Tracking the performance of your business and your team relies on five key performance indicators. HELLEN WARD explains why

Ward’s World

At the recent Professional Beauty London show, I met a woman who worked for a software company in New Zealand and shared with me that in their territory, they often refer to salon owners as “accidental business people”. This really struck a chord with me.

We all know that the most successful, busiest hairdresser, therapist or nail tech is often the one who goes it alone and branches out to open their own salon. But running a business requires a totally different skill set to that required to grow and maintain a fabulous column.

Very often, the fledgling owners spend years thinking that running their clientele is their “real job”, while time spent off the floor in the office “isn’t really working”. It’s a mindset I come up against time and again, hence my famous question: “Are you a therapist or a businessperson?” Because you simply can’t be both – one has to supersede the other.

“Running a business needs time and attention. It’s simply not something we can fit into a column between clients”

Managing time

As you can imagine, the thought that we are merely accidental business people is an attitude to which I give short shrift. One salon owner once told me her team accused her of “dossing in the office and taking it easy” whenever she spent time out of the treatment room, so she started doing her office job after hours, and was hence fed up, tired and demotivated.

Nobody will thrive if they don’t have the correct work-life balance, and getting it right is the key to our wellbeing, as well as our performance. Running a business needs time and attention. It’s simply not something we can fit into a column between clients.

Many salon owners I meet impress me with their knowledge. But some merely cite the reports their software systems churn out. We all know that a lot of the techy stuff is written by people outside the sector, hence the knowledge and understanding of what we need isn’t there. The key is keeping it simple. We only need to track five key perfomaance indicators (KPIs) where our teams are concerned to get a tangible indicator of how they are performing:

1. Treatment turnover

2. Retail turnover

3. Occupancy rate

4. Client request rate

5. Average bill

The key is not only consistent monitoring of this data, it’s learning how to interpret the figures to get an accurate overall performance indication. After all, if we look solely at percentage request, the operator might have only done one client each day but if every one of them asked for her or him by name, they’d be running at 100%, even though their column was practically empty. None of the KPIs can be looked at in isolation. They must all come together to be accurately interpreted.

Teaching salon owners what the figures mean is far more important than telling them how to get them. Analysing the data is the critical bit, not flashing about software reports that are largely irrelevant. Because in this challenging economy, none of us can afford to be accidental business people anymore.

Hellen Ward is managing director of Richard Ward Hair & Metrospa in London, one of the most profitable independent salons in the UK. She is beauty ambassador for The National Beauty Federation (NBF). Send your feedback to hellen@professionalbeauty.co.uk