For service professionals in the beauty and fitness industries, the ability to receive deposits for pre-booked services and classes can be key to safeguarding both your time and income. After all, both your daily schedule and daily earnings are dependent on clients showing up for services and classes for which they’ve reserved your time in advance. A no-show or last-minute cancellation leaves an empty time slot on your calendar where you’re not earning any money. It also deprives other customers from filling that time slot. Client deposits are the small business professional’s way of ensuring that even in the event of a cancellation, their time and earnings are protected. Likewise, for clients, a deposit secures their appointment and offsets the total cost by effectively splitting the payment into the deposit percentage and balance due.
Client Deposits Protect Your Time and Resources
The greatest benefit of requiring client deposits to book appointments, services, and classes is the ability to protect your time and resources. In service industries such as beauty and fitness, payment is usually the last step of a transaction, which puts service professionals at a disadvantage. The reason for this is that the time being booked doesn’t have a “perceived value” to the client until the service begins. By contrast, for the service professional, a schedule of booked services is a projection of their upcoming income, and any changes to that schedule impact their livelihood. By requiring client deposits to book services and classes in advance, the time being reserved now has a perceived value—the deposit. Additionally, deposits offset the overhead cost to the service provider, which is especially important if a service or class requires pricey materials or equipment. Rather than these costs being an out-of-pocket expense that can’t be recouped until the completion of the service, deposit funds can purchase the required materials.
Deposits Close the Gap Between Projected Income and Actual Income
Likewise, deposits close the gap between a service provider’s projected income and actual income. For example, say that you’ve got a full day booked, and a quick tally of your services indicates that you should earn $500. In this example, half of your daily earnings—$250—depends on services for which you’ve required a 50% deposit. This means that with deposits, $125 of your daily income is secured in advance, the same way that your time has been secured in advance. In this scenario, if your client doesn’t show for their service, your income is still safeguarded. Rather than losing half and earning only $250, you’ve “closed the gap” between what you projected to earn ($500) and what you’ve actually earned ($375.)
Sample Scenarios for Using Deposits
Not sure what using deposits would look like in your small business? Here are a few sample scenarios for using deposits in your salon, spa, barber shop, fitness center, gym, yoga or dance studio. Whatever business you operate, chances are, you offer a specialized service, class, or series where requiring deposits could protect your valuable time and resources!
- In the salon, use deposits for pricey, time-involved services, such as hair extensions, multi-process color services, or keratin straightening systems. That way, stylists won’t pay out-of-pocket or get stuck with expensive, non-refundable products and materials!
- In the
spa, specialized services can be upwards of $1k. Rather than using IOUs or other
forms of manual tracking, deposits allow you to accept a partial payment at the
time of booking. Then, both the business and the client will be alerted to the
remainder due upon completion of the service.
- For fitness centers, gyms, and specialized studios such as Yoga or dance, deposits are handy for making sure a class that looks full on the books earns its full potential. For example, if a $10 per person, 20-person class is fully booked online, the class should earn $200. However, without deposits, if 5 people don’t show up for class, the class loses 1/4 of its projected revenue. With deposits enabled, you can ensure that a fully booked class brings in its projected revenue.
- For special events such as bridal
parties, prom bookings, or group event bookings, deposits ensure that the
service provider time, business resources, and overhead costs are allocated in
advance. This means your working capital isn’t tied up in a booking that takes
up your whole workday!
Ready to protect your time and resources with deposits? Add Vagaro Merchant Services to your scheduling software and then enable your Online Shopping Cart. Then, you’ll be just a few clicks away from making sure that when services and classes are booked, you can rely on the revenue immediately.
Header Image: Mia Montemayor via Vagaro