There is one simple rule in the world of business: the money you earn needs to be more - much more - than the money you spent on business management. This might seem useless to discuss, but from this simple sentence we can develop a reflection that too often is underestimated: to increase the profit of your business you can:
- on one side, try to earn more and more money;
- on the other side, try to cut costs.
These two elements together are what make your business grow exponentially. This is why knowing cost-cutting strategies is just as important as knowing how to grow your business income or find new clients. In this article, therefore, we’re exploring how to cut costs in business so that, as a direct consequence, you can increase your business profit while also reducing waste.
Cost cuts hair salon: why do you need to reduce the costs?
As we only mentioned in our introduction, a cost-cutting strategy in your business will lead to two major benefits:
- It will help reduce waste. Reducing waste isn’t only helpful for your pockets, it is also important for environmental and sustainability reasons. Keep in mind that people - and therefore your clients - are more and more sensitive to the planet’s health.
- It will help increase your profit. As you know, profit is the difference between income and expenses. When expenses decrease, your profit will consequently increase.
7 best ways of cutting costs in salon business
1. Avoid overstock
If you always pay attention to having everything you need for your work available in your salon you are on the right path but this shouldn’t lead you to a mistake: overstocking. Overstocking is useless (you’re spending too much for no reason) and it also leads to waste: many products deteriorate with time and if you buy too many of them, you’ll be throwing them away without even using them.
2. Buy smart
Running a salon requires an investment. The investment is constant because, other than purchasing anything you need to furnish your hair salon, you need to constantly buy the tools and products you need for the treatments you offer to your clients.
The strategy when it comes to supply shouldn’t be to buy cheap but to buy smart. What does it mean?
When you buy cheap you’re buying low-quality stuff. With time, clients will realize you’re using cheap and low-quality products and will prefer other hair salons.
When you buy smart, you’re constantly opting for the best value for money: quality products that are available at the best prices so that you can optimize your resources. However, how can you make sure you always get the best deals?
The best strategy to buy smart is to rely on a supplier that makes resource optimization its own aim. Omysalon is, for this reason, the most recommended supplier for hair salons.
It is a growing company that not only specializes in providing hair salons with anything they need (from equipment to products) but also in providing hair salons with the best deals: the top quality items and the best prices.
Omysalon also helps you cut costs in another way. Because their catalog includes many categories of products (equipment for your salon, furnishing, tools, products, and more…) you can order anything you need from the same company. This way, you’ll be saving money on expedition costs: instead of having many, you have one expedition for everything.
3. Reduce waste
How to reduce waste? There are countless strategies for reducing waste, but the most important one is this one: make reducing waste a way of thinking. Reducing waste should be a principle in your business that your entire team should share. When reducing waste is a principle, you and your team are going to apply it in everything you do.
4. Avoid overstaffing
One of the main costs you have, when you run a hair salon business, is staff payroll. Make sure the number of people that work for you and that are working at every hour is just what is needed to ensure a nice service to your clients.
There is no reason to have two hair stylists, for example, working when you have scheduled one person at a time for the day. This is highly important because expenses connected to payrolls are quite high.
5. Automate processes
In this era, we can count on software for many things. When it comes to business, the software is helpful because it helps you automate many processes. Why is this important?
- Software makes fewer mistakes than humans
- Software work faster than humans
- Software can replace human work
- Software costs less than a human payroll.
Using software means working better and cutting costs.
The more you know the less you’ll need to hire a consultant. For example, when you need a website for your hair salon, you have two options:
- hiring a web designer
- learn how to build a website and do it yourself
Of course, with the second option, you can save tons of money and cut the costs. However, make sure that, whenever you realize you aren’t qualified or capable to do a professional job, you hire a professional. Quality is always a priority in business.
7. Be aware of your expenses
Of course, if you want to manage your budget wisely you need to be 100% aware of where your money is going. So, last but not least, one of the best cost-cutting strategies is careful accounting.
Again, you can use software to help you with that: keep track of anything you buy or spend for your business. This way, you are always aware not only of where your money is going but also of where you’re spending more or too much. Cutting costs will become a lot easier.
With this article, we’ve discussed the importance of cost-cutting strategies and we’ve also provided some of the most important strategies as well. Now you are more aware of the importance of reducing waste, optimizing your resources, and cutting costs. And you also know how to do it!