BEAUTY BACKED TRUST NEWS
How to adapt your business to survive recession
January 23, 2023

Running a beauty or spa business can be expensive, especially with large amounts of water, electricity and gas being used, along with the need to purchase expensive equipment and keep products stocked up.

“One of the big challenges for our industry is the combination of a lack of confidence in the marketplace, together with rising costs of living which will affect customers’ decisions and their spending power,” comments Roy Cowley, founder and managing director of supplier 3D Aesthetics.

Of course, the current cost-of-living crisis doesn’t just affect business owners and customers – staff will be impacted too. “Another key challenge [for business owners] will most likely be the rising pressure from staff for an increase in wages and salaries,” Cowley explains.

While business owners will want to continue providing stellar service and looking after their staff, the money to do this needs to come from somewhere, whether it’s by cutting your running costs, changing your treatment menu, getting the team involved or taking advantage of financial support.

Here are some top tips on adapting your business to survive recession – without compromising on your treatments.

1. Make small changes to save money

Making drastic changes to your business can be daunting, and if you’re already stressed about finances then the last thing you want to do is worry about a complete overhaul.

A simple place to start is by checking whether you can save on any bills by swapping provider.

With the current energy crisis, it’s unlikely that you’ll be able to save by switching energy providers, but it’s still an option for things like broadband and insurance – use a few different price-comparison sites to shop around for the best option for your business.

Analysing your outgoings can also lead to some easy savings.

“Look through your bills and see if there are any changes you can make to instantly save money,” says Gemma Smalley, Midlands region trainer at Sienna X. “Are you paying for subscriptions you had forgotten about, or can you pay less per month for your card machine?

“You’ll be surprised just how much you can save by taking some time out to pick through your finances (when you have time away from clients, that is).”

There are also ways to save money on other essentials, like products used in treatments or retailed to clients.

“Buy in bulk,” says Smalley. “Although this requires a larger initial spend, and of course storage can be an issue, bulk buying is usually the cheapest way to buy products. Special offers and VAT-free shopping events are a perfect opportunity to stock up on your must-haves at the lowest price.

“I noticed last year that most suppliers were doing these to celebrate Bank Holiday, so have your cards at the ready for the next one.”

Timers are also one of the easiest and most effective ways to save electricity in your salon. If you’re a waxing specialist, “set one to turn your wax pot on and off so you’re not leaving it on all day whilst it’s not in use”, adds Smalley.

Looking for more tips on saving money in your salon? Check out our experts’ top tips.

2. Change your treatment offering

It might be that certain treatments are more of a hindrance than a help when it comes to making a profit.  

Smalley explains: “Analyse what’s working and what isn’t. Are you buying an expensive product that isn’t being used enough and is then expiring? Sometimes it’s better to cut back on doing unpopular treatments and just specialise in the ones that are really popular and are making you money.

Beauty salons should consider reviewing their treatment offering to see which services generate more hourly revenue,” says Cowley.

“There's no doubt aesthetic treatments can be more profitable than other treatments with lower profit margins. Our experience shows that beauty salons are striving to offer more aesthetic treatments and adapting to new trends as these treatments have a better ability to withstand the recession.”

Not sure where to start with aesthetic treatments? Find out which one is best for your business.

3. Get your staff involved

Although motivating your staff may seem like a tough task when money is tight, there are ways to get them more involved in boosting the business.

Cowley comments, “Beauty businesses need to appreciate the competition and ensure they're working on increasing staff retention – this can be an opportunity for developing a commission plan for their staff.

“[Staff] investment in the business gives more opportunities to review pay or salary favourably and can help with staff retention.”

4. Takeadvantage of financial support

The Government has offered some financial support to beauty businesses, although what is included, and the amount of money provided is subject to change.

For example, in January 2023 the Government announced its latest Energy Bills Discount Scheme, with businesses with an energy contract discount on wholesale prices of up to £6.97 per megawatt an hour for electricity and £19.61 per megawatt an hour for gas – this is applied automatically for eligible businesses.

There are also grants available from beauty organisations to help develop your business, such as the Beauty Backed Trust Grant Programme’s Support Grant which can be awarded to “established businesses and freelancers that need additional help and guidance to grow their business.”

Additionally, some brands offer packages to make it easier to invest in products or equipment, such as interest-free finance options or buy-now-pay-later. 3D Aesthetics, for example, offers the ‘3D Business Stimulation Package’.

Original article written by Ellen Cummings and featured here

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