Mastering Problem-Solving: Staffing, Clients, and Profits is what we discuss this week.
Identifying the Root Problem
What are we trying to do here? We're trying to arrive at and understand exactly what is broken in our business so we can identify ways to approach fixing the issue.
The importance of identifying the core issues within each of the three areas: staffing (issues with current staff/hiring), client acquisition, and profitability.
Step 1
Breaking Problems into Smaller Steps
The importance of breaking down complex problems into smaller, manageable steps to avoid feeling overwhelmed.
The '5 Whys" technique.
Doing the "ask why 5 times" thing could work. Try it. And don't make the mistake of thinking when you hit your 5th why you'll arrive at the root cause. the 5 is just a number. You may luck out and hit your answer with fewer times or need to keep going past 5.
Staffing Issues
We dive into staffing issues, including challenges related to hiring, team management, and performance.
Attracting More Clients
Client acquisition issues, focusing on marketing and retention.
How to diagnose problems in client acquisition, such as ineffective marketing campaigns or inadequate client follow-up.
Improving Profitability
The profitability challenge and how to uncover underlying issues.
The root cause could seem variable or throw you off if you ignore the FULL picture.
Example: Say we have a biz with 100 clients who pay $300/month. That's $30,000/month. Now, the common question that would get asked here is, "Is $30k/month enough money to arrive at your goal?" Accounting for everything, of course. If not, then you think, "I need more clients!" But if we look at your pricing, because we need to look at EVERYTHING–is your pricing off? Say you've never raised your prices and are well below the market. Now, how do things look? Customers generally tolerate 15-20% increases, which is $45 at 15%, so let's call it $50 to make it easy. By raising your prices to $350/month, you're generating an extra $5000/monthly by serving the same amount of clients.
We talk about your network a bunch. You should have an accountant, and they should be able to meet with you for you to understand your numbers.
More things to look at are payroll, rent, other smaller expenses, subscriptions,
I challenge you to find the root cause of one of the challenges you face in your business.
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