Jim Fixx, the author of the best-selling book, The Complete Book of Running, touted how running could extend someone’s life by six to nine years. Yet, Jim, a man who started to run at the age of 35 and shed 50 pounds, dropped dead at 52. Why? He didn’t pay attention to his diet.

And just like Jim Fixx, seemingly successful salon’s haven’t examined how delivering hair color services – a mainstay of salon revenue – may actually be clogging the cash flowing from the bottom line.

There are three main reasons that salons are not making money with hair color – even though the owner believes otherwise.

So let’s move right into to the first one:

  1. The Pricing for Hair color Services Isn’t Right

    A salon owner understands that the higher price of hair color services translates into more profits for her business. Especially since the product manufacturers, (a powerful force in an owner’s business life) reinforce the idea by telling the owner how much more money they’ll make by building their salon’s hair color business.

    Why? Not only because of the high price they can command for doing the actual hair color service, but also because of the increased need a hair color client has to visit the salon.

    Once committed to color she’ll visit every four to six weeks – rather than the six to eight week visitation pattern of a regular styling client .At every turn the salon owner is met by the message of “you’ll make more money if your salon does more higher priced services.”

    And what salon owner doesn’t want to hear the message of “more”?

    It’s not only the manufacturers who broadcast the message. It also comes from the trade magazine editorials, the exhibitors on their soapboxes in the trade shows and the manufacturers of home coloring kits who juxtapose their product offering with the expensive salon color services. The high priced buzz is all around.

    But the buzz belies the fact

    But the buzz belies the fact – most salons are not making money – or at least the type of money

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    One big reason for bleeding bottom lines is most owners haven’t priced their hair color services from the bottom up. From the bottom up means to start with end in mind – the end being profitability – and then working upwards through the costs to deliver the service before backing into the price of the service.

    And following the bottom up pricing method can automatically lead to profitable hair color business provided that a couple of other things are in place. Which brings us to our second reason.

  2. The Salon’s Supply Ordering System May be Draining Profits Too

    Why? Because ordering is usually based on the free-form system of eyeballing the inventory – rather than using a formalized, by-the numbers supply ordering system.

    This eyeball method comes because a hairstylist’s worst nightmare is recommending a certain color to a client. Only to have to disappoint her by not being able to deliver because the salon’s out of stock.

    The antidote to the nightmare? Filling the supply closet with every color in the rainbow – and suffocating the salon’s bottom line under piles of slow moving or useless hair color inventory.

  3. The Salon Bottom Line Blues

    At the same time the salon’s supply closets being piled high with hair color products – there’s also product being poured down the drain – costing the salon a ton of money. And why are products going down the drain? Because of two bad habits:

    • Bad Thinking Habits aka Theft – while not every salon employee slips a tube of hair color into her bag at the end of the day (to do Mom’s or a friend’s hair at home) too many do. Why? Because they justify it as a “perk” of the job rather than call it for what it is – stealing. And the owner, who’s using the eyeball system never knows its slipping out the door.
    • Bad Mixing Habits aka Laziness – then there’s the “Mississippi River” Problem of hair color. It’s caused by hair stylists not knowing how to properly mix the colors. They do not precisely measure what they need (using a scale) and measure product in grams rather than in oz.’s. Instead what they do is follow the manufacturer’s 1/2 oz. or 1 oz. markers on the tubes – why? Because its easier – and the manufacturer recommended it. As a result product literally goes down the drain.

The bottom line of these habits? Hair color costs per application are up to double what they should be – and profits that are half – if that, of what they should be.

In summary, hair color services considered by most salon owners as a big contributor to a salon’s bottom line – when examined closely, isn’t!

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