Do you know your A.C.T. (Average Client Ticket)?

With all of the prosperity coaching, it seems that everyone is a six-figure this or that! However, as an entrepreneur it is extremely important that you understand what you can expect to earn in a single day/week/month. Your guests are likely your main source of income and it should be your mission to track and increase that income.

So what is your ideal average ticket number? If you can’t answer that right away, don’t panic!! We ask our clients to start with their personal obligations. You know those things that show up in your mailbox every month, yes those Bills!! How much income do you need to cover your living expenses each month? Once you have gathered that information, we can move on to your business expenses. These expenses may vary depending on whether you are a booth rent or commission stylist, so you should apply where applicable. As a stylists you may have weekly booth rent, product expenses, marketing expenses, etc. Once you have your expenses mapped out, we can work backwards to understand what your ideal average ticket should be.

 

Case Study:   Amanda, Hair Stylist in San Francisco

  • Personal Expenses
    -Rent $1500
    -Renter’s Ins $40
    -Food $500
    -Electric $150
    -Car Ins $150
    -Cable $100
    -Fuel $400
    -Car Pymt $400
    -Credit Cards $250
    -misc. personal $300
    -Student Loans $200

 

  • Business Expenses
    -Product $300
    -Mktg $100

Total Expense $3840

When Amanda contacted us she had been operating at a deficit for about 4months, meaning her expenses exceeded her take home income. She is a commission stylist at a mid-level salon in San Francisco. Her commission is 60/40 and she was responsible for some product chargeback (usage). However, for the purpose of this we will discuss the client ticket only.
Amanda specialized in color, therefore, we asked her to provide us with one month’s worth of client tickets so that we could begin to decipher from where her net loss derived.

30 days of client tickets:

20color clients @$105.00
15 color clients @140.00
5 men’s cuts @25.00
5 cut/styles @$75.00
4 Blowouts @$40.00

Gross Tickets = $4160
Commission (4160*60%)= $2496

Net Income $2496
Expenses -$3840

Net Loss -$1,344

Amanda was bleeding $1300 per month. So, what was her average ticket?

Gross Tickets ($4160) / # of Guests (49)
= gross Average Ticket $84.90
Net Average Ticket ($84.9*60%) = $50.94

We use the $50.94 as Amanda’s average ticket because that is her take home commission after the salon’s 40% cut. Now we use this number to calculate Amanda’s Breakeven goal and short term goals.

Breakeven (Income = Expenses)

$3840/$50.94 = 75 guests

Amanda would need to increase her production to at least 75 guests per month to Breakeven.

12 month goal (Net Income 2xs Expenses) Goal = (3840*2) = $7680

$7680/$50.94= 150 guests

Amanda’s homework was to speak with her salon manager and develop ways to increase her guests to at least 75 per month.

This is a classic example of how some stylists get stuck on the wheel and cannot figure out how to get off. Sure she could increase her rates, however, it is unlikely that a simple rate increase would solve her issue. The solution is to figure out how to draw more attention to her skills and utilize her current guest list for referrals, etc.
However, how she increases her monthly production is another subject. We want you to grasp the idea of understanding your client ticket and doing this exercise for yourself. Let us know what you think!!

We want to hear your story. We will be picking 2 motivated stylists to go through our 3 month jumpstart training based on the responses we receive.

Email: info@thechicaccountant.com

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