Feel like you’ve tried everything? Laura O’Hagan helps to fill in the gaps.
The current economic climate has many salon owners feeling they are walking a tricky, fine line. There is a feeling that “they’ve tried everything” without seeing their financial position change. From experimenting with social media marketing to investing in new treatments and equipment, many are not seeing a return on their efforts. The pursuit of the latest and greatest means powerful profit-generating methods often remain untapped or forgotten about.
Let’s talk about five easy to implement strategies that can transform your salon:
Put a cashflow process in place
Without a clear cashflow method, even a fully booked salon can struggle financially. Implementing a structured cashflow process ensures that revenue is allocated effectively, expenses and tax obligations are covered, and forces a salon to be run innovatively and efficiently. It also means those sneaky money leaks are plugged, and you always know where your money is going.
Price based on your business, not on competitors
Many salon owners set their prices based on what their competitors charge. However, pricing must reflect all costs required to deliver the service, including staff, GST, product usage, overhead and profit margin. A sustainable pricing model ensures every service contributes to your bottom line. Yes, you do need to check that you are within the market range. But often when I do a deep dive with clients in pricing, they haven’t considered the costs, their unique proposition, or whether a service is contributing to or draining the business.
Spend with purpose
Unnecessary spending is a huge silent profit drainer. Regularly review expenses and ask yourself: ‘does this contribute to growth (and how am I measuring that?!)’ or ‘is it required to deliver the service?’ Most businesses could reduce their expenses by 10% overnight without any impact on the service delivery. Both my clients and I have been shocked to find tens of thousands of dollars on annual waste in expenses that had not been noticed.
Profit-focused productivity
Maximising your resources – time, staff, and space – can dramatically impact profitability. Empty rooms, unbooked appointment slots and idle staff are not only missed revenue opportunities, they cost money, too. There are lots of innovative ways you can use these spaces without adding in staff. Measuring and managing staff utilisation rates (ie. booked hours over available hours) can clearly show opportunities to optimise productivity and drive increased profit.
Memberships and monthly recurring revenue
Predictable cashflow can ease financial stress, yet many salon owners hesitate to implement memberships. Recurring revenue models such as monthly facial subscriptions or tailored client plans create stability and increase client loyalty. Even a small base of recurring clients can provide financial security and ease the pressure of filling your appointment book each month. Consider ways you can bring this into your salon, creating a win-win for both parties. Focus on improved client outcomes rather than discounts.
Start small, stay consistent, and remember, the key is to shift your focus from just doing more to doing what truly matters.
Laura O’Hagan is the creator of The Profitable Salon System™️, a certified Profit First Professional, and a coach with a background as a chartered accountant. She helps salon and clinic owners grow profits and manage cashflow with confidence and ease.
Images: iStock/staticnak1983
This article originally appeared in the Issue 02 2025 print issue of Professional Beauty magazine. Read it here.