Do the Math

by | Farr Factor

Want to be shocked by the mathematics of your salon?

Okay, let’s assume that your salon generates $150,000 annually, with 14 tanning systems, a per-tan average of $7.50 and 20,000 transactions or “tans” in a 12-month period. Stay with me, because this will be an eye-opener.

At an average of 12 minutes of tan usage each, those 20,000 transactions equal 240,000 tan-minutes in a year. This sounds like a lot. But now let’s calculate the potential tan-minute inventory to see how much you’re using compared to how much you could be using.

Let’s assume that the salon is open from 9-9 Monday thru Saturday and 9-6 on Sundays, or a total of 81 business hours a week. Converted into minutes, that’s 252,720 minutes a year. But that number is not your potential tan-minute inventory. The total number of tan-minutes available in a year is the product of the number of minutes the salon is open (252,720) and the number of units in the salon (in this case, 14). Multiply 14 by 252,720 and you get 3,538,080 potential minutes for sale over a year’s time in this “average” salon. But this facility only sold 240,000 minutes of its potential 3,538,080, or about 6.8% … 6.8%! In other words, the salon has 93.2% of unused inventory. Shocking? You bet it is.

What’s the message behind the math? The most expensive tanning beds in any salon are those that are EMPTY. If this salon merely increased bed usage sales by a mere 34%, it would be knocking on the door to becoming a $200,000 per year salon and would still be using only 9% of all available equipment usage inventory. BTW – the extra $50,000 in increased revenues would cover a lot of bills in the third and fourth quarters of the calendar year. Now, I know that there are peak months when the available inventory of tanning minutes is all gobbled up and people are waiting in line. (The key to winning in that situation, which is also good customer service, is to move the waiting tanners into an upgrade unit that is maybe sitting empty. That helps your usage go up but also sets up your salon guests for a higher-level experience and hopefully, upgraded sales.)

So, what am I pontificating about with all this math hocus pocus? Every salon needs to concentrate on getting more bodies in the door and to get them there more frequently. That’s why setting up a sales team to hammer home EFT sales is critical, because the EFT member will use the beds more often and more than likely be more satisfied with their tanning experience outcome. Aggressive marketing comes into play here, as well. And January and February of 2015 is all about market share, market share, market share. Free-tan weeks – contests with media that bring in tanners with a week of free tans – can be effective at getting customers to snap up some of your unused tan-minute inventory. My bottom line is and has always been this: spend less time on cutting $50 from your payroll and spend your time on the top line! Revenue is king and determines your future.

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