$1 Million Salons Aren’t Always Profitable!

“We’re bringing in $1 Million in revenue but not making any profit!!”

 

If you’re bringing in $1M or more in revenue yearly but still aren’t profitable, that’s a massive problem! To your team, you look like you’re smashing it… they’re bringing in clients, rebooking, selling products…

But then when it comes to looking at your numbers, you’re in (or very close to) the red!

Because when you’re not making enough profit, you must run a VERY tight ship. One too many sicknesses or cancellations could easily tip you into the red and cause you to operate at a loss! This is not only super stressful but also not how Salon CEOs should run their business.

When you’re making $1 Million in revenue but not making enough profit, you’re actually stopping yourself from paying YOU what you want and deserve.

This is $1 Million Salons Aren’t Always Profitable!

You Don’t Know Your Numbers

 

Too many of you are growing and captaining your ship BLIND… 

 

Remember the Titanic… it's fair to say, back in the day access to reliable steering and mapping technology was maybe more of an excuse than it is today…  So being a captain of a ship and not having a map, and a compass is really getting rather close to negligence.. wouldn’t you say?

 

Without a clear understanding of how money flows through your business, it’s all too easy to end up with a cash-flow crunch, like wondering each payday, if you’ll have enough…  or being underfunded for growth.

 

Many Salon owners overlook installing a thorough financial plan and avoid their numbers altogether because they feel intimidated or think, "I’m just not a math person."

 

But growing without this financial insight is truly driving blind.

 

If you’ve been WINGING it and managed to get this far without understanding your numbers, imagine what’s possible when you do!

 

So having a dashboard to steer you towards profit is essential. We call it the CEO Dash™.

 

At $1M in revenue, a solid profit plan should be generating real profits because money doesn't just fall into your lap. It needs to be intentionally prioritised.  Money needs a plan otherwise it will just call into the cracks and crevices.. and you’ll be left standing wondering where it all went on pay day.

 

Understanding your numbers needs to become your new focus.

 

Money Mindset

I hear too many comments like:

• “I only take what I need when I need it"
• “Money is not important to me”
• “I need to pay my team more before I get paid more… They work hard!”
• Or you might not believe you need, want, or even deserve to prioritize profit… leading you to spend impulsively or overpay a team that may not actually be delivering!

 

At the same time, when there isn’t enough to pay the wages, you’re feeling stressed and worried about making ends meet. You’re just making excuses!

 

But, sometimes the problem is flipped… I’ve worked with many owners who are ridiculously overpaying themselves because they think: “I work hard, the business owes me”. 

 

When you don’t know your numbers, you not only risk over (or under) paying yourself and your team, but you also don’t know when it’s appropriate to give your team a pay rise!

 

I recently had an Owner who had the wrong numbers in their CEO Dash, neglected to pay attention after delegating the task but it gave her a false sense of reality. Turns out, after we corrected the numbers, she had super high wage costs… 62%!

 

Her team were smashing their targets and winning, but when we dug deeper we learnt that it was actually her wage that threw everything out of wack! Whilst getting paid a really high wage, she was worried that her business wasn’t profitable and was looking at ways to cut costs.

 

So, if you feel entitled to every dollar or believe you deserve a big payout without understanding the business profit vs what it can afford to pay its owner... You may find yourself in hot water!

 

Your mindset around money, whether it be you do or don’t deserve more money, is just as important as understanding the actual numbers. If you notice that your mindset around money is a roadblock to comfortably being profitable and you don't have confidence around that, then some inner work is essential.

 

One way to know is if you have a physical reaction to managing or dealing with money. If money feels stressful it's a good indication that you have some money mindset work to do

 

I’ve been there myself. Growing up, my single mother was on a teacher's salary and my dad worked relentless hours in his own business. I was taught that money doesn’t grow on trees and one must work hard and long hours to make ends meet... It didn't serve me well in the early days.

 

Over time, I’ve earned money, lost it, spent it, and learned to make it again… without spending it all. I learned to save, invest, and ultimately grow. So I know it's a journey but one that must be taken!

 

Understanding that you can actually change your mindset might be the first step, it just takes focus and intention.  A healthy and intentional money mindset is the foundation of a profitable business. Just decide you’re going to be profitable!

 

Your Team Costs Are Too High!

 

If you’re not seeing profit at $1M+, your team wage costs might be part of the issue. Margins can quickly get out of control if salaries are high without the appropriate ‘on the floor’ performance.

 

There are 3 reasons your WAGES bill might be out of control:

• Your team are not performing, they’re apathetic and not booked even after being there 6 months!
• Your wage pay structure & performance pay aren't optimised for BOTH parties to win
  • You need to feel confident that when your team is earning commission your business is in profit..
• Your pricing is out of wack and performance pay isn't optimised for BOTH parties to win
  • You might be robbing Jenny to pay Jemima!
  • Maybe your balayage services aren't profitable and they are robbing the profit from your haircuts?
  • So no matter  how busy your team are, you just can't make more CASH… as your pricing or your team performance is negatively geared

A good business and financial model has a structure:

• Ideally, team costs should be no more than 45%... like between 35-45%.
• Without a solid financial model and a high-performing team, 2025 and beyond could bring new financial challenges.

When I realized this in my own business, it took me years to develop a profitable model that worked… where I could be PROFITABLE while feeling great that my team were also in a position that if they wanted to (because not everyone wants to) they could earn lots!

 

It took me 5 years to upgrade my team, and their performance and I designed the $100k Career Pathway™ fondly known as The DIGAPR method - which gives you the tools to:

• Pay your people properly and build them a $100K Career!
• Become a $100K Mentor and lead your people to perform whilst also being the leader they need you to be by installing the Talent Development Engine™
• Install the $100K Client Program which is a progression plan that aligns with the growth journey of your team.

 

It’s about developing a high-performing team that can serve high-value clients and ensure your business thrives!

 

 

$1 Million Salons Aren’t Always Profitable… but that doesn’t mean you can’t become profitable now!

 

Even with $1 Million in revenue, it doesn’t mean you have to know how to do everything, it’s ok to be in a place of learning and growing.

 

You just need to start!

 

Just a quick recap:

• Not all Salons are profitable
• There are 3 reasons why you are not profitable
• You need to start making a change now!

 

Salon Owners are you ready to become a $1 Million+ Salon WITHOUT working more hours… did I mention you can also reach $1 Million+ by working LESS hours? 

I created The Salon Mastery Programme for Salon Owners, like you, to achieve Freedom AND Profits can WITHOUT stress and overwhelm.

If you want to join this community, please reach out, I’d love to chat. Let's find out if Salon Mastery is a good fit for you.