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Financial Skills for the Entire Team
By: Greg Hagin
Posted: June 17, 2008, from the July 2006 issue of Skin Inc. magazine.
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Depending upon your level of comfort with your team, the question of boundaries is sure to come up at some point. It is important to determine how much information to share, always assuming that what is said to one team member likely will be passed on to others. Data regarding payroll and labor costs obviously is one area in which you may want to be particularly careful, because much of this information is confidential. Proceed at your own discretion.
At a minimum, the team should understand basic principles, if not the actual numbers of the income statement. They should completely grasp the concept of adjusting costs to align with clients’ demand for the spa’s services and the concept of fixed—or overhead—costs versus variable—or demand-dependent—costs. In this way, the team’s expectations will be in line with what is financially feasible.
The old restaurant trick of hanging plates on the wall of the dish room with the price of each plate is an excellent example of a way to remind your team of the cost of doing business. People tend to forget what a towel costs to wash or replace. Visuals such as this naturally can reinforce conservation habits. Hang one of each item in the laundry area with its cleaning and replacement costs written on it.
Customize your reminders to fit the needs of your operation. Whether your biggest challenge is utilities, such as light switches, water and thermostats; product portion control for treatments; client supplies, such as robes, sandals and amenities; or safety, such as slips, accidents and incidents, get creative and place tasteful reminders where they will be noticed by your team during the course of the day.
Don’t ever stop
Employees want to know about their workplace, and what they don’t know they are likely to misperceive, based on inaccurate assumptions. Financial matters are an important part of the knowledge they need in order to feel secure in what they do. Your commitment to teaching them will be repaid with increased loyalty and their growing ability to think like an owner as they perform their daily jobs. Customize your approach to best fit your operation, and teach job-appropriate information for each position. Above all, educate your team right away, and don’t ever stop.