Clientele Growth: Building at a Healthy Rate Featured

Written by Douglas Preston

Few things are more important to the solo aesthetician than seeing steady clientele growth. That gradual collecting of paying clients is the key measure of a business’ survival and the income received from it. In other words, pretty much everything. But, how do we know if our practice is growing at a healthy rate, or as well as it should be? Is your business growing faster than average or is it trailing behind? In this article we’ll explore these often asked questions.

 

MEASURING BUSINESS GROWTH

To begin with, all we need to do to learn about business growth averages is to conduct a simple internet search. Many experts on the issue report that 7% to 8% annual sales growth is higher than average for most businesses during the first five years of operation, with 20% representing outstanding performance. Since most of us are probably seeking exceptional growth, the 7% to 8% target would seem well worth pursuing. Now, naturally you might expect me to lead this article into ways by which you might achieve a high growth goal, but I’m going to disappoint you, and for some good reasons. Before we aim our energy on sales expansion, it would be useful to explore some valuable facts about increasing numbers. And, while all businesses that plan to survive will need to build sales, additional sales alone do not necessarily add up to additional profit. You know about profit, right? That little or big layer of cash fat that’s (hopefully) left over when all business expenses, including a salary for the owner, is covered? Let’s dig a bit deeper.

 

Returning to the question of business growth, there are a number of factors we need to understand to measure how well we are doing with that. Percentage of growth is one thing, but the sales number that growth percentage is based on is something else. Let’s say in our first year of operating a solo skin care practice we grossed only $20,000. However, we ended the following year with $30,000 in sales. Hey, that’s 50% growth. We’re way above average. But, $30,000 divided by 12 months is a mere $2,500. What are our expenses for each of those months? How much money are we making (or losing, more like it)? All right, we were prepared for this and motivated to grow by another 50% – super sales stars that we are. So, we close the next year with another 50% sales growth achievement, a colossal $45,000. But this is still only $3,750 for each month we operated the practice, and this after three years of hard work. Can we keep this far, far above average growth rate up forever? Even if we managed to build by another 50% during the next 12-month cycle, that would only total $67,500 or $5,625 per month, now closing in on our fifth year in business. Are we making money even close to being worth the time and cost invested?

 

FACTORS THAT IMPACT GROWTH

Business growth is dependent upon numerous important factors, some within our control and some not, at least not once we’re up and running:

  • Physical capacity of the operation (how much business can be served in a day)
  • The number of days and hours devoted to the practice
  • How much time is allowed per client service
  • Service prices and ability to sell them
  • Retail prices and the volume of products sold
  • Density of local competition
  • Supply of likely clients in the market area
  • The quality of our work, facility, and reputation
  • Average local income
  • Varying economic conditions

All of the above will play a huge role in how the business grows, and how it reaches, sells to, and maintains new clients. It is a composite of conditions that involve solid business management, market awareness, and just plain old luck. In the end the question will be, “Is all this benefitting me?”

 

GETTING BIGGER BY GROWING SMALLER

Sometimes business growth can be viewed as increased profit, even with the same sales or even less than a year prior. For example, I’m now 66-years old and in the beginning stages of scaling back my aesthetics career – a plan now two years in progress. My first goal was to begin reducing my treatment room time by one day per week and then by another half-day over that time. But, along with that reduced treatment time, I wanted to maintain my same sales totals as before these cuts were made. To achieve that, I raised service and retail prices several times over that period, losing a small amount of business but keeping most clients and attracting more at the new, higher rates. Because I carry my own private brand of products, I could easily increase their prices without concern that the same items could be purchased less expensively through another vendor. The result was a schedule trimmed by about 30% and a sales/profit increase of 18%. Who says you can’t get bigger by growing smaller? My next step is to slow to a three-day week, eventually settling at two days a few years from now. I love my work, so I have no desire to stop completely, but certainly want both the option to and the greater schedule flexibility.

 

DETERMINING WHAT YOUR BUSINESS NEEDS

What do you want? In a nutshell here are some thoughts about business growth that may help determine if yours is meeting your needs or if more planning is needed:

  1. If you have any additional business this year than last, even if it’s only measured in dollars instead of new clients, you are growing. Be glad about that.
  2. Not experiencing the kind of growth you expected in the beginning? Perhaps those expectations need an adjustment. Be ambitious but realistic. Goals that are too lofty to reach will kill enthusiasm.
  3. Decide in advance to sell what customers want, not what you want them to want. This means doing some advance research on the more enduring services clients are the most loyal to. Beware of purchasing exotic equipment and committing to costly build outs that sound great but have no proven demand that will pay for your investment and then some.
  4. Evaluate your personal sales and marketing ability. If you’re weak in those departments, skill building will be a wise investment.
  5. Be sure that growth is what you truly desire before pushing too hard for it. Along with growth comes increased responsibility, cost, and daily duties you may not want or know how to perform properly (more about that in my next article).
  6. Know what you want from your business and why you want it. Money? Ego? Self-satisfaction? A challenge? Your motivations will either drive progress or impede it.
  7. Finally, you’ll need patience. Businesses all grow slowly in the beginning and most grow gradually over time, so embrace that fact, since there isn’t much you can do to change it. Clientele building is a waiting game and not for the “gotta have it now” personality type. Think of your practice like a young fruit tree. You plant it, water it, nurture it, protect it from pests, and, then, wait for the day when it begins to reward you with apples, oranges, or whatever you hoped from it. That will not happen overnight no matter what you do. If you insist on immediate success, try a lotto ticket.

There are no guarantees in operating a business. It’s one of the most perilous and failure-prone career paths you can take. Be sure you’re up for the task, but also celebrate your forward steps no matter how small they may seem. That’s always worked for me and still does.

 

douglas preston 2016Douglas Preston, president of Preston Beauty Professional, has a career that spans 33 years in professional aesthetics, education, and skin care career mentoring. His business articles appear in DERMASCOPE Magazine, Spa Management Journal, and others. He is a past president of Aesthetics International Association and a former committee chairman for The Day Spa Association. Preston has started and operated award-winning day spas, trains spa and skin care professionals internationally, and is a featured speaker at numerous spa and skin care trade events.

 

 

 

 

 

 

 

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