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Survive the credit crunch


You can look at last year’s accounts and find all the regular payments listed there.

Then you divide this by the average price of a service

Monthly Costs (£12,000)
---------------        = 200 Clients a month
Average Charge (£60)

On a six-day week there are an average of 25 days a month =  8 clients a day

Once you know this bottom line breakeven point you can plan what you need to do to ensure you reach that.

As no one is in business just to breakeven you also have to think about what profit you sensibly need to make and the cost of each service. To do this add to the top half of the equation the profit you need to make – say £10,000 – and deduct from the bottom line the cost of the service.
NB: if the average figure includes product sales remember to add that into the average cost.

Monthly Costs (£12,000) + Profit Required (£10,000)
----------------------------------------------------      = 408 Clients a month
Average Charge (£60) - Cost of Service (£6)

So, using the same day average as before, you will need 17 clients a day

Last but not least it is also good to look at what the opposition is doing around you. If a lot of salons are making special offers and bundling services and that is affecting your business then you may have to start fighting fire with fire.

But if you find that your client numbers are holding up then hold your ground on pricing. Instead, ensure you make an even bigger effort to keep customer service levels high because that is why the clients are staying with you!  endbullit.gif



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