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Thriving Stylist Podcast
#372 - How many new clients do you need to hit your $$$ goal
00:19:46
Are you setting revenue targets without a solid plan to achieve your financial goals this year? If so, I’ve got you covered! Today, we're diving deep into a game-changing tool, The Grow My Clientele Calculator, and I am so excited to be sharing more...
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Do you feel like you were meant to have a kick ass career as a hairstylist? Like you got into this industry to make big things happen? Maybe you're struggling to build a solid base and want some stability. Maybe you know social media is important, but it feels like a waste of time because you aren't seeing any results. Maybe you've already had some amazing success but are craving more.
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Maybe you're ready to truly enjoy the.
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Freedom and flexibility this industry has to offer. Cutting and coloring skills will only get you so far, but to build a lifelong career as a wealthy stylist, it takes business skills and a serious marketing strategy. When you're ready to quit just working in your business and start working on it, join us here where we share real success stories from real stylists. I'm Brit Siva, social media and marketing strategist just for Hairstylists and this is the Thriving Stylist Podcast.
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What is up? And welcome back to the Thriving Stylist Podcast. I'm your host Britt Siva, and this week we have a kind of a special, special little episode for you. So this episode is going to be dedicated to figuring out how many new clients you specifically in your business need to see this year to achieve your financial goal. So the reason this is extra special is that we actually had a different episode slated to release on this release date, if you're listening to us in real time. But we decided to push that episode. Don't worry, you'll hear it next week because last week we released a Grow your clientele calculator that is one of the top three free resources I have released in the past decade. Like it really exploded and it made me realize what a gap this was in the industry and how useful this tool is at scale. So I think a couple thousand of you listening to this episode already have downloaded your copy and gotten your own access. And it's a fully customized calculator so you make it work for you and your business. I'm going to guess that a couple thousand of you have not gotten it yet and I want you to just take this episode to decide if this free tool and resource is something that would be helpful to you and or your team and if it's something you want to play with. If so, you can check out the show notes on this episode. We'll have it linked there. You can also head to thrivingstylist.com grow my clientele again, it's totally for free and you can access the tool there. So why does this tool matter? Like truly who cares? Why can't we just pick a financial goal for the year, figure out how many service dollars we need to achieve each day to hit that goal, and then just do it? Well, first of all, that's much easier said than done. And I think if it were that simple, most stylists would be doing it. Yet we know that most stylists are making less than they would like to. And this tool is dedicated to that challenge. So here's what I mean in math and simple terms. So a very basic coaching strategy is to say, want to know how much you have to be doing in revenue every single week? Or you want to set goals for yourself to achieve your end of your financial goal? Here's how you do it. You decide how much you want to make in a year. So let's say you decide you want to make $60,000 in a year. You divide 60,000 by 52, because there's 52 weeks in a year. And what that lets us know is, okay, if this stylist wants to do $60,000 a year in services, they'll need to be producing at $1,153 a week, right? Because 60,000 divided by 52 weeks a year gives you that number. If that same stylist works four days a week, then we take 1,153 divided by four, and that gives you 288 a day. If you were to average 288 a day or $1,153 a week, you would hit $60,000 a year. Bingo. Now, if you work, commission, or let's say you want to take home $60,000 as net income, let's say pre tax net income. Let's like make this easy on ourselves. If you were running at a 50% profit margin, you'd have to double all those numbers, right? Because to take home 60, you'd have to produce 120. So you would take 120 divided by 52. It would bring us to what, around $2,300 a week. And you would run the math again. So this is very basic and very simple. I do think that psychologically it's nice to have that target. But what do you do if you're not averaging that amount? What do you do if you get clear on that? And you're like, okay, great, 288 a day, and then one day you do 174, and then the next day you do 202, and then the next day you Do 1. 197 and the next day you do 230, and then on the Saturday you do 315. So then you average it all up and you're still running short. Now what? Something has to change in your business in order for you to achieve that financial goal that you're chasing. Easy enough. So then we think logically, like, okay, well, what are the ways that we can make more money as hairstylists? We can see more clients or we could increase our average service ticket because we're in the service based industry. There's only so many ways to get there. So we think price increase, which is generally speaking, not the best decision. We can't just say, I need to make more money, I'm going to raise my prices. I was coaching somebody the other day and she was asking me why in the Thrivers pricing calculator does cost of renting your suite not factor into the prices you're allowed to charge your clients? And I said, you can't take fixed cost expenses like that and outsource them to your clients. It's not part of how running business works. That being said, we budget for paying for your booth rent, paying for your color, paying for your back bar, all the things. We budget for all of that. But we can't just say, well, I need to be working in a suite that costs me $3,000 a month, so my clients are going to need to pay this much because that's what I need to do. You can try it. It's going to be a tough sell because again, clients are going to make their purchasing decisions based on perceived value. So when we realize we're running shy of achieving our financial goals, we tend to go a couple of different paths. One, we start saying, okay, what do I do to market myself? How do I turn this around? Or two, we spiral and say, oh my gosh, maybe this is going to be a bad year. Maybe this is not going to work out for me. Maybe I set my goals too lofty, maybe I need to adjust them backwards. Why do we do those things? Because we don't have enough information. And this calculator fills in the gap on that so that you don't have to go down that spiral of am I going to make it or not? One of the things that happens often, especially this time of year where January, February started the year, is that a lot of stylists are like, well, kind of a slow start to the year. But that's really typical. See, here's, here's the challenge with that is that we are in a Much more difficult clientele building environment. We just are. 2025 is going to be a more challenging year. So, yes, maybe January and February are historically slow months and things will pick up. Or maybe you're trending downward and you don't know that yet. And so your plan is to wait it out until April or May and see how things shake out. And now you've lost almost half the year waiting to see how things shake out. So rather than rolling the dice or setting, you know, revenue goals without a plan of achieving it, we said, what if we can create a calculator that's going to show stylists exactly what needs to happen in their business to achieve their financial goals? And we did it. So let me explain how the tool works, and then I want to share with you some of the results that stylist got. So what will happen is you're going to go into the calculator and it's going to ask you for four numbers. And the first is going to be, what was your service total for 2024? So let me put in some fake numbers. I'm going to say this stylist did 40,000.
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Great.
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This stylist did 40,000 in services in 2024. And then it says, what is your average ticket? So I'm going to say $70. Great. Then it's going to ask, by how much are you hoping to grow your revenue in 2025? And we have options that range from 0 to 9%, which is essentially sustaining. Does everybody know that if you grow your revenue by up to 9% this year, you'll simply be sustaining? You will not increase your lifestyle, you won't improve your profit margin, because all you'll be doing is growing with the rate of inflation. So if you read business articles or, like, look at financial reports, they Recommend at least 15% just to ensure you're staying out ahead of inflation and you don't start to lose your margin? But that being said, we gave you options from 0 to 200%, so somebody might want to double their revenue. Some people might want to increase by 15% in this example. Let's say this person wants to increase by 15%. They just want to kind of sustain and stay out ahead of inflation. They're not looking for really radical growth. So if they made 40,000 in 2024, their average ticket was 70 bucks, and they decided that they wanted to increase their revenue by 15%. And then, last piece, our fourth factor is, what is your commission percentage or profit percentage? So this is fun, too. There's a way to customize it if you're a booth renter or commission stylist. So let's say this stylist is a booth renter and they operate at a 50% profit margin. Okay, great. So I've entered that in as well. So then we go up to our results and the results say amazing. If you made $40,000 in 2024 and your average ticket was 70 bucks and you want to grow by 15% and you have a current pre tax take home rate of around 50%, if you achieve this, you'd make $46,000 this year. That's a 15% increase. 23,000 would be your pre tax take home pay. Here we go. Drum roll please. You would need to see 48 new guests in 2025, which breaks down to four new guests every single month. Before I rattle that off, I'm curious, like in your mind, how many new clients do you think you need to be seeing a month to increase Your revenue by 15%? What number lives in your brain? Let's run this a little bit differently. So let's imagine that most of these numbers stay the same. Let's say that this is a stylist, but now they're making $100,000 a year total revenue today. So let's say that that's gross revenue, $100,000 in services, and their average ticket is 70 bucks. Still, still stays the same and they want to grow by 15% and their take home is 50%. Watch what happens to the numbers. If they grow by 15%, they now would make $115,000 in services. They would take home 57,500. Now they need to see 119 total new guests in a year. 10 new guests every single month. Same 15% growth. But what happened was the volume was so much higher. Now watch this. What if it's $100,000 earner so the service ticket goes up? Let's say that their average service ticket is more like 120. Okay, great. So now things adjust again. If the average service ticket becomes 120. Now the stylist needs to see six new guests every single month or 69 clients a year to make the 115,000. Let's do one more scenario. Now what if this was the same thing? The stylist making a hundred thousand dollars a year. Their average ticket is 120. They want to increase by 15%. But let's say that their commission percentage is now 40. Perfect. So the number of new guests that they need to see on the Calculator stays exactly the same because we're looking at top line revenue. But what changes is what their take home pay would be. Take home pay becomes $46,000 because they're taking home 10% less right now. Something that I like to do a lot of times with commission stylists is a lot of commission. Stylists will say, maybe I've capped out my commission and I'd like to make more money. Generally speaking, the way to make more money as any stylist, really, but as a commission stylist is to increase your production. So let's say that this stylist decides, I don't want to make $46,000 a year, I want to make 50,000. Okay, well, then you can use this calculator. I just played with numbers. In order for this stylist to take home 50,000, they would need to increase their revenue by 25%, which would mean their service total is 125. They would need to see 116 new guests in a year or 10 new guests in a month. So what's really fun about this calculator is you can play with and manipulate the numbers in so many different ways, and you could work it backwards, you could work it forwards. What about this scenario? What if I change that? And what it's going to do is help you to gain clarity on how many new guests you need to see. And. Or maybe this stylist has needed a price increase forever and has been stalling out because they're scared of what's going on in the market. Well, if they increase their average ticket and they take it from 120, let's say their average goes up to 135 on average. Well, again, now things changed. So now they need to see nine new guests a month instead of 10 new guests a month. So it takes the pressure off a little bit. 12 less new guests every single year. So let me go into the DMs, because I asked stylists, if you use the calculator, what did you learn from it, and what do you think about the results? So let me read you some of those. So Athena says based on the calculator, I need to see 14 new guests every month to grow by 50%. Great news, because I'm already averaging 12amonth. So Athena got the peace of mind that she's on the right track. Now, for some of you, when I say 14 guests a month, your jaw just dropped. Because not everybody realizes, like, wow. By the way, Wait, let me back it up. You could not do a hefty enough price increase to grow by 50%, you're. You're just going to have to see more clients because if you increased your prices by that amount, you would sticker shock your clients so hard that you'd have a mass exodus. You can't do it. Most stylists can't even raise their income by 15 or 20% based on a price increase alone. Because often your clientele, a 20% increase is the highest I would go. And when you do a 20% increase, some clients tolerate it and some clients don't. But often when we're doing a price increase, part of the reason we do it is to shed some of the clients who were kind of on the fringe and were struggling to afford us. And by the way, whenever you lose clients with a price increase, I know it hurts because we love our clients. But I want to give you a mindset shift of when you become too expensive for them, it becomes a gift in an opportunity for them to meet a new stylist who's A, still trying to grow their business and B, could be a wonderful fit for this client at their season of life. So you're not the end all, be all. It's okay that clients leave. This is like the circle of life. It's not a problem. And so embracing the fact that clients will move on is important. Even a 20% price increase is really, really, really hefty and not always well tolerated. And so generally speaking, you can't just price increase your way to a revenue adjustment that's going to hit your goals. We're going to have to grow the business at the same time. By the way, I want to clear whenever I say grow the business. I have never coached a stylist to work more hours. I don't believe that people need to be doing double booking. So I'm not saying work harder, do more. That would never be my message. But this allows us to make really strategic business decisions. Okay, Julie says I need to see 165 new guests this year in order to grow my revenue by 20%. Sarah says 20% growth equals 119 new guests, 10amonth. Now my question is how? But now she has that question. Whereas before, she didn't even know what the number would be. And often, remember I asked you a few minutes ago, like, what is the number that lives in your brain emotionally? For most of us, if we're seeing three to four new guests a month, we feel like we're doing good. Yes. For most of us, we're like, that's pretty good. It's not that it's bad, but it might not allow you to achieve your goal. Kayla says five. Hairbender says 19. Cultured Canvas says 11 guests a month. I had nine last month to get 75% more revenue this year. Like, how motivating is that for her? 11 new guests a month, and she will almost double her income. Like, that is so juicy. Kat says eight for 30%. Lisa says three for 20%. Heather says eight for 20%. Oh, this is a good one. Postscript says only three. I was expecting so much more. So that's the nice thing, too, is sometimes you're working way too hard. You're like, oh, my gosh, I'm hearing these numbers. It's probably gonna be, like, 15 for me. No, this stylist was, like, pleasantly surprised. Like, great news. If I'm doing three, I'm in good shape and I'm going to achieve my financial goals. Like, and that's the nice thing, too, is, like, sometimes we can take the pressure off ourselves to be the overachiever. Like, if your goal is to increase your revenue by 15% this year, and the calculator says you just need three new guests a month, like, you don't have to do 10, it's okay to just be like, I'm going to enjoy my year. I'm going to see three new guests this month, and I'm going to feel really, really good about it. Jess says I need seven, and that feels so doable considering I got eight in January, which is usually my slowest month of the year. Nicole says to increase by 10%, I need to see eight new clients a month. Eden says 15amonth. Summer says 20% means five new guests a month for me. Natasha says 14. So you'll see the numbers are all over the place. Some people are finding they only need two, and some are needing more, like 15. But knowledge is power, and the point of doing this is to help you fill in the gaps. Now, when we say, how am I going to market to gain that many clients a month? I also peppered in some stories there of clients who are doing it. So I think there's this idea that, like, nobody's getting 10 new guest requests a month. No, a lot of. A lot of stylists are. Clients are just pickier about what they're looking for. So what I want to do is if you're even curious about how many new guests you would need to be seeing in a month to achieve your revenue goals, I want you to head to www.thrivingstaylist.com growmyclientele. Access to the calculator is totally free. I think you're gonna absolutely love it. I've been playing with it all week. I think you will enjoy Figure out your number and then what you can do is leave me a rating or review on itunes and let me know what questions have come up for you specifically. But I have one gajillion podcast episodes here in this show dedicated to how to grow your clientele. So what you can do Little hack if you don't know this, if there's ever anything you wonder like I wonder if Brits ever talked about this in the podcast. If you do a simple Google search and you search Thriving Stylist Podcast how to grow clientele Thriving Stylist Podcast Make a Hundred K Thriving Stylist Podcast Marketing. You're going to see a series of podcast episodes and blogs related to the topics you're looking for. Just Google Thriving Stylist Podcast, Instagram or Thriving Stylist Podcasts make more money and you'll see the resources we've previously created hit those topics. And hey, by the way, I'm here every single week. I'll keep sharing more good stuff. But if you have very specific questions, the best way to get them to me is to leave me a rating or review on itunes with your question and I promise to hit as many of them as I can on the show. So I hope this has been clarifying in helping you to understand exactly how many new clients you need in order to to hit your financial goal. Help to solve some of the mystery, give you more tangible goals beyond what maybe your salon goals are or what you thought was normal. Now you know what is actually the appropriate new guest goal for you.
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So as I always like to say.
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So much love happy business building and I'll see you on the next one.