Hair Salon 90 Day Profit Makeover

How to Spot a Colour-Waste Problem in Your Hair Salon

Posted on: August 13, 2018 by Joel Paterson | Tags: Salon & Spa Tips

Things move very quickly in a hair salon, and it’s not always easy to identify potential problems with your colour room.

Sure, your software may be able to tell you what you’ve used, and how much you have on hand. And your physical audits of stock, can do the same. But the problem is, the software is only as accurate as the information that was entered, and physical audits are not only time consuming, but also prone to miscounting.

At Primary Target Media, we like to simplify these tasks for our hair salon clients, with quick ways to get an “overview” of their colour-room performance. After that, if a waste/shrinkage problem is suspected, we can help them implement new tracking systems to help them prevent future waste.

First things first. “Colour-Waste” isn’t just a matter of mixing too much colour, and leaving it unused. It can also be that you (or your stylists) simply aren’t charging clients for extra-product, when additional colour is used. Or, and I hate to say it, but you may have colour walking out the back door.

When push comes to shove, all of these things affect your colour “usage” in your salon. And that means, all of these things affect your profits. So, it’s important to know where you stand, in terms of colour usage in your salon.

The trick below, helps you get an overview of what you’re currently spending on colour. Then, if a problem is suspected, there are numerous ways to diagnose the cause of the problem, and fix it. We can help with that.

Ready for the quick trick?

First of all, let’s assume that your colour-ordering process consists of simply replenishing the colour used, since your last order. If you’re a little more “relaxed” with your colour orders, this trick may not be the most accurate… which means you’re simply leaving cost-measuring to chance!

The amount you spend on colour should generally be no higher than 5% of your total hair service sales, for any given time frame…. and no lower than 3%. If it’s lower than 3%, that simply means you’re not doing enough colour services in your salon (when compared to hair cuts, etc). So, with that in mind, getting an idea of your current spending, can be done pretty easily.

colour-waste-formula

So, let’s dive right in.

  1. Identify your last colour order date (example: 10 days ago).

  2. When you’re ready to place your next colour order, fill in your order sheet, and estimate your total cost. Set this number aside. We’ll simply use it for comparison.

  3. Now, add up your Total Hair Service Sales dollars since your last order date. (Example: $15,000 in hair services in past 10 days).

  4. Now multiply this total by 0.05 (0.05 represents 5%).

Example: $15,000 x 0.05 = $750

This $750 represents approximately how much colour you should have used in your salon, in the past 10 days (since your last colour order). Which means, if we’re simply replenishing what we’ve used in this time frame, today’s new colour order should be in the ballpark of $750.

If today’s order amount seems quite a bit higher than expected, you may have a waste/shrinkage problem. (Shrinkage simply means “loss”).

Make sense?

Try this simple and easy trick, next time you’re getting ready to place a colour order. It gives you a quick “on-the-fly” overview on how your colour-room is performing. If you’re satisfied with the answer you get, keep pressing on!

If you don’t like what you see, contact us today… we can help!