Spring is around the corner and with it comes the same old challenges – just as nature tries to distract us with the first glimpses of sun and daffodils.
As I predicted last year, HMRC has taken the opportunity to not only raise the National Living Wage in April at the same time as tax codes (personal allowance) change, but also to sneak in a small increase to National Minimum Wage (NMW) rates, even though these were tweaked last October. This sets out its intention to make the start of the tax year the time that NMW rates change as well.
Although I absolutely agree that this is a logical time to change these rates, I also think that politically it makes sense for government, as employees may often see the benefit of their tax codes and hourly rates changing with the resulting impact on their take home pay. Happy days for them but, sadly, challenging days for many salons.
Sad because I firmly believe that, as an industry, we should not see a rise in NMW rates as a challenge. and I know that many of you don’t, especially inner city and well-established salons.
Unfortunately though I also know that many of you do see them as a hurdle because I witness it all the time, particularly in salons with prices that cannot possibly allow a stylist to earn a good salary. And salons that are offering so many discounts that they are perceived as budget salons.
Nothing wrong with that if you have stylists serving 40 or more clients every single week without fail. Sadly I know that the average stylist, and I say again average, is serving fewer than 25, and with the average income per client still under £40 net of VAT then you can do the maths yourself…
So, how about some industry goals for 2017?
- Every stylist in every salon taking at least £1,000 net of VAT in professional sales a week.
- Every stylist being truly cost-efficient within nine months of starting a column in a salon.
- Average income per client more than £40, net of VAT.
- Earnings of any team member above what they could earn in Lidl.
- And my own goal is for each and every one of you to look at the above and say: “no problem!”
Ken West is director of business experts 3•6•5 – email him on KenW@365Hair.com