REALITY BITES – STEPHEN ARRIZZA – WORKING ON YOUR BUSINESS – 151019


Hi, welcome to Reality
Bites and everyone at AHC. I’m Stephen Arrizza from Basin Haircutters and Basin Education in Adelaide. And I just wanted to share with you today something that I think is one
of the most important things that we need to be doing as salon owners. And something that can
really make a huge difference in our business. And that is having dedicated
time to spend on our business or TOB we refer to it
as, Time on Business. I think for many many years, we’ve heard this at many different business courses and seminars
and people talking about “You just need to step
away from the chair. “You need to spend more
time on your business.” But you know, that’s really
hard as a business owner because we know that that’s
the way we make our money. But after hearing it several times I thought “You know what, it
must be something in this.” So we decided, you know
we really needed to start to dedicate some time on our business. And I think probably what
really made us do that and dedicate special time was early on in our business
we’d set ourselves a goal. We wanted to turnover a million dollars. And the year that we did that, we were so excited to reach our goal until at the end of the financial year we’re doing the figures
with the accountant and we were sort of looking and going “Well, where’s our money?” You know we actually
made less money that year than what we had previously. So I realised it’s not
just about turnover, it’s more about profit. So once we decided to sit down and really start spending some
quality time on our business, not, you know, Sunday night
I must get to that. Yes? You know or on Sunday afternoon I’ll organise a bit of a promotion. It becomes something you
don’t look forward to. So we decided that we
would spend a few hours at the beginning of our work week. No clients, go to our
favorite coffee shop, something we really enjoyed, and we’d sit down and
we’d plan out our week, our month, and our year. And it’s now grown to
us spending a full day working on our business, and also a couple of hours on
the Friday morning as well, just ticking off all the lists and everything that we’ve created. So I just want to go through
and you know, maybe make, give you something a bit more visual as what that would look like. I’ve got trusty little
Ikea tape measure here. 100 centimetres long, represents 100 percent of
our takings, our revenue. So this tape measure
represents our revenue. And I want to give you some
figures that we’ve seen, and almost been at as well. And I know many salons sit at
these figures or even higher. On average salons across Australia will have a wage bill that
is as high as 50-56 percent. So what does that look like? If this was our takings for the year by the time we take out our wages, let’s go up to 52, let’s
call it, 52 percent. Meet somewhere in the middle. That’s gone straight away. You know we see all this money we’re making but that’s gone in wages, and
that’s normally for our staff. The other thing that’s a
big expense in our business is our products, our colours, our shampoos and that normally sits at
around the 15 percent mark. So let’s just have a look
at what that looks like. I’ve counted up here, made a little mark and that’s where it sits, that’s another 15
centimetres of tape gone. We still haven’t made our money yet and we’ve still got more
things to account for. You know the other thing is sundries – that’s our bills, our phone, our power, all the other little
things that we have to buy to run our businesses. That also sits at about 15 percent. That takes us up, let’s have
a look, up 10, 12 , 15… It’s getting smaller, isn’t it? So that’s gone. The other thing that we have to remember is we’re paying rent. And that varies across Australia, and whether you’re in a
shopping centre perhaps. But on average sits around 10 percent. So we’re gonna count up another 10… And all of a sudden, we can see that if we’re lucky, and if we’re getting it right, we’re not left with very much. So when we looked at that
we decided: That’s it! We need to look at some ways, you know, if we could talk about
increasing our revenue, getting a few extra clients, as salon owners I think
we get very excited about that sort of stuff. But really we could
spend a couple of hours, a few hours every week, and look at how we could reduce costs. You know, making our staff more
productive, so many things. So, even imagine if we started to go, this was our wage bill. And we could just save
a couple of percent, you know, come up with something, and a way that we could
save a few percent, we’ll make our team more productive. And all of a sudden, that
starts to look like about, a little bit more. We look at our sundries, you know if we could save
a little bit of money there by you know really having a careful plan around how we’re doing things, we might be lucky to save,
let’s even save two percent, which would look a little bit like so. And of course, our stock usage. And that’s, we know
there’s a lot of wastage that goes on in our salon. But what could you actually do, if you had time on your business to come up with something that you could really put a plan into place to reduce your wastage? You know, you might save half a percent, one percent, two percent. You know we actually
saved about four percent. So that’s going to look
a little bit like so. And rent, well there might not
be much to play with there, but hey it wouldn’t hurt
to make a phone call to the landlord, see that you’re on the
best deal you possibly can. But when we look at something
like this, and compare it, you know like just by spending
some time on our business. Perhaps we could almost, you know, half, or almost double our profits. You know there’s certainly
some money to be made there. The number of salons, and us salon owners, that look at ourselves
as “I’m a hairdresser.” You know “I don’t really
know about business.” Well you’re a business owner. You need to dedicate some time, treat that time on your business, those couple of hours every
week, few hours every week, treat that like your
favourite, top client. You know there’s no way that
you’d put that client off, or “I’ll get to her later.” You wouldn’t. You know, they become very
important in your business because you know that’s
what brings in the money. Let’s start to treat Time
on Business the same way, and give ourselves some
time to really plan and see what we can really
get out of our business. I’m sure you’ll really benefit from it. And you can see it would
really be worthwhile. Thanks for your time.

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