Dayspa

JUN 2013

DAYSPA is the business resource for spa & wellness professionals! Each issue covers the latest in skin care, spa treatments, wellness services and management strategies.

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PROFIT CENTER Inventory Turn Calculation professional and retail supply require detailed protocols on stocking and storage. This is particularly important with products used across departments, such as the gloves in the previous example. Each department should have assigned storage for professional and retail supply. Everyone should be clear on protocols for putting products into storage; Monthly retail sales (wholesale value) typically, newer products are placed at the rear of the shelf behind existing $2,500 products. This is often essential with spa products as they tend to have a limited shelf life. ASSESS SUCCESS Now that you have controls and protocols in place, it becomes possible Increase Your Spa's Revenue with ! W E N FREQUENTLY REFERRED TO AS "THE BUSY PERSON'S WORKOUT" ONE HOUR SESSION IS EQUIVALENT TO A SIX HOUR WORKOUT. • 600 SIT UPS • Immediate Income Potential • Two Day VIP Event to Include • 600 LEG LIFTS • 600 PUSH UPS Training • Direct Contact with Corporate • Burns Deep Fat • A "No-Brainer" Add On Service • Tones Muscles • Marketing Strategies • Reduces Cellulite Included • Stimulates Toxin • Completely Safe "I own a Body Wrap Spa and added the Electro Body Sculpting in Sept 2011; I had my investment back in three months. During the VIP event, we sold 10 packages. This additional income really made my business thrive." - Brenda Grund, Instafirm Body Wraps Troy MI 248-879-4818 Call Today! www.electrobodysculptingmachine.com Mention Code 5069 for Additional Savings! Ask for Joni dayspamagazine.com/freeinfo • Use FreeInfo #64 116 DAYSPA | JUNE 2013 Annual retail sales (wholesale $) Average monthly inventory value $ Annual inventory turns $30,000 $6,500 4.6 to measure your performance and strategize potential improvements. Remember that increases in retail sale totals are not a measure of profitability—not if these increases are accompanied by more dollars tied up in products on your shelves! The retail industry measures efficiency with inventory turns, the formula for which is "annual retail sales (wholesale value) /average $ of inventory in stock" (see above chart). Let's use our example in "Build a Budget" on page 110 to illustrate: Compton advises that spas target an annual inventory turn number of at least two, and preferably three to four—so the result above would be considered quite good. Salon Transcripts Software (salontranscripts .com) offers an additional tool: a report that ranks inventory according to sales and breaks it into a fourcategory report. "This is a great way for spas to quickly determine which products are turning more quickly, and thus should be ordered more frequently," says company president Jeff Mason, who adds that the use of this tool has created substantial returns on profit in a short time frame. The info you glean from employing effective inventory management strategies can prove invaluable, allowing you to analyze the performance and profitability of each department, and perhaps even adjust your space allocation or service mix to positively impact future results. And it all comes from making sure that you have the right amount of products, in the right place, at the right time. Lisa Starr (lstarr@wynnebusiness.com) is a business consultant for Wynne Business and a spa management trainer/educator.

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