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In any sport, as in business, you cannot be successful if you don’t know the score—and in business, your financial statement information is your scorecard.
When analyzing financial data, it is important to look at four different aspects: trends, comparisons to previous years, budgets and industry averages. Depending on the item analyzed, these details should be looked at monthly, weekly or even daily. So just what should you be examining?
Start with statistics from your business; many of these can be provided via your spa software.
- Average ticket. Total dollars divided by the number of clients is a very simple calculation. Look for comparisons to previous months, previous years and projected amounts. Is it going up or down? Following is a sample average example: $50,000/500 clients = $100 per client
- Discounts. Many spas give away their profits by over-discounting. Look at this monthly.
- Service per client. Identify trends. If service per client is going down, you are missing out on add-on sales.
- New client count. How many new clients did you see last month? This will give you an idea of whether your marketing is working. Also, it will provide information about the effectiveness of your referral program.
- Client retention. This is especially important for new clients. According to industry averages, if you can book a new client twice, you have a 70–80% chance of retaining the client. Client retention also gives you an indication of your customer service.
- Retention by service provider. Do you have a team member who is not retaining clients? If so, consider additional training to remedy the issue.
- Retail per service clients. Most spas would not have a profit if it were not for retail sales, so watching the trends is important. According to Kopsa Otte research, most spas have an average 27–40% client retail with a ticket of $12.50–15.00 per client.
- Hours booked compared to hours available. This is an efficiency ratio; strive for 75% or greater. To calculate, simply take the hours the spa professional is working on clients divided by the hours in the building.
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