Using cloud based automation tools to increase efficiency and profitability

Savage Beauty is a high-end beauty salon offering treatments and a retail space for clients wanting expert personalised skincare advice. It is based in the Wiltshire town of Devizes and was opened by owner Emma Savage in 2011.

Emma comes from a family of entrepreneurs and, having identified the need for this type of salon in Devizes, was keen to start her own business.

Aged just 21, she found a property which offered her the space she needed and, with financial help from her family and a legacy from her late father, took on a 10 year lease. Without previous experience of running a business, it was a big gamble.

The salon proved very popular and the client list expanded rapidly. Emma took on additional therapists but found it harder and harder to pay the rent each month. Feeling increasingly stressed, she had to inject her personal money into the business to keep it afloat.

When her finances still didn’t improve, she cut back on her team, but this meant that the retail shop was closed when they were busy with treatments. Takings went down even further as a result.

She didn’t know what to do for the best and was seriously considering giving up and closing the salon.

How we helped

Emma realised that she needed proper advice and turned to Wiltshire Business Support (an advice service for small businesses) for help. They recommended she speak to Jessica Pillow of Pillow May. Although Emma had limited funds available, she was able to get grant funding of 50% as Jessica is accreditated through the Growth Voucher scheme,

“Together, we went through Emma’s original aims for the business and identified which things weren’t working,” Jessica says. “We put together a sketch budget, to work out the number of treatments required per week to achieve break-even point, and to ensure that the salon was actually viable. This was information she simply hadn’t had before.”

Jessica’s plan of action plan for Emma

  • Increase margins through a 10% price increase on treatments by the assistant therapist and a 25% price increase for Emma (as senior therapist).
  •  Set up Receipt Bank, a cloud based tool for scanning and automatically processing purchase invoices and receipts – to save time on data entry for accounts and tax purposes, and to store business records more efficiently
  • Switch to Timely, a cloud-based system that allows clients to book their own appointment slots, reduces no shows by automatically sending reminders, and automatically creates sales invoices once the appointment has happened. It also acts as a contact management system that can drive marketing campaigns. Because Timely saved Emma’s team a lot of time on administrative tasks, it gave them much more time to make sales by serving in the shop and doing treatments.
  • Integrate Timely and Receipt Bank with Xero, so that large parts of the sales and purchasing functions were automated, and comprehensive management information could be produced at the push of a button.

And it was all to be completed within three weeks!

Pillow May offered support throughout the process, both for the software and as a personal mentor for Emma. All the changes were made by the beginning of November, to capitalise on the busy pre-Christmas period.

As a result of the new systems, Emma has a lot of key information at her fingertips:

  • She can see which treatments were popular and which were less so, making it easy to identify trends and take early action to avoid problems.
  • She has better knowledge of her clients, as she has all their contact details at her fingertips and knows who her best customers are.
  • She has full stock reports, so it is easier to reduce inventory levels by adopting a just in time purchasing strategy – a big boost to her cashflow.
  • She can see in advance when the salon will be busy – or quiet – so is able to better manage her team costs.

The difference it made

Emma had her best Christmas ever, with increased bookings for treatments at higher prices. She was also able to reduce her stock, and started the new year with money in the bank.

A planned hospital procedure took Emma away from the business for a month, but with the new systems in place, her assistant kept the business running.

Jessica comments, “Emma offered 25% discount on any bookings while she was away, so her assistant would stay busy.  It was also a way of encouraging her own clients to give her assistant a try with their treatments so Emma could be freed up in the future to work ‘on’ the business. And in fact, sales figures for the month were better than the previous year.”

When Emma returned, she and Jessica put together a budget with the ambitious target of a 33% month by month increase in sales from the previous year. This would allow her to take a proper director’s salary each month as well as a small dividend for the year.

Remarkably, by the end of July, the business was already operating at 10% over budget for the year to date.

“The business plan has given Emma focus and the ability to make decisions confidently on the future of her business,” Jessica says. “She feels far more in control. The level of stress and worry has greatly reduced and a number of long-time clients have commented on how ‘the old Emma’ is back.

“Our regular meetings ensure she is always aware of her financial figures and that keeps her focused on where the business is going. It’s an ideal opportunity for her to bounce ideas around and review her business plan.”

Emma is planning to hire extra team members later this year and her partner has now become a director, allowing them to plan for their future together as well as for the business. Her employees also have a better understanding of the business and appreciate the more relaxed and efficient working environment that the new software and systems have created.

 Summary:

From the start Emma knew she had a good business idea, but until she met Jessica she didn’t have the guidance she needed to make it work and was becoming increasingly frustrated.

“I wanted to make my own decisions and make my family proud,” Emma says now. “But when I asked for advice before, I felt that no one took me seriously because I was such a young business woman. Having Jessica is like having a business partner who I can bounce ideas off at any time. She explains all the financial data and reasoning behind her recommendations, but I am still in control of my decisions.”

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