After a tumultuous 12 months, it’s time to financially vaccinate your business! The first step is to tackle some of the unhelpful stories I’m hearing salon owners telling themselves right now.
No-one has any money right now
Of course, some people are struggling –but not everyone. The fact is that many people are better off financially than they have ever been. They’ve been working from home, making their normal salary without the added expense of travelling to the office, buying take-away lunches, or even going on holiday.
Though you may personally be experiencing tough times financially, it doesn’t mean others don’t have cash to spend. In fact, many people are sitting on extra money and looking for somewhere to spend it that will help them feel good.
You can’t compete with online retailers
You have got to believe that you can do big things in the online space. There is a groundswell of support for small, local and family businesses which can serve you well.
Make it possible for customers to spend with you 24/7 and make sure you have a great story to tell that will resonate with your target customers. Setting up an online store has never been easier – dip a toe cheaply with Shopify, Wix or even just list your products on your salon Facebook page.
You can’t charge for PPE
A year ago, I was recommending adding a per-visit supplement for PPE to our regular prices. That was when we all thought the pandemic would blow over in a few months. That simply isn’t the case any longer and I am now recommending we price the PPE in to our list prices. However we re-open and however long the journey out of lockdown takes, the requirements for extra precautions aren’t going away any time soon.
Customers will leave if you increase prices
This myth assumes that the only reason customers come to you is because of what you charge. That’s simply not true, or the cheapest salon in town would also be the busiest and most successful salon in the area. Customers are much more resilient to price changes than we often assume. And even the most hardened regular customer will expect to see price changes in today’s economy.
With so many salons going out of business, the price the market will tolerate has gone up. Additionally, the perceived value of our industry in terms of what we bring to the high street, the economy and the emotional wellbeing of society has increased exponentially. All of these things have increased the demand for salon services. An increase in demand and a decrease in supply means that you, as a salon owner, can afford to raise your rates.
Your customers won’t like going cashless
You may want to consider going cashless at your salon. Customers have grown accustomed to visiting establishments where cash is not allowed. We went cashless over five years ago and I would never go back.
My insurance costs even reduced after having reported that there will be no cash on site! In the early days there were occasional grumbles from clients but that was quickly outweighed by a salon PDQ that actually balanced every night!
You need to do it all
When you niche down, you reduce the number of competitors who offer the services you do. Reducing competition means an increased share of a unique market – and that allows you to charge more. Examine any services you don’t enjoy and consider removing services that don’t pay well.
However, be aware that occasionally less profitable services are
‘gateway’ services that lead to more profitable spending later in the client journey. Tapping into a specialised market increases the geographic reach of your salon and to be blunt, people will pay more for an expert than they will a generalist.
We can ‘go back to normal’
Though offering a familiar and much-loved experience will bring a huge sigh of relief to our customers, we have to change the way we have been running our businesses. We’ve learned that the insurance industry can’t be relied on to have our backs and though the government has spent billions keeping the economy functioning we must appreciate that there isn’t an infinite supply of financial help. There will be a ‘next time’. Consider putting even a tiny fraction of turnover away in your ‘war chest’ to self-insure and financially insulate yourself from future crises.