Why Spas and Salons Fail

Sixty-seven percent of small businesses fail in the first two years. The reasons vary but most fall into one of 5 categories, but in this article I have highlighted the two most common spa management problems.

Reason 1: Poor management

Many new spa owners lack general management experience. Even though a spa or salon is a creative business, it still needs to be run like a business. Additionally, many spa and salon owners overlook the fact that management includes not only supervising people, but also managing cash flow, marketing, sales, and many other responsibilities. Even if a business owner has no experience or working knowledge of these areas, it does not equate to immediate failure. The main problem is that the owner ignores the fact that he cannot be an expert at everything and does not seek expert help at the first sign of trouble. Instead, the owner makes the business worse by trying to figure things out on his own to the point that it is too late to help the business by the time he seeks help.

In addition, the ability to manage staff is essential. This includes hiring, firing and training staff. An owner cannot do all the jobs and cannot “manage the store” 24 hours a day and therefore needs competent staff to be successful. In addition, good organizational practice should be implemented to support personnel management.

Reason 2: Poor organization processes

A spa or salon owner must have two organizational processes in place. The first is an organizational structure so that staff know who to turn to for questions and help. If you as the owner have managers, you should delegate to them and let them lead. Too many managers running the same thing is a recipe for disaster.

The second organizational process that is critical is administrative procedures. This includes the proper filing of accounting records, customer information, and other business records. Whether you’re audited or need to find something for a business proposal, the right orchestration processes will help you save time. And in business, time is money.

The main reason for the failure of a spa or salon centers on management capacity. The ability to manage people, both staff and customers, is critical to business success. Get the right formula or get the help you need. Either way, your business will be successful only if you manage it properly.