1. Salon & Spa Industry An Introduction Florida State University Tues 7 Oct 2014 Martin Edwards | Director of Marketing

2. Presentation Overview o Industry & Demographics o Business Type and Models o The “Average” Salon o Measurements for Success o Customer and Behavior o The Rise of Technology o An Introduction to SalonBiz o Questions

3. Industry, Market & Opportunity o 80,000 establishments in the US (76,000 hair/beauty salons; 4,000 barber shops) o Combined annual revenue of approx. $20 billion* o Industry CAGR projected at 3.4% thru 2018** o US industry highly fragmented: the 50 largest companies generate about 15 percent of overall revenue o California has more salons than any other state, followed by Florida, Texas, New York and Illinois* o In 2012, 35% of US salons featured some form of a booth rental model, with studies suggesting that this will exceed 50% of salons by 2015* Source : *PBA Annual Study 2014 **Lucintel Research

4. Types of Business o Hair Salon o Salon & Spa o Spa (Stand alone or Hotel/Resort) o Booth/ Suite rental o Mobile

5. A Typical Salon o An average salon employs 8 people, 2 of which are support staff o Generally owner operator managed o Across all professional beauty businesses, the majority (34.1% for the industry on average) are in the $100k to $250k range for total revenues (retail plus service sales) with the average being just over $250k. o Typically, around 68% of revenues come from hair services and 11% from retail o Profit margins average at 10.7% nationally. o The average client spends about $67.17 per visit on services and will visit on average 8-12 times per year. For retail purchases, the average is $20.55 per visit

6. Measurements for Success o Monitoring and coaching the team is key to ensuring overall success o Keeping the largest single expense productive is essential 80% $65 70% 50% 30% 1500 $15 33% Healthy

7. Expense Benchmarks o Controlling payroll expense is key o Supplier relations important o Minimize marketing spend o Software not a large expense

8. Customer & Behavior What the Salon Would LikeCustomer’s Natural Behavior Pre-book next appointmentRush to leave and will call later to rebook Purchase recommended homecare products Will just wait and buy them next time, or pick something up in the grocery store Refer all their friendsKeep their amazing stylist a secret all to themselves Use the services of the spa for nails, waxing or massage Go to their favorite place for each of these services separately

9. The Rise of Technology

10. What does SalonBiz Provide? Appointment Scheduling & CRM Marketing & Communications Reporting Point of Sale Inventory Control Unlimited Education & Technical Support

11. Features Full Salon & Spa Management Software including Inventory, POS, Scheduling & CRM Mobile Access inc Booking for Owners, Managers & Service providers Powerful, flexible Custom Report SuiteConsumer Online Booking & Gift Card Sales

12. Features Tablet Tool – Rebook and recommend Product at the chair/spa room Performance Board – Break room display Central Dashboard – KPI’s displayed In an easy to digest format Integrated Credit card processing With Chase Paymentech

13. Demandforce Integration Appointment confirmations by SMS & EmailCollect and distribute reviews Email Marketing & Communication www.demandforce.com

14. Why SalonBiz? Cloud Based o Access from anywhere o Hardware agnostic o No backups required o No server costs SalonBiz Mobile o Booking on the go o Keep an eye on key metrics o View client history to prepare for visit o Update important client notes SalonBiz Whiteboard o Transparent performance statistics o Ideal for in-the-moment coaching o Keep stylists away from the front desk o Removes need for extra lookup station Inventory Control o Track product usage to limit waste o Control par levels to manage stockholding o Save time when ordering Integrated Credit Cards o No terminal required ($$) o Better rates than many banks o Quicker checkout for client o Speeds up batching at end of day Tablet Tool o Recommend retail at the chair o Rebook from the chair o Update client details o Reduce bottle neck at the desk Demandforce o Save time on confirmation calls o Reduce no shows o Reach new guests o Gain Important feedback Online Booking & Gift Cards o Stay open 24/7 o Generate additional revenue around holidays o Less phone calls to front desk Reporting o Track performance o Identify opportunities o Save time on manual process

15. Questions? www.salonbizsoftware.com martin.edwards@neilltech.com 985-507-6769 888-634-5570 x 2510