360 The Numbers Don't Lie

[upbeat music] Hello, I'm Anthony Whittaker, and this is the Grow My Salon Business podcast. Now, this week I'm gonna start with a question, and it's a question that I hear literally every week. And the question is, "Is that good?" Now, typically, it comes up when I'm sitting with a salon owner looking at their business numbers. Maybe we're looking at their profit margin percentage, or their employee costs as a percentage, or maybe it's their retail sales or their utilization rate. And they'll often point to a figure on the page, and they'll look across at me, and they'll sort of tentatively ask, "Anthony, is, is that good?" And my answer is always the same, "Compared to what?" Because context is everything. Now, as a business coach, I spend a lot of my life helping salon owners understand their numbers. But the truth is that numbers on their own don't actually tell you very much. For example, if I said to you a profit margin of 10%, or an average client bill of $110, or retail percentage of 12%, or utilization rate of 58%, are they good numbers? Well, maybe or maybe not, because numbers only become meaningful when you compare them to something else. Compared to last month, compared to last year, compared to your goals, or compared to what other successful businesses are achieving. And that is what benchmarking is. It's a point of reference that you can compare your numbers to. Now, I have to tell you that there was a time when I didn't understand that at all. When I opened my first salon, like most young salon owners, all I wanted was to be known for doing great hair. We were winning awards for our hairdressing. We were building a great reputation and attracting some wonderful clients, and I was incredibly proud of what we were creating. But I also knew that there was another side to running a salon that nobody had ever really taught me, and I didn't know what it was, but I just had this niggling feeling that there was something that I needed to be knowing about business that I didn't know. Because I knew how to cut hair, I knew how to build a clientele, but I wasn't sure that I knew how to build a great business. And then one evening, I was at an industry event where there was a presentation being put on by a very successful salon owner, and he started talking about the numbers that he believed every salon owner should be measuring and what they should be comparing those numbers to, benchmarks. Now, I can still remember sitting there thinking to myself, "This is it." It genuinely felt like somebody had just sort of switched the lights on. And for the first time, I wasn't just looking at numbers, I was looking at benchmarks. Suddenly I could compare where my business was against what was actually possible. Suddenly I could answer that question, "Is that good?" More importantly, I could see where the opportunities were. It was a defining moment in my journey because, well, it changed the way I thought about business. It changed the way I thought about running my business, not because somebody had given me all the answers, but because they'd helped me to ask better questions, and that's exactly why benchmarking matters. Now, before your eyes