Market reports show the American salon industry is set to enjoy steady growth over the next 5 years. But as every salon owner knows, an expanding market doesn’t guarantee success. 

Staying profitable takes more than just great services; it takes financial literacy, strong leadership, solid marketing, and effective operations.

For long-term success, salon owners need to get up into the crow’s nest of their business.

The View From Above

Let me explain the metaphor: Your business is a ship out to sea, and while it is afloat, you’re below deck with everyone else helping to keep it that way.

By being below deck, you are unable to see where the ship is going. You keep missing opportunities or running into obstacles (and taking on more water).

The solution is to climb up into the crow’s nest of your business. From here, you can see obstacles that are in the distance and steer to avoid them, or have the visibility to spot opportunities and steer toward them.

The path to getting this kind of visibility is different for every owner. It might include adopting new systems and processes to leverage your time; acquiring stronger powers of delegation; or simply finding time for yourself to come up for fresh air and gain a new perspective.

Whatever the case, the goal is to change your mindset from one of constant reactivity to one that is steering toward and planning for the future.

Here are the five most common mistakes that salon owners make when they’re down below decks.

1. Flying Blind Financially

Having a comprehensive understanding of where your salon’s money is going — and where it will need to go in the future — is critical. Flying blind financially is never a good strategy.

Creating a holistic pro forma is step one. This a malleable financial forecast that uses historical profit and loss data to predict performance that can be targeted to align with your vision and goals.

But P&L data alone can’t predict or paint the whole picture. Areas of the business that need to grow must also be reflected, including the owner’s time and productivity, recruitment costs, marketing spend, and operational expenses.

Fully integrating these systems into a financial model that projects 12-18 months ahead is crucial to the long-term financial health of a salon. This model can then be used to adjust spending and allocate resources in real-time.

Let’s say your model projects increasing monthly revenue by 25% in one year’s time. That’s great! But what else has to fall into place, apart from you collecting 25% more revenue?

Does this mean adding 25% more staff? Optimizing your existing team’s client load? What does this change mean for your marketing budget? Do you even have the footprint capacity to sustain this kind of growth? Are you able to negotiate better rates with your suppliers if you increase product volume? What effect might these savings have on your bottom line?

By analyzing the different facets of your business holistically, we begin to fill in the gaps that this growth model presents and address operational problems before they appear on the horizon.

2. Leading Reactively or Defensively

Opening a salon (or any small business) is a brave, terrifying step into the unknown. And the leaps of faith continue as you invest in marketing or facility improvements, expand the team, or trust a staff member to take over an important task.

Leadership can feel like a series of reactions to what is happening. This is when you must climb into the crows’ nest.

As an entrepreneur, it’s critical to remember the ‘whys.’ To do that, set top-line goals both personally and professionally, and make business decisions accordingly.

For instance, if your goal is professional freedom and more time with family, working 60 hours a week is counterproductive. If you find yourself doing that, it’s time to stop and make changes. Not a month or a year from today — but now.

As a salon owner, it's worth it to carve out the time to take stock of on your own strengths and what it is about the business that sparks joy — what makes up your salon culture. It's critical to set aside your ego and acknowledge personal shortcomings.

If something fails, that is a call for introspection. The buck stops with you.

Asking yourself, “What can I do better?”, “What about my business can be improved to fix the problem we’re facing?” is far more effective than looking for a vendor, employee, client, or industry trend to blame.

This also means growing a thicker skin, if needed, in the face of criticism. "Negative" feedback isn’t negative if it helps you to course-correct.

3. Taking a Scattershot Approach to Marketing

A common pitfall among salon owners is to spend money on multiple marketing channels without a unified strategy.

In any business, marketing rule number one is to know your audience. This means promoting the right services to the right people with a consistent, engaging strategy.

Problems arise when salon owners chase marketing trends instead of looking to their own client base to know how to best communicate with people willing to spend money with them. 

The most important mindset to carry when devising your marketing strategy is: “All Roads Lead to Rome.” In whatever tactic you are employing for your audience, ask yourself whether this effort will logically and intuitively bring them to your door.

Consider your target audience and make educated guesses as to what will incentivize them to buy products or services: Special pricing offers? Expanded service offerings? Loyalty programs? If you truly don't know, the way to find out is through trial, error, and measuring what worked and what didn't.

It’s critical to understand your customer base and tailor marketing strategies accordingly. Otherwise your best prospects will get lost, never making it to your door.

4. Wasting Time on Tasks That Can Be Delegated

A salon owner wears so many hats that it can sometimes lead to neglecting important tasks that require their full attention.

It can be hard to identify what is a shiny red ball (simply a distraction) and what is a golden goose (a task worthy of the owner’s time).

As a salon owner, consider conducting an importance vs. urgency analysis for every task on your plate. If a task doesn’t fall into either category, it should be delegated.

Understanding the value of your time is critical. A quick financial calculation to determine your ‘hourly rate’ as the owner is a great baseline: someone valued at $75+ an hour shouldn’t be opening the mail or dusting the reception area.

Empowering staff to work independently, delegating administrative tasks, and leveraging reliable salon management software allows a business owner to stay up in the crow’s nest and focus on strategic decisions and critical tasks.

5. Overlooking the Value of a Good Employee

At the end of the day, a salon is only as good as its personnel. A highly skilled, personable staff is what keeps clients coming through the door.

Hiring the right team, and ensuring that team feels supported and valued, is critical to the client experience. 

Employees respect direction and guidance. Providing clear expectations to them on workload and productivity — plus the coaching and management to help them get there — will ensure a healthy relationship.

Bilateral performance reviews are a great tool to foster communication and job satisfaction. The owner provides feedback on performance, while the employee provides feedback on work environment and whether they feel supported and able to succeed.

(And yes, that means referring back to the #2 solution above … specifically the part about being able to take criticism.)

Owning and running a successful salon is not easy. By taking a step back to set high-level goals and prioritize business fundamentals, owners can safeguard the long-term success of their business while keeping a healthy balance between professional goals and personal passions.

TJ Slattery is the founder and strategic advisor of Crowsnest Consulting. As a lifetime entrepreneur and small business owner, he leverages his boots-on-the-ground experience and tenure as a business advisor to partner with small business owners and propel their business to the next level.