5 Ways To Handle Minimum Wage Increases At Your Salon Or Spa | ProSolutions Salon Software

5 Ways To Handle Minimum Wage Increases At Your Salon Or Spa

Surviving Minimum Wage Increases

21 states saw minimum wage increases take effect in 2017, not including other increases at the county and local levels. (For a list of current minimum wages, click HERE) With fierce competition, rising brick-and-mortar costs and thin margins, salon and spa owners are particularly sensitive to minimum wage increases. Here are five ways your salon or spa can handle minimum wage increases!

 

1. Reduce Costs

Before cutting payroll to make your margins, closely examine how you spend money and look for savings in your current costs. Here are a few things to consider:

  • Avoid supplies wastage by using only the amount of supplies necessary to perform treatments correctly, efficiently and expertly.
  • Use salon and spa product suppliers/vendors discounts effectively – make sure you aware of all deals before placing an order!
  • Send automatic SMS appointment reminders and confirmations calls to save time and money on telephone calls and your telephone bill.
  • Keep good control of your inventory and product tracking to avoid small emergency orders that often incur extra delivery charges.
  • Take advantage of your business software features to consolidate your software subscription expenses.

Transcend can help you reduce costs with detailed reporting, extensive inventory tracking, SMS text messaging, free email marketing, no gift card “per swipe” fees, and much more. Make sure to sign up for free training classes to learn more about your software and how it can help you reduce your current costs.

 

2. Increase Prices and/or Upsell

Increasing prices is the most obvious option for dealing with wage increases, but avoiding them can help you maintain a competitive edge on the competition. However, if raising prices is the only way to keep your business alive, then you have to raise them.

How you increase prices is up to you. Some businesses apply a certain percentage to all services across the board, while others add a few dollars to each service.  You should also consider varying price increases based on customers’ needs. For example, you can keep “The $20 Press and Curl” and other popular, less-expensive services while only increasing the price of more high end services to ensure you don’t drive away more cost-conscious clients.

Also, make sure your employees are trained on how to prescr prescribe product to your customers and the art of upselling services to current clients.  This can help you increase your average service and retail tickets to boost your bottom line.  Transcend’s Fortune Teller can help you project the impact of an increased average ticket sale and just how much you’ll need to absorb the minimum wage increase in your area.

 

3. Reduce Operating Hours

Take a look at the hours you have employees scheduled and correlate those hours to the wages you’re paying. Do you need employees covering these hours? Do you even need to be open or doing business during some of those hours? Your employees keep your business running profitably, and you want to pay them fairly; but if your budget can’t cover a minimum wage increase, you may need to cut back their hours or your hours of operation.

Another option is to set overtime limits for your employees. Non-exempt employees who work overtime must be paid one-and-a-half times their regular hourly wages. That can add up really quickly if overtime hours are unlimited!

 

4. Streamline Your Services and Establish a Membership Program

Some beauty and wellness services have terrible margins, or require extensive training and expensive supplies. Take a look at your service offerings and consider cutting underperforming services that can save you on inventory costs or other overhead items.

Also, consider establishing a membership program to help boost your bottom line. With minimum wages increasing, most of your competitors will be increasing their prices. Membership programs can help you offer a discounted rate on services to help you maintain a competitive edge and provide a base income that can help you maintain your current staff.

 

5. Outsource Your Social Media Marketing

It may seem counterintuitive to spend money as your labor costs increase, but social media marketing is a proven method for increasing sales and patronage to your shop. If you are paying your receptionist or other employees to maintain your social media accounts, you’re likely overpaying and not seeing a return on your investment. Consider outsourcing the day-to-day management of your online accounts by signing up with an online marketing firm like Social Beautify.

 

About the Author

Matt is VP of Sales at ProSolutions Software. With over 20 years experience in the beauty industry, Matt teaches classes on topics including branding, management, marketing and advertising.