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 I have highlighted the two most common spa management problems in this article.

Reason 1: poor management

Many new spa owners lack general management experience. Even though a spa or salon is a creative business, it must still function 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 a host of other responsibilities. Even if a business owner has no experience or practical knowledge in these areas, it does not amount to immediate failure. The main problem is that the owner ignores the fact that he cannot be an expert on 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 their own to the point that it is too late to help the business by the time they seek help.

Additionally, the ability to manage staff is critical. This includes the hiring, firing and training of staff. One owner cannot do all the jobs and cannot “run the store” 24 hours a day and therefore needs competent staff to be successful. In addition, there should be good organizational practice to support staff management.

Reason 2: Poor Organizational Processes

The owner of a spa or salon should 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 in place, you should delegate to them and let them lead. Too many managers managing the same thing is a recipe for disaster.

The second organizational process that is essential is administrative procedures. This includes proper archiving of accounting records, customer information, and other business files. If you are audited or need to find something for a business proposal, the right organizing 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 skills. The ability to manage people, both staff and customers, is critical to business success. Get the formula right or get the help you need. Either way, your business will be a success only if you manage it properly.