Failing Salons: 5 Warning Signs & Fixes For Continued Success

5 min

Failing Salons: 5 Warning Signs & Fixes For Continued Success

It fascinates me when I see two seemingly identical businesses in such different financial positions. While one flourishes, the other flounders. Inevitably, a little probing into failing salons almost always reveals that the difference comes down to the systems and processes in place. Fortunately, there are warning signs that every salon & spa owner should look out for. However beware, they may be subtle at first, so you must be eagle-eyed and prepared to act. Once the cracks become crevices, it’s tough to paper over them and stop the money from leaking out.

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Recognising failing salons trends & acting before it’s too late

1. You don’t have any cash reserves

Symptoms: You’re missing supplier payment deadlines and starting to worry about how to pay everyone. Money that comes into the business is instantly swallowed up, and you may be injecting your cash to pay the bills.

Causes: Over-spending and lack of budgetary planning.

Remedies: As the saying goes, ‘cash is king.’ You must keep on top of your cash to ensure you always have enough to cover your costs. The easiest way to do this is with a cash flow chart. All you need is a simple spreadsheet that tracks your current and pending expenses over the coming months, against expected and actual revenues.

Whether you approach a mentor, accountant or bank manager, please don’t be afraid to ask for help. There’s no point suffering in silence. The same goes for suppliers – if you’re struggling with bills, then they would by far prefer setting you up on a payment plan than to see you default entirely. Scrutinise every expense, both large and small to ensure you’re getting the best possible rates and terms. You may be surprised at how much you can save. Also, stop spending! Only buy the absolute essentials to keep going. Budgeting does change your buying habits for the long term. Consider whether you need to raise your own prices too. A small structured increase can have a huge impact.

Fill in the form below to download Back Office Nerd’s salon specific P&L statement template (free)!

2. You start questioning your leadership skills

Symptoms: You look around and feel overstaffed, yet you’re resentful because you seem to be the busiest person in the business. Team meetings only take place when something goes wrong. Your time is consumed by looking for ways to fill the appointment book and, at the end of the month, you’re always the last in line to get paid. The team don’t know whether they’re having a good day or a bad day – and neither do you. It’s general chaos.

Causes: I hate to say it, but the buck stops with you. You must regain your confidence, step up and take back control.

Remedies: As a rule of thumb, a good benchmark is that the value of services provided by an employed beauty therapist/stylist should be equivalent to three-times net or four-times gross of their weekly salary. At that level, with what equates to roughly 85% average occupancy, employees become an asset to the business rather than an expense.

It’s critical to your salon’s success that everyone in your team is on board with your goals and strategies. Book regular group and one-to-one meetings to ensure staff stay positive, engaged and clearly aligned with your business direction. Don’t forget to ask for their ideas. You may also need to think about making staff cutbacks, rather than the constant pressure to try to fill white space in the diary.

3. You need more clients

Symptoms: Empty appointment books and a revolving door of new clients coming into the salon, never to be seen again (except by peering into the windows of your competitors).

Causes: No mechanism for soliciting and acting upon feedback from clients. Limited attempts to keep your business at the front of clients’ minds.

Remedies: First, a sanity check: is the problem really that you need more clients? Do you understand where all your existing clients have gone and why they haven’t returned? You need to dig into these problems and fix the root causes to stop the cycle continuing. Start by getting honest feedback from the clients you still have, as well as those you think have vanished.

It may feel like a distraction from the day-to-day running of your business, but with today’s hectic lifestyles, it’s important to keep in regular contact with your client base through good marketing. Otherwise, it’s easy for them to let you slip from their minds.

Think up new marketing ideas and give them a go. There are so many things to try before you start discounting: special invitational events, bring-a-friend promotions, add-on treatment trials, teaming up with other local businesses… Compose a thorough marketing plan that maps out the year ahead – don’t make reactive decisions just to fill tomorrow’s appointment book.

Plan the diary for the long term by checking your clients booking history and schedule appointments in advance.

Related | Top Insights For Salon Success From The Phorest Salon Owners Summit 2018

4. You’re overstocked

Symptoms: You have shelves and stacked boxes full of dusty, unsold products. Some of the branding is out-of-date. You may also have under-utilised, expensive equipment getting in the way.

Causes: This only takes a few over-eager orders or a couple of days excitedly flashing your credit card at a trade show.

Remedies: It’s so easy to make inaccurate buying decisions – especially when you’re busy, tired and ordering in a rush. But it won’t take long for this to have a massive impact on your cash flow. Don’t act hastily here; take the time to get a real handle on the situation and react appropriately. Get rid of retail lines you no longer want to stock and be ruthless about redundant equipment. Try selling them in bulk. Alternatively, create new ways of selling stock, such as with an online store.

Another great way to shift stock while also creating attractive promotions is to bundle products in with limited edition treatment packages. Ask your suppliers if they can also help you promote your retail lines.

failing salons

5. You aren’t sleeping

Symptoms: You turn off the light and shut your eyes, but the problems are still churning around in your head. You spend the night sleeping fitfully, tossing and turning, before waking with the same thoughts immediately springing to mind. It’s all-consuming, all day.

Causes: It’s easy to say, I know, but this is the outcome of focusing wasted energy on worrying, rather than creating a healthy plan to resolve the issues.

Remedies: You will start to feel much better if you make an effort to sit down and design an action plan with clear steps in place to correct the imbalances in your business.

Final thoughts

Fire-fighting zaps energy and detracts from all the positives your business will have. Take a moment to remind yourself of them. List what you do well and magnify each success. Write a statement that makes you feel good about your business and look at it regularly. Life and business ownership are supposed to be fun, but sometimes you have to take a few knocks to set yourself back on track. Take the lessons, learn from them, and keep doing your best every day. Whatever issue you’re facing, there’s much more help around than you realise, so don’t feel alone, speak to someone.

Here’s to your great business success!

Looking for personalised advice? You can always email Susan at or via Got general feedback? Let us know either in the comments below or tweet us @ThePhorestWord! (Pssst! We’re on Instagram too!)

Thanks for reading! #LetsGrow

Featured imaged shot on location of the Thrive Sessions 2-day workshop, in Denver. © 2018 Phorest Salon Software.

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