GOALS: To reverse the loss making trend and to grow the business to better profitability
BUSINESS IN PROFILE: This business is a hair and beauty salon located above a pharmacy just off a High Street. The business had 5 staff varying from the owner, who still undertakes hairdressing to salon junior
THE CHALLENGES: This business was losing money, made worse after a member of staff joined the business briefly, took the revenue up to a point where VAT registration was necessary, and then left, taking with her a number of clients. The business owner was working long hours while not being able to take a living wage from the business.
THE STRATEGIES: The first step was to review pricing and where possible make some increases in order to increase the direct margins. While in a competitive market this was difficult to do, but by promoting staff in line with their experience it was possible to earn more from each sale.
Staffing levels were reviewed and redundancies made, which reduced the overall costs of the enterprise to a point where the business became fully profitable.
Management accounts were put in place which enable the business owner to plan for expenditures and anticipate difficulties should they arise
The business owner suddenly needed to plan some time out from the business, and so processes and tools were put in place so that the staff could take responsibility for activities in the salon, and for the business owner to monitor their effectiveness.
THE OUTCOMES: The staff now feel empowered to manage the day to day running of the business, which has turned from loss to profit. The business owner is now able to develop new strategies within the business to grow it further into the future.
“It hit me this morning as I was paying some bills that I actually have the money for all my large bills such as PAYE, rent and VAT without stressing and thinking "Oh no I need to get £3000 in 5 weeks!!!" ( you may recall that one!!).
I know that a large part of this is due to you organising a) my finances and b) me”