Our response as humans to warnings is often hard to explain. We hear in the news all the time of massive disasters that could have been avoided if warnings had been listened to. The Titanic apparently received numerous warnings of icebergs but these warnings were not taken seriously and as we all know the ship sank on its maiden voyage.
The September 11 attacks in New York are another example where we heard reports of how intelligence warnings of imminent terrorist attacks were ignored.
Why is it that we so often respond inappropriately to warnings? I think that it has something to do with whether we really believe that what we are being warned about will come true or not. If we really believe that it will come true then we will listen to the warning but the more uncertain we are the less likely we are to listen.
I also think that there is something about the time it takes for the warning to come true that influences our willingness to react appropriately. For example, if eating unhealthily could lead to problems twenty years from now you are less likely to react compared with if it will have an immediate effect on you, like food poisoning or an allergy.
I think that more often than not people are reluctant to change their habits or their lifestyle based on something that may not come true.
I also think that much of the time it is easier to simply not even have the warnings and rather remain ignorant because if the warning turns out to be a false alarm then you didn’t lose any sleep over it and were no worse off than if you had known.
It’s usually only when it is too late that you look back and say “If only I had listened to the warnings”.
What kind of warning signs could you be on the lookout for in a spa?
I think that one of the most important areas to look for warning signs is therapists leaving. This goes without saying because not only will it disrupt your business as you try to replace them but they could potentially take many of your clients with them.
Looking back over your own experience I’m sure you will have many examples of signs that you either saw or missed of therapists leaving. You might have noticed a therapist’s keen interest in your client records, i.e. writing down names and numbers, or high incidents of sending SMS messages from their own cell phone.
One sure sign is a therapists motivation levels. If their performance over time deteriorates then generally their heart is elsewhere and they are biding their time at your spa while they make other plans.
Theft of stock and money are not uncommon in the spa and is extremely costly if it goes untraced for a substantial amount of time.
Checks and balances are critical and good systems need to be in place to achieve this.
Daily cash ups and regular stock takes are mandatory but ironically you should be aware of results that are too perfect or discrepancies that are small but regular.
If a staff member’s cash up balances perfectly to the cent every day then either they are super human or they are somehow manipulating the procedure. People make mistakes, it’s in our nature. If someone is out by R150 000 on their day end cash up then it’s pretty obvious that they have made a mistake somewhere, which is usually very easy to resolve, i.e. they added a few too many zeros in their money count. This will stand out like a sore thumb and will not indicate that the staff member is trying to conceal something. However, more subtle variances, i.e. if you are short by R20-R50 on a regular basis, require attention.
If clients are not returning to your spa then you will continually need to be attracting new clients to replace the old ones. This leads to money and energy being wasted on advertising and promotions and yields only short term results.
Monitoring a staff members client retention is therefore critical as it will tell you exactly who is keeping clients and who is losing them.
If you find that one particular staff member is losing clients then it does not make sense to keep sending all your new clients to them as their feeling of loyalty will be the lowest of all your clients. Either you need to deal with what is causing them to lose clients or send the clients to another therapist.
Listen to client complaints and follow up with new clients to ensure that clients return. If clients are not returning try and find out why so that you can deal with the problem.
Cash flow warnings cannot be ignored. It’s generally quite a simple concept, are you spending money faster than you are receiving it?
Warning signs will include debit orders bouncing, staff being paid late, supplier accounts running into arrears and your bank account going into overdraft.
Whenever possible pay creditors and staff as soon as you can. Put together a cash flow forecast for at least a three month period at a time to ensure that you will be able to meet your cash flow requirements.
For example, you know that staff salaries are due around the 25th, the rent on the 1st, perhaps a VAT bill on the 31st and so on. Focus on the bigger amounts and ensure that you have sufficient cash flow to cover these. If you have large supplier bills outstanding then include these as well.
A good warning system
Ensure that you have tools in place to act as warning systems. One obvious tool is a good computer system as this gives you insights into your business that are difficult to obtain manually.
As an exercise it would be worthwhile to use your own experience to look back at when things went wrong in your own business and try and recognise all the warnings that preceded these events. Make list of them so that you become more conscious of them in the future.
Be sure that you know where to look for warning signs so that you are not caught off guard. Ensure that you know as much as your staff do with regards to the management of your spa else they will have the upper hand.
Don’t always tell staff about the warnings that you are on the look-out for as they will know what to avoid if they are doing something that they shouldn’t.
Taking action is the most important part of the whole equation. If no action is taken then why bother talking about warning signs. Taking action is also the hardest part because most of the time you are not sure if what you are acting against will actually take place.
I think it is common sense that prevention is better than cure, for example, create an environment where it is not easy for staff to steal money or clients from you.
This requires being pro-active before the fact rather than re-active when it is often too late.