Profit: Understanding it and making more of it in the salon industry.
In today’s episode, we’re going to focus on one of the most misunderstood concepts among salon industry professionals: the ‘P’ word (i.e. PROFIT).
Reliable data in the salon industry is often hard to come by. But, what is usually agreed on is that when it comes to profit margins, the average salon has a net profit margin of somewhere between 0-8%. The good news is that with a little bit of education and thoughtful strategising, that is something we can change!
So, if you’re unsure what exactly gross, net, and operating profit are, why you need to make a profit, or how to make your business more profitable, you’ve come to the right place!
In this Episode:
[01:37] The relationship between profit and return on investment.
[03:15] Why you can think of profit as a reward.
[04:02] The importance of profit for business growth.
[05:02] Additional benefits of ensuring your business is profitable.
[07:19] Why profit is such a misunderstood concept in the salon industry.
[08:58] The definition of profit.
[10:03] Typical salon business profit margins in comparison to those of other small businesses.
[10:45] The difference between a lifestyle business and a profitable business.
[12:03] Understanding gross profit.
[13:17] Understanding operating profit.
[13:34] Understanding net profit.
[15:32] Two strategies for increasing profit.
[16:51] How to develop a strategy for financial success.
Thanks so much for joining me this week. If you enjoyed this episode, please leave a review. Ratings and reviews are extremely helpful and greatly appreciated!
They do matter in the rankings of the show and help other people find my podcast.
I also love to hear what’s been helpful and what you love about the podcast! Just click here to review, scroll to the bottom, tap “Ratings and Reviews” tap to rate with 5 stars and “Write a Review” and let me know what your favourite part of the podcast is. Thank you for your support!
Until next time!
Antony
Links and Resources:
Grow My Salon Business
Website | Facebook | Instagram | TikTok | YouTube | Money Course