Industry • Best Practice
5 Signs Your Beauty Business Is Primed for Next-Level Growth
Jul.26,2021By Boulevard Staff
Analytics and reporting are fundamental to understanding if your operation is ready to expand
Timing is everything. Miss that green light, and you’re late for the meeting. Rush the punchline, and the joke falls flat. Much of success in life comes down to figuring out when the time is right. And the same is true for the beauty industry.
For the entrepreneurially-minded, the answer to the question, “Is now the right time to grow?” may always feel like a yes, but that feeling needs to be supported by some clear evidence. Whether you’re thinking of expanding an existing salon or purchasing a new location, the decision to invest in growth is a big one that has real risks.
If you’re looking for a short list of signs that your business is ready for a big leap forward, then look no further. Here are five indications you’re primed for next-level growth.
You have the data and tools
The legendary business thinker Peter Drucker once said, “You can't manage what you can't measure.” When it comes to growth, the message behind the icon’s punchy advice is clear: You cannot go anywhere if you don’t know where you are.
Modern beauty businesses are mixed reality — with one foot in cyberspace and the other on solid ground. People can pay with cash, card, or their phone. clients can book an appointment with a click or a call or just walk in the door. Every business operation is more complex and every decision more difficult because of how many means there are to each end.
This thunderstorm of activity means it’s critical to use systems that make understanding your business simple. You want to have a clear line of sight into your revenue, expenses, staff performance, product sales, hours booked, etc.
Without the proper information flows, analytics, and reporting, you really can’t know what’s working and what isn’t. It’s also impossible to tell if you’re ready to grow — or manage the effort once you decide to scale.
But if you do the data and tools set up, you’re in an excellent position to take off. Your systems should be capable of delivering reporting insights at every level of your business (for more on salon reporting, check out this post).
The growth is there — and so is the cash
How’s your bottom line? As long as you’ve got the right tools in place, you should have a solid grasp of essential metrics like profits, cash flow, and customer lifetime value. Do an in-depth analysis of the business. If you’re in the black and that gap is getting wider by the month, it’s a great sign that the time for growth is now.
One useful measuring stick is a 13-week cash-flow model. Looking out just over a financial quarter, the model compares your ongoing costs vs. your expenses to see if your operations are sustainable. This allows you to understand your capital needs and address issues before they derail your growth plans.
Speaking of capital, it’s also wise to have a fair bit of money in the bank. Financing an entire expansion through debt isn’t the way for everyone, and you’ll likely want some cushion should things not turn out quite as planned. You don’t have to have enough put away to fully back your plans — but it’s not the worst idea either.
You have the right people and the proper training
Can you imagine yourself working alongside your team for years to come? Does your staff have the right experience, training, and vision to help you as you take the next steps? No matter how obvious it sounds, it’s easy to forget that a business is its people. If you feel like there are significant gaps in your star lineup, then take the time to fill those holes. It’ll pay off when you decide to flip the switch.
You’ll also know you’re ready for growth if your employee training program is working well. Once the core group is in place, you’ve got the leadership infrastructure to expand. But scaling often requires the ability to quickly turn new hires into effective team members, and for that, you need a polished training program.
This is an essential box to check before you invest heavily in marketing or opening up another location.
You’ve got a replicable system
If there’s no one you can trust to do the things that keep the lights on and customers happy, then you are your system. This not only makes expansion almost impossible — but the single point of failure also leaves your existing business vulnerable.
From hiring to sales training, you’ve got to have efficient processes in place for all your core operations. And don’t forget to document! You’re ready to grow when you know you can replicate your success from scratch and without you.
One quick note: Systems includes company culture. The vibe of your beauty business is an integral part of the service, so keep that in mind as you eye expansion. Encoding your ethos in the company’s literature and hiring practices will help ensure every location you open feels welcoming to your clients.
You’re hitting your stride on social
Social media can be a boon for beauty businesses. The inherently visual nature of the service is a match made in heaven with most platforms. That said, online fame doesn’t always translate to real-life foot traffic in the most straightforward way. Don’t get discouraged if your first few hits on social media don’t blow up your appointment schedule. Sustained interest online will find its way to your bottom line. If your posts continue to cause a stir, then it may be time to start thinking bigger.
While your stylists are artists, they’re also mini-brands. Make sure you're following your stylists on Instagram, TikTok, etc., and ask them if you can do engagement audits to see how the business is doing. Steady upticks in likes are a good sign, but comments and saves provide the clearest signal. If the online community around your beauty pros continues to grow, then there’s a good shot you’re seeing the future of your salon or spa.
If you hit it big and go viral, it’s important to make the most of the surge in engagement while it lasts. A well-timed investment in your marketing at peak points of interest can turn into long-term customers out of casual fans.
The economy’s moving in the right direction
But don’t just look at your shop. It’s also a good idea to look at market trends — locally and nationally — to see if the winds are blowing in your favor. Regardless of how your business is doing, you may want to exercise caution if your city’s economy is souring. It can take time for financial stress to play out in a region, and you don’t want to commit to the risk of growth when you’re worried the market will be there.
Although the news can be a great way to get a read on the economy, you might also want to go directly to the data and come to your own conclusions. The St. Louis Federal Reserve’s FRED is a fantastic source of financial information. The site offers a massive variety of trend data broken down by state, region, and beyond.
It can be an overwhelming resource, but here are a few trends to monitor that can help you get a quick sense of the direction things are going:
GDP: the size of the economic output.
Inflation: the buying power of money.
Unemployment: the percentage of people out of work.
In general, if GDP is around 2%, inflation is about the same, and unemployment is near 5%, you’re looking at a strong economy. These are not hard and fast rules, as a movement in the right direction could also indicate that the market is heating up.
Do you want to start expanding but don’t have a technology partner?
Boulevard was built to help your business achieve profitability at scale without losing an inch of sanity. See for yourself! Get a free demo today.