Guest Article by Gloria Murray, Accountant and Director of Murray Associates Accountants
Everywhere you go, you see cheap deals. It seems like customers are always asking for discounts, and so it’s easy to feel beaten down by pricing. The problem we all have at some point is we forget that some of our customers are happy to pay our normal prices. In fact, there’s more of them out there than you think. But how can this all affect your salon business plan?
I’m an ex-hairdresser turned accountant, so it’s safe to say I’ve got experience at the sharp end! An accountant for nearly 20 years now, I’m privy to a wide variety of small businesses financial information. I know of business owners that are constantly struggling to pay their bills, can never take time off and work really long hours. I’ve been there myself. I had to take a really long hard look at my business, and my problem was that like many others, I wasn’t charging enough for the services I was providing.
Make Pricing Irrelevant!
I’m a great believer in treating my clients well and have set up my business to give more than what the normal accountant delivers. It was also something I believed in doing back when I was a hairdresser, and I’m sure you’re the same. But the thing is that if you’re giving more than a bog-standard service, then you’re already doing more than most of your competitors.
If you’re not charging enough for this and making it a point of difference, then you won’t be able to keep it up. You’ll start cutting corners, and the great service you set out to give will start to slip. In a little while, you will by default, be pretty much bog-standard too. That is simply not the salon business plan you set out with, is it?
That’s not the salon business plan you set out with, now is it?
I’ve seen this happen to clients, and it was a route I almost went down myself. Most of us are not as price sensitive as we think our customers are. In fact, studies show around 15% of the population always buys the most expensive option available. Most of the population is somewhere in between, and around 10% will always choose according to price. Once you understand this, it gives you the opportunity to price in a different manner.
So what can you do to stop this from happening? Make pricing irrelevant!
5 Key Tips To Restructure Your Salon Business Plan
1. Make Yourself Compellingly Different From Your Competitors
What is your competition not doing that customers would like? Or what are they not telling their customers about what they do that you could embellish on?
2. Act Like The Expert You Are
You are the expert, so you have to make sure you tell your customers about the products or services that would help them look better or achieve what they secretly want. Don’t prejudge!
3. Look At Everything From A Customer’s Point Of View
How do you answer the telephone? Greet someone when they arrive? How quickly do you let customers know if you’re being delayed? Iron out things that can potentially alienate clients when dealing with your business.
4. Think Long And Hard About Why You Discount (If You Do So)
Look at the effect it can have on your numbers. In an industry where the competition is fierce, the last thing you want is to take part in a race to the bottom.
5. Look At Charging Different Customers Different Prices
Could staggered pricing work for your business? Could you offer student prices? Remember, charge what you’re worth and don’t apologise.
Hope that helps you look at your salon business plan a little differently!
Thanks for reading!
Gloria Murray is an award-winning Accountant and Director of Murray Associates Accountants. Based in Glasgow, she specialises in helping small business owners grow sustainable and ethical companies that not only provide a better service to their customers but also contribute to local employment. She also runs mentoring and networking groups for entrepreneurs.