HOW TO SET TARGETS FOR YOUR SKIN CLINIC OR BEAUTY SALON
PLUS BONUS: The Fin 2025 Targets for Australian Skin Clinics and Beauty Salons
We all know the beauty industry, in particular the skin side of the industry, is a unique beast, straddling the line between service and retail. But unlike your typical retail businesses, where customers can browse, pick, and purchase on their own, your industry’s retail aspect is anything but independent. It’s intrinsically tied to the services you provide. This distinction is crucial and has profound implications for how we think about generating revenue and measuring productivity in our businesses.
The Beauty of Retail Services
Let’s start by acknowledging what makes the beauty industry different from, say, a clothing store. In a clothing store, a customer sees something they like, they try it on, and if it fits, they buy it. They don’t need much more than a mirror and often no or little help from the salesperson. The same goes for a grocery store. People know what they need, they grab it off the shelf, and they’re on their way.
The Beauty industry? It doesn’t work that way. The retail side of your business isn’t something that clients can engage with on their own. No one walks into a salon and starts picking skincare products off the shelf. Why? Because they don’t know what they need, and that’s where your therapists come in. They’re the experts, the ones who prescribe the right products as part of the service. The retail aspect of our industry is inherently a SERVICE—something that requires the skill and knowledge of a trained therapist to make happen.
Time Isn’t Just Money—It’s Everything. : The Clock Is Always Ticking
This brings us to a fundamental truth about YOUR business. Just about all revenue generation revolves around time. Time is your most valuable asset. Every service you provide and every product sold is tied to the time your therapists spend with clients. It’s not like retail stores where products sit on the shelves until they’re purchased. Because the retail sales of your products are “serviced-based” if a time slot isn’t filled, that hour and opportunity is lost forever. No treatments performed; no retail sold. There’s no getting that time back.
This means that every single hour is either an opportunity gained (booked and revenue optimized) or an opportunity lost (no revenue, but still the cost of wages).
Think about that 10 AM appointment. If it’s empty, that time is gone. Done. Gone forever and that time cannot be made up. We call it ‘downtime’ but let’s not kid ourselves, downtime is nothing but a wage expense and an opportunity lost, revenue not generated . That’s why it’s so crucial for both employers AND EMPLOYEES understand and appreciate that how your business generates revenue is TIME-BASED.
AND BECAUSE OF THIS, HOW YOU MEASURE YOUR THERAPISTS' PRODUCTIVITY
MUST ALSO BE TIME-BASED.
Hourly Revenue Targets: A Simple Yet Powerful Metric
Given that time is the currency of our industry, it makes perfect sense to set revenue targets on an hourly basis. Why? Because it creates a consistent performance expectation across the board, whether a therapist works part-time or full-time.
Let’s say you set an hourly revenue target of $170. That means a therapist working 10 hours in a week needs to generate $1,700 in revenue, while one working 38 hours should bring in $6,460. By setting these targets, you’re standardizing performance expectations, making it easier to assess and compare how well each therapist is doing. It levels the playing field, ensuring that everyone is held to the same standard, regardless of how many hours they work. And this isn’t just about fairness—it’s about clarity and focus. When everyone knows what’s expected of them, they can aim to hit those targets with precision.
The Opportunity Cost of Unused Time
Let’s delve a little deeper into the concept of opportunity cost because it needs to be vital to the way you think about your business. Every downtime hour not filled with a client is not just an hour lost—it’s a missed opportunity to generate revenue. And the cost isn’t just financial; it’s psychological. For exceptional therapists, unbooked hours can be disheartening, while for those less driven, it can quickly become a complacency they settle into.
The reality is that every minute matters. You’re either making money or losing it. There’s no in-between. That’s why it’s essential to keep your eye on the clock and ensure that your therapists’ schedules are optimized to the fullest. This means not only filling up the appointment book but also making sure that each appointment is as profitable as possible.
Standardising Performance for a Stronger Team
By setting hourly revenue targets, you’re not just setting goals—you’re building a culture of accountability and excellence, whilst allowing you to identify who’s excelling and who might need a little more support or training.
Moreover, this approach simplifies the management process. You don’t have to juggle different metrics for part-time versus full-time therapists. Instead, you have a clear, straightforward way to measure performance across the board. This transparency can be incredibly empowering for your team because they know exactly what’s expected of them and how they’re being evaluated.
By embracing a time-based approach to revenue generation and productivity measurement, you’re not just setting your business up for success—you’re setting it up for long-term sustainability. In this industry, time is money, and making every hour count is the key to maximizing your revenue and achieving your business goals.
BONUS AS PROMISED
The hourly target for Australian based businesses depends on how equipment heavy your business is.
Minimally equipment-heavy businesses – Target is $170/hour
These are businesses where their advanced skin treatments are performed predominantly using cosmeceutical-grade ingredients, such as in peels and equipment that cost less than say $50,000 a piece to purchase. We’re talking LED machines, microdermabrasion, micro needling. Also, these businesses may or may not offer beauty treatments.
Heavily equipment-heavy businesses – Target is $250/hour
These are businesses where most, if not all of the treatments are performed using equipment that cost a lot more than $50,000 a piece such as laser machines or other equipment which can cost in excess of $100,000 each to purchase.
Moderately equipment-heavy businesses – Target is $210/hour
These businesses are 50/50. In these businesses, their advanced treatments are made up of both minimally equipment-heavy treatments and heavily equipment-heavy treatments.
Let’s go back to the Wage and Productivity Calculator to access the different productivity targets.
For well over a decade, the course “How to Pay and Incentivise Your Therapists” has been a guiding light in the area of how to pay therapists, measure their productivity and know how much you can affordably pay more whilst being motivating for your therapists” Updated every year, the Fin 2025 version is available now and for a limited time discount of $75. Simply add 75INCENTIVE at the checkout. Click here.