Understanding and Controlling Back Bar
In life and business, there are PLENTY of things you can’t control! However, I’m not here to dwell on those (even though it’s so easy to do); I am here to talk about the expenses you can control! If you don’t have your backbar expenses in line, it doesn’t matter how much you charge for XYZ facial/massage/pedicure…You WILL NOT make a profit. You might be saying – well, obviously I can’t tell my supplier how much I WANT to pay for my 2×2’s or that ounce of essential oil scrub, but you can understand and adjust to make sure you FEEL like you are in control! I could write a BOOK about understanding and controlling backbar (now that’s an idea!) but for the sake of time and attention…
I will break this blog into 3 Parts:
1. Service Menu
2. Cost Per Treatment
3. Ordering and Inventory
Service Menu, Backbar and Treatment Room all work off of each other. These are three things you must have a grasp on at all times, as they can work for you or against you… That part is UP TO YOU! Each of these categories haa a direct effect on your bottom line; this is what I call the “Trickle Down Effect.” You must take a look at all of these in order to get an accurate account of the big picture. Let’s get started!
We are past the days of a spa menu needing to look like the Cheesecake Factory menu! Create a balanced menu with brands that align with your vision! Keep it simple! People love customized anything! And let’s remember that half the time, they don’t know WHAT they truly need!
Here are a few tips when it comes to your service menu;
- Menu Minimization = Decreased Costs
- Carry brands that align with the majority of your clients.
- Run a menu audit AT LEAST 2x a year! This means eliminating slow services and replacing them with more effective and desired treatments. Keep your clients at the top of your mind and be aware of trends.
Cost Per Treatment
You should know the Cost Per Treatment for every service in your spa. Cost Per Treatment is essentially how much money it will cost you to perform that service. Your resource partners should be able to provide you with how much it will cost to perform one of their protocols. After that, you need to factor in your consumables, linens, and PPE into your Cost Per Treatment. Keep in mind, some services will have a much lower Cost Per Treatment than others (example: a Signature Pedicure Vs an Anti-Aging Facial) but know your margins! Consider this: are you charging enough for your treatments when you consider your commission structure?
Pro – Tip: Create a spreadsheet of all your services/time/cost. Update this annually! Don’t be afraid of NUMBERS!
Have a suspicion there is some professional product overuse? Use the sharpie rule – once you put a product into use, mark that date on the bottle. You will find out real quick which products are getting misused. This is also a great way to make sure your products are always staying fresh!
Ordering and Inventory
Love it or hate it, ordering and inventory are things that happen MONTHLY. Here are just a few of my best practices!
- Ordering should be done based on budget and need.
- Set your par based on best sellers and seasonality of products.
- There should be a (computer) system for ordering and receiving, done on a weekly or bi-weekly schedule.
- Work with a team lead or manager on this process.
- PERFORM ON A MONTHLY SCHEDULE (repeat that ten times, and then commit to it!)
- Manage and monitor inventory using a spa software; this goes hand in hand with ordering and receiving functionality in your software.
- Recruit the team and make it fun! Inventory day can also be coffee and donuts day!!
- Perform a blind count – that means you don’t provide the quantities you should have on hand.
That was A LOT of information. And honestly, I was just scratching the surface!! I hope you learned a few tips and tricks to get you started in being able to confidently understand and control your backbar! Need more? You will love the first Webinar of our Hindsight is 2020 Webinar series! Check out this WEBINAR where I talk with 2 industry experts who seriously LOVE this stuff! Also don’t miss out on the upcoming webinars in the series. Register and learn more by clicking HERE!
Until Next Time Xx