Study Shows 56% of Salons & Spas Use Business Management Software

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Small businesses are booming. According to DaySmart Software’s survey report on technology trends impacting U.S. small businesses, including one focused on the salon and spa industry, the last year was great for small business owners in terms of growth and revenue. In fact, 67 percent of respondents increased their salon or spa’s sales from 2017-2018. Sixty percent of spa and salons reported to make over $100,000 per year, while 30 percent make more than $300,000. The national study by the makers of Salon Iris and Orchid examined how small business owners are leveraging technology to grow their businesses and the challenges they’re facing along the way. 

“The digitization of the way we work and live has forced small business owners to rethink their manual methods—but that’s not always an easy task,” says Jeff Dickerson, CEO of DaySmart. “This survey validates the importance of having a holistic software solution that can make the transition to automated and digitized operations more efficient, and ultimately help small businesses grow faster than ever before.” 

Credit: DaySmart Software Report
Credit: DaySmart Software Report

Competing with big brands and other local shops while trying to create long lasting, loyal customer relationships and wearing multiple hats within the business makes that success no easy feat. Even though there is an increase in sales, many business owners are still worrying about the challenges of growing and running their operations. Survey respondents identified five main challenges facing U.S. salons and spas: marketing to prospective or current customers, making enough money, controlling costs, finding new customers, and managing time. 

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By investing in the right digital solutions, business owners can use technology not only to manage their challenges but to do so in a way that allows the business to thrive. More than half—56 percent—of salon and spa owners have adopted business management software, and the benefits for them are endless; 62 percent reduced manual effort and paperwork, 56 percent decreased missed appointments, 52 percent increased customer satisfaction, 50 percent improved work life balance, 30 percent improved marketing capabilities, and 30 percent increased sales revenue. 

Of respondents that used business management software, 66 percent have it connected to their point-of-sales (POS) systems. Similarly, 64 percent currently implement software with integrated credit card processing. Of those with integration, 68 percent improved checkout speeds, 24 percent better assigned penalty fees, 20 percent decreased no-shows, and 14 percent better billed for recurring charges. 

It’s not surprising that the most important feature that small salon and spa business owners look for in software is scheduling, followed by automating customer communications, POS, inventory management, accounting and finance, automated marketing, and website development.

 

Credit: DaySmart Software Report

Spas and salons also reported they plan to use the software to continue their business growth in 2019. In order to improve sales, 34 percent that use the software plan to hire more employees and 37 percent are investing more in marketing—two factors that indicate a readiness to attract and serve new business. 

The concerns that salon and spa owners have when it comes to the software largely lies with managing cash flow and managing inventory. In fact, they tend to be more worried than their counterparts who do not use business management software.

Credit: DaySmart Software Report

The difference is monumental when it comes to revenue as well. Small business respondents who use business management software, not just those in the salon and spa industry, make more money than those who do not. Seventy-two percent of those who use business management software reported making more than $100,000. Only 60 percent of those who do not use software can say the same.

When it comes to the type of software, the decision is still split. Among those who use business management software, 44 percent recognize the benefits of cloud-based products, while 33 percent prefer on-premise software. But this adoption may be generational with those who grew up in the digital age more likely to use business management software. 73 percent of small salon and spa business owners who use software are 25-44 years old, 20 percent were between 44-54 and only 7 percent were older than 55. 
 

Credit: DaySmart Software Report

With such large success, it seems obvious those who do not already should invest in business management software, but results show it’s not that simple. The number one barrier to software adoption for salon and spa owners is a lack of budget resources. Additionally, 23 percent lack an internal expertise required, 16 percent report an unclear understanding of which tools are required to solve business problems, 13 percent are concerned about cybersecurity risks, and seven percent report focusing efforts on hiring rather than software adoption. 

As salons and spas are investing more in technology, their priorities largely speak to the priorities of the consumers and the market. Thirty-six say the top area of investment is marketing software, 33 percent says POS systems, and 16 percent says cloud software. Hardware is another point of investment this year for salons and spas. While 62 percent use desktops to run their business, mobile technology is also on the rise—55 percent use smartphones, 42 percent use tablets, and 30 percent use laptops.

In addition to technology investments, salon and spa owners are prioritizing marketing efforts to improve sales this year: 65 percent indicated they plan to invest more in social media while 32 percent are experimenting with new marketing channels. Thirty-four percent of respondents say they are hiring more employees to improve sales instead. 

The full small business report is available to download here. For the salon and spa industry specific report, click here. Don't miss American Spa's annual Industry Insider report in the July/August issue, and our informative webinar on August 18. Registration will soon be open here.



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