus on our existing customers and see what they're ok with. It appears they'll be ok with the change.

At this point we feel the cost and time savings justify the potential loss of a couple new or existing tanners. Come busy season, we'll open back up six days a week.

We run a pretty tight ship at the salon now that we have a few months under our belt. We're unable to trim any more employee hours because of my travel; my wife has to pick our son up from daycare.

Thanks for the response!

[JeffK]

This is the kind of thread this website needs...

The main disagreement I have is about the lotion.. It's been proven over and over and over again that you need to have heavily stocked retail displays... You also need to do what retailers do when an item gets sold, push the remaining items up to the front of the shelf as soon as the client leaves..

I don't want to start spitting out specific numbers on lotion costs for obvious reasons, but you all know what I would say about our lotion costs if I did say it... the reason I'm not-saying-it-while-saying-it is to make a point that the investment isn't a massive one to stock up and I believe it's beyond important -- it's crucial.

Have a great selection and have plenty on your shelves. Even in the summer. Yes some will sit there, but we all know lotion lasts and in the worst case scenario in 4 months from now you're gonna have a big Christmas sale anyway so you can move it then..

[theislandtan]

Originally Posted by Kathe

Competition is too fierce in this business to give your comp an opening like that.

Thats the gamble. We'll either cut expenses and keep our existing customers, or cut expensese and lose them. The tanners we have now are the loyal ones. We'll get more feedback over the next couple of weeks, but at this point we beleive they'll be ok with the change. It might cost us a new customer here and there, but those have slowed to a trickle.

I'm willing to lose the the guy or gal who tans everyday on a monthly package. They don't make me anything. The rest of our tanners come two or three times a week and won't be impacted much by the change.

[JeffK]

Originally Posted by theislandtan

Thats the gamble. We'll either cut expenses and keep our existing customers, or cut expensese and lose them. The tanners we have now are the loyal ones. We'll get more feedback over the next couple of weeks, but at this point we beleive they'll be ok with the change. It might cost us a new customer here and there, but those have slowed to a trickle.

I'm willing to lose the the guy or gal who tans everyday on a monthly package. They don't make me anything. The rest of our tanners come two or three times a week and won't be impacted much by the change.

This idea is absurd in its entirety.

[EliteMike]

I agree, are you telling us that you make 0 money on tuesdays and thursdays?

Lotion needs to be stocked as well, but you need tohave money to stock it

[Kathe]

Originally Posted by JeffK

This is the kind of thread this website needs...

The main disagreement I have is about the lotion.. It's been proven over and over and over again that you need to have heavily stocked retail displays... You also need to do what retailers do when an item gets sold, push the remaining items up to the front of the shelf as soon as the client leaves..

I don't want to start spitting out specific numbers on lotion costs for obvious reasons, but you all know what I would say about our lotion costs if I did say it... the reason I'm not-saying-it-while-saying-it is to make a point that the investment isn't a massive one to stock up and I believe it's beyond important -- it's crucial.

Have a great selection and have plenty on your shelves. Even in the summer. Yes some will sit there, but we all know lotion lasts and in the worst case scenario in 4 months from now you're gonna have a big Christmas sale anyway so you can move it then..

I agree. I didn't mean to go down to bare bones like I've seen some. I keep 2 to 3 of each lotion. But I also start weeding things out this time of year, things that aren't selling as well or ones that are discontinued. It allows me to ramp up this fall when the new lotions come out. I do totally agree that you need product to sell product and half empty shelves look like you're not really in business.

[theislandtan]

Originally Posted by JeffK

This idea is absurd in its entirety.

We'll see. I see no point sitting on your ass during the slow season struggling to make a profit. What’s the point? The vast majority of people tan a few months out of the year, why run a salon year round the same way?

I guess we're lucky because we can try different things to see if they work. I keep hearing how the tanning industry sucks now and everyone is losing money except for a couple months out of the year. I'm willing to try different things to not become of the complainers…

Worst case scenario we shut the doors till next busy season. We're out less than $1000 a month with fixed expenses.

[theislandtan]

Originally Posted by EliteMike

I agree, are you telling us that you make 0 money on tuesdays and thursdays?

We bring in money each of those days. "Making" money is different than bringing it in.

[JeffK]

Originally Posted by theislandtan

We'll see. I see no point sitting on your ass during the slow season struggling to make a profit. What’s the point? The vast majority of people tan a few months out of the year, why run a salon year round the same way?

I guess we're lucky because we can try different things to see if they work. I keep hearing how the tanning industry sucks now and everyone is losing money except for a couple months out of the year. I'm willing to try different things to not become of the complainers…

Worst case scenario we shut the doors till next busy season. We're out less than $1000 a month with fixed expenses.

You need a dose of Oshman's special comforting right about now.. unfortunately that was the closest I could get..

This thread has alternative ideas to try rather than closing 3 out of 7 days of the week.. But instead you're floating the concept of closing until busy season..

I guess the most candid advice I can give you is it's time to explore selling.

[Kathe]

I don't think everyone is complaining. I think many who have done this for a long time are honest that this industry has changed a lot since 2001. We are up in revenue more than 29% this year over last so you won't hear me complaining - But there are certain things that work and don't work in this business, that is all we are trying to say. The biggest part of this business is customer service. Customer service is being open to service your customer for their convenience not the owners. We are just trying to help with our experience. I'll be the first one to say I've made a zillion mistakes in the beginning. I wish I would have had vets to tell me stuff like we are telling you now.

Just like my pricing. My pricing was wrong and I had it for 15 years. I've finally got it right and we are making more money. I listened to those who were doing it right but we didn't have that option 15 years ago.

[Kathe]

Originally Posted by theislandtan

We bring in money each of those days. "Making" money is different than bringing it in.

Not really, not in this business. I don't take just one days receipts and decide if I'm making money or not. I take the entire month, or 3 months, or 6 months or year together. I may have a $15 day (which I had in July a couple of times) but over all the month did $6000 more than I did last July - up 58% from last year. You can't just take one day and determine your salon viability. How can you decide which day a new client might decide to come to your salon and drop $100? I had 5 brand new clients yesterday. The previous 3 days we had no new clients. How could I have predicted which day those 5 people would want to start tanning and look for a salon, which happened to be mine. If I was closed they would have each found a different salon.

[solman]

As stated this will definitely be a gamble. It will also be interesting to see what the long-term impact it has on your client base. I agree that it's a very risky step. If you're dead-set on doing it I'd offer one suggestion. Consider a door sign that would be posted only on your closed days inviting any new customers to come back tomorrow, mention they came by, and receive a very special deal...and be sure it is a very special deal! Just remember you only get one chance to make a first impression, and being closed isn't a very good impression. It doesn't sound like you're looking for anyone's approval though so good luck and please keep us posted.