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Read this first! You should only consider a second location if:
- Your business is profitable.
- Strong operational systems are in place, marking clearly defined expectations, creating consistency and predictability in overall business outcomes.
- All salon stations and/or treatment rooms should be fully utilized and preferably the salon/spa should be on a split-shifting schedule.
In microeconomics, there’s this thing called economies of scale. Economies of scale are the cost advantages that businesses obtain due to size, output, or scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.
Often operational efficiency is also greater with increasing scale, leading to lower variable cost as well.
Let’s talk about operational efficiency when it comes to multiple locations. There are benefits that can be enjoyed when leveraging key functional operations of the business. Centralized inventory management, marketing, human resource activities, and training are just some to name a few.
In particular, education and training is often mismanaged when it comes to multiple locations. When I mention education and training, I’m referring to new hire or apprenticeship training. What worked with one location later becomes complicated and more difficult when you open the doors to that second location. With one location, it’s easy to manage an education program since everything is under one roof. You have an educator(s) who creates curriculum and classes, all to be delivered to new hires and existing team members at specific times on predetermined days, etc.. It’s pretty straight-forward.
The mistake that many salon owners make when moving to a multi-location environment is trying to duplicate this setup in every location. They follow the idea that every location needs an educator(s) and that new team members hired for each location should then fall under the guidance of their location’s respective educator(s) and training program. While this setup easily works for one location, I don’t recommend doing it when running multiple locations.
Two reasons why this isn’t a good idea.
1) Consistency and the content being delivered gets compromised when you have multiple educators trying to teach the same material, but operating out of different locations.
2) This setup requires more educators which can get expensive when you consider additional pay for educator responsibilities and time that must be blocked for training. It also means more educators to manage which adds additional stress while trying to keep positions filled and maintained.
This is where the concept of economies of scale can help you become better at operational efficiency.
1) Centralized Education By Educator – consider having a small team of educators working together, training all new employees coming into the organization, regardless of the location for which they were hired. Here’s how we scale our education program across all three of our locations. Keep in mind, we have departments of specialists performing color/chemical services and haircuts.
a) We have one educator for core hair color training, one for core haircut training, and a handful of educators that step in and train for the various modules in our training program such as chairside etiquette, blow dry and finishing, makeup, and facial waxing. Our training program is built around modules and each module is taught by team members who have been skill-certified to teach each module. We call our training program “The Pipeline”, because you start with module one and move through the pipeline from one module to the next until you finish with module ten. An educator is only pulled off the floor if there are team members in the pipeline that are scheduled to be in a module corresponding to one the educator is skill-certified to teach.
b) All of our educators, when they are not teaching are performing services on clients daily. When they are teaching, they are marked out on the appointment books and train from their location. New team members always travel to the educator, not the other way around. Educators are marked out all day on Tuesday for training. For example, Erica, our color educator works at our south location. All new colorists that have been hired for all three locations travel to our south location every Tuesday to train with Erica. Centralizing your education eliminates redundancy in your program and fosters consistency in content and delivery. More importantly, it minimizes costs in educator payroll and minimizes exposure to lost revenues by only pulling one educator off the floor instead of two or three for the same function.
2) One Training Program (Curriculum) – Build one training program that any educator can teach and then store the contents of the program in a centralized location. I recommend a cloud-based technology solution so that anyone in the organization can access it regardless of the location from which they work. We use Evernote, a note taking app, to store all of our education documents in the cloud and then give all of our team members access to it. This way, everyone is working from the same source. Again, this eliminates redundancy, creates predictability, and fosters consistency in the delivery of the content being taught. Experience has taught us that this helps build a business with a strong brand reputation for consistent service quality. You want your clients to immediately recognize the standard of excellence you create, no matter which location they visit.
Operating multiple locations can offer operational efficiencies in ways you might not have thought about before. How about you? What are some ways you leveraged specific functions of your business to serve your multi-location salon?