Cost? Investment? Understanding the difference will change your management overnight.

My origin: The 'cost consciousness' drilled into me as a tofu shop owner's son

Hello, I'm Sakuma, representative of CHOKIP.
Today, I'd like to talk about how management becomes much easier when you learn to distinguish between 'cutting' money and 'utilizing' it.

My family home is a tofu shop. I grew up watching my parents run the business, and there is something my mother taught me until she was blue in the face.

That is, 'thoroughly cut out waste.'

'There's a bean (the raw material for tofu) dropped there! Pick it up right now!' 'You're using too much water! You can wash it without using that much, can't you?'
'Hey! Who left the lights on!?'

Something like that.
I was educated like that every day. That's why I think I naturally understood how important it is to 'cut costs' in business.
Eliminating waste is the absolute basic of being a merchant, isn't it?

However, what I learned after becoming a working adult is that business does not grow with 'cost reduction' alone.
By focusing on costs and eliminating waste, you can establish a business that generates a certain amount of profit, but I learned that there is a limit to that at some point.

That's where the concept of 'investment' becomes important. When I talk to salon owners, I often feel that along with the 'costs' that should be cut, they are also cutting the 'investments' needed to create the future.

What is the difference between 'cost' and 'investment'?

In the first place, what is the difference between 'cost' and 'investment'?
It's easy to think of it as difficult, but it's actually very simple.

• Cost (expense): Something that does not increase sales no matter how much you increase it
  For example, utility costs. Even if you turn on the lights twice as much, sales won't double, right? These are things that should be cut as much as possible without lowering quality.
  

• Investment: Something that increases sales when used with ingenuity
  For example, seminar fees to learn new techniques or easy-to-use tools.
  By spending money on these, you can offer higher-priced menus than before, or reduce the time spent on one animal so you can do other work.
  In other words, it is money that comes back as a 'plus' later.

These two concepts are the same in that 'money goes out,' but their contents are completely different.

Specific examples of 'cost' and 'investment' common in salons

Now, let's think about it by applying it to a grooming salon.

【This is 'cost': It's okay to thoroughly review it】

• Utility costs: Like the old me, let's save money before your mother gets mad at you.

• Dormant inventory: Isn't shampoo you bought in bulk because 'it was on sale' sleeping in the back of the shelf? That's the same as having cash just sleeping there.

• Ineffective advertising: You continue it 'just because,' but there's no noticeable effect... such advertising expenses are just a cost.
  

【This is 'investment': Something you want to utilize for the future】

• Good scissors and tools: If used well, a shampoo machine is an investment with many returns, such as leading to shorter shampoo times, improving the quality of the shampoo itself, or even reducing the physical burden on the groomer.

• Reservation or medical record system: You might think, 'I don't like that my monthly payments will increase...' But what if the 'unpaid work' time of searching for paper medical records or organizing reservation books until late at night disappeared? With the time created, you could think of new services or rest properly to get in shape. The system fee is an investment to buy your 'free time.'

How should we think about 'salary' or 'the look of the shop' when we are unsure?

There are some things you might be unsure about, right?

• Staff salary: If you just think of it as 'paying because you need hands,' it looks like a cost. However, salary increases or training that makes staff feel 'rewarded and want to make the shop better' is a fine investment to increase the shop's fans.

• Salon interior: If you are just making it look nice, that is a maintenance cost. However, if you are creating features or an environment where 'dogs can relax' or 'staff can work comfortably,' that becomes an investment to increase customer repeat rates or boost staff motivation.

The important thing is to imagine, 'If I spend money on this, what kind of good results will come back later?'

Key points for salon management that leverages investment

Finally, let's summarize some points for effectively leveraging investment.

First, 'clarify your purpose.'
When spending money, always ask yourself, 'What is this for?'
- I want to increase the repeat rate
- I want to reduce the burden on staff
- I want to deepen relationships with customers
Clarify objectives like these.

Second, 'try it on a small scale.' There is no need to make a large investment all at once. Start by trying it out in one area. Then, it is important to observe:
- How things changed
- What kind of reactions there were
Third, 'look at the long term, not the short term.'

Investments may not yield immediate results. However, as you accumulate them over six months or a year, they will gradually take effect.
And finally, 'value the intuition of the front lines.' Numbers are important, but these changes that occur before effects appear in the numbers are also important signs:

- Customer reactions
- Staff expressions
- Ease of work
Reviewing costs is defensive management.
Thinking about investment is future-building management.

Do not choose one over the other; maintain a good balance of both.
In doing so, I feel that continuing to ask the question,
'Is this a cost, or is it an investment?'
will significantly change the future of your salon.

To gain future 'breathing room'

The 'spirit of cherishing every single soybean' that I learned at my family's tofu shop is still a treasure to me. However, that alone does not lead to a future or development as a business.
Are you unconsciously assuming that spending money is always a bad thing?
Wisely control costs and invest the saved money into the 'future.' By doing so, you will be able to give back even more to yourself, your staff, and your customers' dogs.

Change your perspective just a little, and from today, try thinking, 'Is this a cost? Or is it an investment?' That small realization should significantly change the future of your salon.

Thank you for reading until the end.
If you thought this article was insightful, please let me know by clicking 'Like.' Your support is my greatest encouragement!

<CHOKIP Representative Sakuma Profile>
Joined P&G Marketing Division in 1992. After leaving, established Colors Co., Ltd. in July 2000, which operates pet-related businesses. Over 20 years, managed 6 grooming salons and launched online retail operations. In 2013, became Vice Chairman of the Japan Pet Salon Association. In October 2022, established DAY ONE Co., Ltd., which provides DX/OMO support for retail and service industries. Develops and operates 'CHOKIP,' an electronic medical record system for grooming salons.