Happy New Year! No, I am not a little slow … I’m talking about the new financial year, which started (for most) on the 1^st of March. The date today is the 3^rd of March. Last week the budget speech was delivered by finance minister Pravin Gordhan and the 1^st of March marked the first day of the new financial year.

The 1^st of March is similar to the 1^st of January in that on both days you may have woken up feeling a little worse for wear. However, the 1^st of March will most likely have been due to the pressure of getting all your financial information together for your accountant in order that they can submit your relevant returns on time causing you to wake up the next morning suffering from symptoms like headaches, disorientation and even nausea when you realized how much tax money you had to hand over.

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Hopefully you are reading this article before 28 February 2013. If not then at least you will be prepared for 2014, because I wanted to discuss a few points regarding tax that may be applicable to you and your staff members.

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As we approach the end of the year I thought I would reflect on some business processes and practices that I often encounter when dealing with salons.

Over the years at ESP we have seen (and still see) many situations where salon owners are not managing their business processes in their best interests (according to best practices). As a result ESP actually trademarked the term BSP (Best Salon Practices) as we see this as the entire foundation for the use of our software in the salon industry.

Best Salon Practices is the application of the generic term Best Business Practices (BSP tm) into the salon environment based on common salon business processes.

At certain points in the future we will visit more Best Salon Practices (BSP tm) in the form of articles as these are numerous and evolving.

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While he was still alive Steve Jobs (Apple) and Bill Gates (Microsoft) were asked in a joint interview what character traits they admired most about each other. Steve Job’s answer was that he admired Bill Gate’s ability to partner with other companies.

The reason he said this was because his vision for Apple had always been to control as much of the end user’s experience as possible. However, he learned that you cannot do absolutely everything and that certain partnerships were necessary and would result in a better product and also a better experience for their users.

Bill Gates, from early on in his Microsoft career, had employed a much more open policy allowing Microsoft products to run on other companies hardware and as a result led to distribution of Microsoft products through many more channels with other 3^rd party development companies being able to develop their own products to run on Microsoft Windows, which further strengthened Microsoft’s position in the market place.

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The term Cost of Sales is one of those accounting terms that is common language for some but for most makes you want to curl up in a little ball and suck your thumb while rocking yourself gently for comfort. It really can be a nightmare to try and manage.

It has been my experience that many owners from within the salon industry couldn’t be bothered with cost of sales and the implications thereof. They see it more as a random requirement for their accountants. On the other hand salon owners who perhaps come from outside of the hair industry (like manufacturing or big retailing) are obsessed with cost of sales almost to the detriment of other areas of their salon business.

I think that owners from “big” business are used to dealing in very fine margins and if these margins are not controlled correctly the consequences can be extremely damaging to their bottom line.

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