Beauty Business Strategies
The podcast where salon, spa, medspa, barbershop, and lash studio owners — just like you — learn quick tips to make more money, inspire your team, and create world-class client experiences.
Beauty Business Strategies
Cutting Costs, Not Creativity: Salon Profitability with Vish
In this episode, we sit down with Tim Howard from Vish to uncover how salons can dramatically cut color waste, improve profitability, and create a more sustainable business. Learn how Vish’s groundbreaking technology reduces waste from 40% to just 5%, while making every service on your menu equally profitable.
Tim shares insights into the latest trends in salon data and practical tips on how to maximize your color bar's efficiency. Discover how smarter pricing strategies and streamlined systems can empower you to take control of your salon's finances and create a better client experience.
Watch the video version of this episode: https://youtu.be/KN5x-nGlEQU
Connect with Vish: https://hubs.ly/Q02-1K3T0
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The Beauty Business Strategies Podcast is designed to give salon, spa, medspa, barbershop, and lash studio owners, just like you, quick tips to make more money, inspire your team, and create world-class client experiences.
All right, well, welcome everyone to the Beauty Business Strategies Podcast. Again, happy to be with you. My name is Michael Yost and today we are joined by Tim Howard. Tim, how are you? I'm doing really well, thanks.
Speaker 2:Awesome, really well so just before.
Speaker 1:if you're not familiar with Tim, he's with a spectacular company called Vish, and if you're not familiar with Vish, you know what. I think the best thing to start out with Tim is give us a little bit about Vish for those not familiar about what Vish is, what it does, and maybe it'd be great just to give like a little bit of just backstory about where did Vish begin and its beginnings, so why?
Speaker 2:don't you take us on?
Speaker 1:that quick journey.
Speaker 2:Yeah, I'll start there and I'll apologize in advance because I'm on this topic in particular. I'm a bit long winded. So, michael, you can give me the all right, we've heard enough at any time. So my background has been in the hair business since I was 19. I've wore many hats as a salon owner.
Speaker 2:I worked for a product company, aveda for many years as a guest artist and educator for them, and then, during the time owning the two salons that I had, a lot of problems just existed around our salon and I've always been really curious and interested in technology. So, looking at the front desk and looking at our booking system and our POS so looking at the front desk and looking at our booking system and our POS, I'm thinking, why is it not communicating with our color bar? And I know there's a lot of problems on the color bar that aren't being solved and I know technologies can solve them. How I knew they existed and technology could solve them is because I was writing everything down. I was going to the color bar, I was making my formulas as a hairdresser and, being honest, recording about 20% of the things that I did, and then at times we then go back into the POS and type everything in. When it comes time to do a hair color order, I would have to do a color count. I would have to go into the POS and then manually update my stock take so that I can generate an order and then manually update my stock take so that I could generate an order. So, just knowing that that was a manual process that could be replaced by technology, started looking into how we could solve the issue and at the time scales were not at the technology that they are now meaning weigh scales. They weren't Bluetooth, they were not wireless, they were lab scales that required them hooked up to a computer and color bars or something.
Speaker 2:I knew it wasn't time, so I just sort of went into the industry with all my cohorts and just started talking about it and getting validation if this was a good idea or not. I finally sat down and I was looking for an engineer at that point to help build the code, because I am far from an engineer and met with somebody. We started working on the project and then Bluetooth technology came out in color scales. So we knew that we could start the project and initially the project was about really eliminating the waste and just having more visibility of what's going on at the color bar. But of course, as you create something, the customer is what really drives the evolution of the product. So we started to look at, you know, as we're pulling in this data and we're mixing formulas and we're getting rid of waste, well then we start to see all these other things unfold, which is where all the cost and the money is going. So we then set out to kind of change how Vish operated so that it wasn't just focused on the color waste, because we knew we could do so much more.
Speaker 2:Um and then and that was the early days so, as we started to get our feet uh, our feet wet and started to build this software, what I've learned is really important to this day is, you know, make sure that the engineers are building what you need. So what it turned out was my partner at the time was an engineer who built code that was what they call spaghetti. It was not healthy code, so it kept having rife with problems. So we ended up parting ways and we formed the second version of Vish and we went back and built and it was a really valuable lesson.
Speaker 2:You know, our first foray into building technology for the salon industry, which technology has to be so secure and stable. There can be no interruptions to what that person's doing every day. You know, early days I likened it to Uber. When the Uber app goes down, you can't do your job, which means you can't make money. We've always treated Bish the same way. It's to create a tool and technology that people can use every day. It's stable, it's secure, it's fast, and we continue to evolve that to make it better, not only for the salon owner, but really focused on the hairdresser. And earlier this year we released Vish 2.0, which was let's take all the information we learned over the previous five or six years and let's start from scratch again and build the new version of Vish, which is what we did. And again, that was released earlier this year and it has been a game changer for everybody. We're very proud of that product.
Speaker 1:Awesome, awesome stuff. So I love the fact that, like you shared, I love the fact that started with, like you know, there's a need out there. How do we meet a need? And what's interesting and we can kind of get into this, I'm sure what's so fascinating is and you kind of hinted at it a little bit is, I'm sure, like most things, you start to try and solve one problem and you discover all the other things that you probably start finding all these other data points and pieces of information that it just kind of starts expanding, even you know, beyond maybe what you initially thought this would be. And you know, I think we can kind of get into a little bit of that. But let's kind of start with the core, which is so at the core of this.
Speaker 1:This really, you know, this is really about this idea of how can we be more efficient with our costs and the idea of where waste is in a big key area in businesses, especially around color waste. Again, it's something that is predominant out there. So give us a little bit about what you're seeing. So, again, where waste fits in to us and I know, with you and as we've talked over the course of our times together is this all comes down to pricing and being able to price properly and saving cost and various things. Where do you really see in that area? Where do you really see the greatest? What are you noticing as far as greatest gains and opportunities in that area of pricing and waste and expenses?
Speaker 2:Yeah, okay. So if we think about waste and you know, in order for you to be environmentally sustainable in a business, you need to be financially stable first, or sustainable, so you need to be profitable. It's great to say that we're going to do all these environmental measures, but it's important to be environmentally focused and they go hand in hand with each other. So by eliminating the extra color that you're using that has such an impact on the business, of course you don't have to raise your prices as frequently and you don't have to order as much color, which means, from an environmental standpoint, the manufacturer of that hair color is producing less, shipping less, and then we're throwing away less packaging and we're throwing away less waste that's going into our waterways. So there's the environmental side of that, and we resolved that really quickly. Most salons start at a ratio of 40% waste, which is two out of five color tubes get thrown away, so a massive problem. And then, in order to combat that, what we end up doing is raising our prices. And what does that do? Our most loyal, frequent customers, who come every six or eight weeks? It's impacting them the most and they're the ones who aren't using a ton of color, so it's off-putting. And then and then we try to combat these increased prices again by raising prices. And then the lion's share of that is going to the hairdresser where, when we looked at the services that are happening across the board, your highlighting services have been the most profitable historically, and that's because you could charge a higher price for that service and the cost of goods is much lower. The average cost of a lightener per gram is about five cents. Where you look at what color costs, it ranges between 15 and 25 cents a gram. So we have these services like toners and new growth applications which, yes, they're less booking time, but the cost of goods are four or five times the amount of a lightning service. So what Vish sets out to do is make every service on your menu equally profitable, and how we do that is we price adjust. So your menu is set up and your prices are set up based on the area that you're in, the experience, level of hairdresser, cost of goods, the time to book that appointment or time to apply that color All those things factor in. But if what we're looking at and we're fortunate at Vish that we pull data from a lot of salons and we take that data and dissect it so that we can re-strategize and really see what's going on in great detail in the salon.
Speaker 2:One of the things that we found recently is, if you look back to 2023 and compare to 2024, customers are stretching their appointments out by an additional eight days. So think about that. And in that time, we know inflation has caused a lot of other costs to go up as well. Maybe your hair color has increased by 5% or 7% the cost of goods from the manufacturer. You're absorbing all of these extras, which means you're eroding your profit. So what we aim to fix is well, let's adjust that price so that not necessarily. Look, everybody should do a price increase annually. We get that, but that doesn't resolve the problem.
Speaker 2:And if we go back to that client who's now coming in eight days later, how are you making up the difference for that? That extra color is being used? Or you have a subset of your clients who are coming in every six or eight weeks for, say, a root touch-up, and then you have another subset that typically come in every 10 or 12 weeks. Your booking time is the same, your commission rate is the same, but yet your cost is up to 30% more. So what Vish does is we put that threshold on every service.
Speaker 2:This is the standard amount of color that should be used in this service and that is based on. You know, if it's permanent color, what is your most frequently used permanent color line? Here's how much color you should use. Let's say 40 grams at an eight-week service. Anything over and above that use a more expensive product. You use more color. We'll price adjust that at the front desk.
Speaker 2:If the guest, if no extra time was taken, let's only charge for the color used with a markup. That revenue goes back to the salon and what we're able to do there is do that consistently and keep the cost down to the customer so they don't get sick or shocked. And then the most frequent loyal customers who don't use extra color are not being charged more. It's the people who are coming in a little bit later who are having a little bit of extra work done, because what we see consistently across the board is that we're really good at hairdressers being creative and delivering great service, but we're not always good at charging those extras when we need to.
Speaker 2:It's inconsistent. We're not always good at charging those extras when we need to. It's inconsistent. So if I've mixed extra color and maybe it's only 15 grams. My salon says that I'm to add an extra bowl fee. By doing that, I'm charging the guest $25 for a little bit of color. I don't feel justified. I don't always charge it and then the salon is losing money and the guest experience is. Sometimes I pay more, sometimes I pay less. It's inconsistent. So we simply just make it easy to understand. Push that information to the front desk, it gets collected and now we can aim to get your.