This week our resident business coach Irene Moore answers a dilemma from a salon owner who is deliberating on whether or not to open up another premises.
Q. I’ve been running a hair salon in a south London suburb for almost 10 years, and although business is going well, I’m thinking of expanding. I’ve noticed that our beauty treatments are getting increasingly popular, and we currently only have a small room in the back of the salon to do beauty treatments, and the room is often full and on some occasions, does better business than the hair side of things. I’d love advice on whether to open another salon on the same street specialising in beauty only as there’s obviously a great demand, or do I keep everything under the same roof, even though it sometimes means turning customers away?
Irene says…Firstly, congratulations on the success of your business! This is a great position to be in. Expansion is a huge decision and shouldn’t be taken lightly. Whilst you may be seeing a peak in treatment sales this is something you need to track consistently before making any major decisions. Have you explored the financial implications of expanding, in terms of staffing and overheads? Is the demand sufficient to fuel a whole new space? Are you in a position financially to fully staff an additional space? Team, licences, decor and the equipment needed?
Before making any big moves I suggest you to try and maximise your new treatment to ensure it is sustainable. Explore exactly which treatments are most popular and the most profitable in terms of delivery (materials, equipment and staffing).
You may also want to consider ways to offer ‘speed/mini’ versions of this treatment (if it is viable without compromising on the customer experience) so you can try scale how many clients you can serve in any one day and not turn them away.
Then you should consider what you can do to cement your relationship with these new clients, such as a customer loyalty scheme on repeat treatments. This will not only encourage them to they keep coming back to you for the service, but also give you a database of people that you can share the news with if you do decide to expand. You can learn more about easy customer loyalty schemes here: http://bit.ly/2EvFbW0
There is one last thing I want you to consider…
The best lessons we ever learn in business are from our customers. If demand is there for treatments, and it is becoming more profitable than your hair services, should you be thinking about evolving your existing offering? For example, could you release some hair seats to create another treatment space?
Just a thought
Irene Moore is a Business Coach & Brand Consultant from London. Connect with her on Instagram @irenemoore_ and @90daystartup and visit IreneMoore.com