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Hair Salons: Are You Wasting Color? Here’s How You Can Find Out

Posted on: June 9, 2016 by Joel Paterson | Tagged as: , , ,

Often times in hair salons, the color room is where a lot of money is lost. Many hair salon owners/managers simply know what they need, and when they need it. Ask them if they’re wasting color, and they cannot tell you… The fact is, they don’t know.

Hair Salon Color InventoryIn all fairness, it can seem very complicated. Having a wide variety of partial tubes, and performing inventory counts, while other tubes are constantly being opened and utilized, coming up with an iron-clad system can be daunting!

To get a quick idea of whether or not your hair salon has a color waste problem, or worse yet, if color seems to be walking out the door; you can perform what we call a quick audit, to see how your process measures up.

This quick audit will not only give you an idea of your potential color waste problem, but also determine if your inventory and re-order process needs some work.

Here’s the scenario. Let’s assume you currently re-order color every two weeks. If you order weekly or monthly, simply take that into account while performing the quick audit below. (Note: Every salon should have a planned re-order schedule.)

Today is the day you are going to place your color order. You’ve performed your inventory count, or whichever method you use, to determine which colors need to be re-ordered.

Now, total up your costs for this new order. For example, you’re re-ordering 100 tubes, at $7.50/tube…. Your color order is $750.

Again, assuming you place your order every two weeks, take a look back at your total hair service sales, for the past two weeks. Your new color order ($750 shown above), should be somewhere around 5% or less, of your total hair service sales from the past two weeks.

Run down: According to the color tubes that need to be replaced, your color order is $750. Your total hair service sales from the previous 2 weeks is $16,480… Congratulations, you’re sitting around 4.5%.

($750 divided by $16,480) x 100 = 4.55 (approx. 4.5%)

If your percentage is slightly higher than 5%, you may want to take a deeper look. You may need to tweak your process or have a quick refresher with your stylists, so you can iron out the potential waste issue. If your percentage is significantly higher than 5%, chances are you have color walking out the door.

If you’re interested in learning more in regards to measuring key factors in your business, be sure to check out our Salon & Spa Suite. It’s an extremely informative service that helps salon & spa owners like yourself, paint a clear picture of your business, without complicated numbers or spreadsheets.

Have a topic you’d like us to discuss in the future? Contact us today, and let us know!