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ICO are a leading management company, specialising in structuring salons and spas for financial success. ICO's creator, Ian Egerton will be taking a look at how to successfully manage you business in a new series of articles. Here, Ian looks at benchmarking your business:

In our recent articles we discussed how to set prices to become most profitable! In this we look at benchmarking. What is benchmarking? It is a standard against which something can be measured or assessed. For example, targets are something to work towards, benchmarks simply establish your level of success against the target.

What should you benchmark?

You should benchmark areas most relevant to your business; for example, at ICO we recommend benchmarking several areas. Combined they are essential to growing a successful business. The key benchmarks are:

• Numbers of clients: knowing the volume of clients that pass through your business helps establish if it's growing, stagnating or shrinking.
• Client retention: retaining clients is essential to accelerate growth.
• Average service value: the new benchmark for measuring financial performance.
• Rebooking rates: encouraging clients to rebook their next visit directly after their existing appointment is an effective way to grow your business.
• Service sales takings: Service sales will go up and down, but can be driven up by knowing what you are aiming toward.
• Numbers of retail units sold: remove the mental obstacle of retail sales and measure retail in units (number of products) rather than a cash value.
• Retail sales takings: a good benchmark for an overview but not as concise as knowing the number of retail units sold.

There are many more elements to benchmarking but this list is a great starting point.

Next time well discuss benchmarking team members for financial success. In the meantime, if you would like to know more about how to build a profitable business, create a pricelist, set salaries or benchmark your business call ICO on 020 8903 1286 or visit www.salonperformance.co.uk.