Ep. 14 - How to Reduce Expenses Without Sacrificing Value

Cutting costs doesn't mean cutting the quality of services you provide.

If you feel like your spa expenses are out of control, this episode is perfect for you. I'm going to teach you how to reduce costs strategically without affecting client experience or team morale.

When you ask your team to tighten things up a little bit, it might feel like you're taking things away from them. But that's actually not the case. You're trying to give them more. And in order to do this, we need to stop wasting money and start maximizing profit.

Why Cutting Costs Is Necessary (But Tricky)

As your spa grows, expenses are going to grow too. But not all of those expenses are necessary.

If you have a spa that's bleeding a little bit and you grow that spa, you're going to grow that bleed as well. So it's really important that you're tracking these things early on and eliminating them as quickly as possible.

If you don't track where your money is going, you're going to bleed profit without realizing it. It's a very common thing. I was SO guilty of it in the very beginning.

The key is to cut the waste, not the value.

Don't cut costs in the wrong place by cheapening your services or underpaying your staff. That will probably backfire and actually bring down revenue and profit.

Step 1: Audit Your Monthly Expenses

You need to know where your money is going before you start cutting costs.

I recommend doing this at least once a year, but usually twice a year.

Here's what to do:

Get everything you've purchased over the last 90 days. Look at all bank statements for the last 90 days and categorize them into three categories:

1. Fixed Costs Things like rent, utilities, payroll—the essentials.

2. Variable Costs Still super necessary for a business to run smoothly, but they can be optimized. This includes supplies, marketing, and products. These are costs you can adjust and tweak.

3. Luxury Costs We all have them. These are things like extra perks, unnecessary subscriptions, maybe paying someone else to come in and fold laundry when if you all pitched in and did one hour a week, it would be completed.

Here's what to look for:

• Are you paying for things you don't actually need or don't use?

• Are you overspending on supplies or back bar products?

• Are you running a promotion that's not actually bringing in revenue?

Avoid making random cuts without first understanding where the money is going and why it's there. This expense audit is meant to help you identify exactly where to trim the fat without affecting your business's core operations.

Step 2: Reduce Back Bar and Supply Costs Without Sacrificing Quality

Product waste is probably one of the biggest hidden expenses in spas. Many estheticians use more products than necessary during treatments.

A great way to check on this: Contact your supplier and see if they offer guidance on how much of each product you're actually supposed to be using.

I found this to be the case with our enzymes and masks. We were using SO much. The protocol said "apply a thin layer" because nothing extra is going to penetrate the skin.

What I did: First I measured things out for my own personal use to make sure it was accurate. Then I had a team meeting.

I said, "Hey guys, the thing I'm working on—my personal 90-day goal—is to go through all our supplies and see if we're overusing or overspending anything. Let's go over this together."

If you approach things from the perspective of curiosity, I find that your team really wants to work on things with you.

Other ways to save on back bar costs:

• Buy in bulk for discounts

• Negotiate with vendors. Send that email. Make that phone call

• Avoid choosing lower-quality products just because they appear cheaper

Step 3: Cut Marketing Costs by Leveraging Free and Low-Cost Strategies

This isn't quite a taboo topic, but if you're really in a pinch and trying to be smart with your money, I recommend cutting marketing costs.

Collaborate in your community. Reach out to other business owners that your ideal client might go to. We partner with a gourmet chocolate business, a florist, a massage therapist, a hairstylist, a microblader, and I'm working on a yoga studio.

Those were free. All I did was maintain those relationships and then said, "Hey, do you want to go in on a giveaway? Can I leave some cards at the front for your clients?"

Other ways to cut marketing costs while still growing:

• Email marketing. There are so many awesome CRMs that are free and convert really well.

• Client referrals. "Refer a friend and you both get 25% off." It'll serve you so well in the long run.

• Leverage social media and Google Business. Focus on organic reach before paid ads.

Avoid spending money on every new marketing trend and hoping something works. Focus on what's actually working. Track where your new clients are coming from and focus on that area only.

If you know new clients mostly come from Google, write a blog post once a week. If it's word of mouth, create a referral program. Then automate and systematize it so it's basically running on a loop consistently in the background.

Your Next Step

Do an expense audit this week. Look at those last 90 days and categorize everything into fixed, variable, and luxury costs. Identify one area where you can trim expenses without affecting quality.

Remember: cutting costs strategically doesn't mean sacrificing value. It means being smarter with your money so your business (and you!) can thrive.

Need help identifying where to cut costs without sacrificing quality?

Fill out this intake form to book a discovery call with me. Let's create a plan that maximizes your profit while maintaining the high standards your clients expect.