Business Featured

NHBF Talks | Handling your finances in 2020

January 07, 2020

NHBF chief executive Hilary Hall offers some key advice for handling your finances in 2020

How can salons make sure they’ve got their prices right?

As a first step, add up all your outgoings, for example, wages, stock, rent, rates, utility bills, and accountancy/banking costs. If your salon is only just breaking even or making a loss, you will need to increase your prices. Don’t be afraid to do this: your clients come to your salon because they value the service and quality of client experience you offer. They will understand you need to cover your costs and make a profit.

When setting your prices you will also need to consider a number of factors including your location, target market, and the range and type of services you offer. Whether you’re going for high-volume turnover or the luxury end of the market is also a key factor.

When is the best time to put prices up?

Our advice is to put your prices up at the start of the new financial year in early April. This will make sense to clients as you can explain that you need to cover increases in the National Minimum Wage as well as rent and rates rises. Your suppliers may also be putting up their prices and utility bills may increase too. Be open about your outgoings with your clients so they understand that you genuinely need to increase your prices.

Don’t put prices up without any warning. Give at least six weeks’ notice and make sure all your staff will feel confident explaining the reasons for the price increase.

Can you share three top tips to increase profits in 2020?

Firstly, take control of your cash flow – running out of cash is a major cause of business failure. Even profitable salons can fail because of poor cash flow. Find out more about cash flow:

Secondly, increase your retail sales. Encourage your staff to sell the products they love – their genuine enthusiasm will be infectious. Find out how to boost retail sales:

Finally, take steps to reduce costs: cut down your stock levels, reduce waste and negotiate better deals with your suppliers.

NHBF Members can download a free in-depth guide to business finances, prices, wages and profits:

The NHBF offers a range of business support services for hair and beauty salons, from legal, employment and financial guidance to discounted insurance and expert advice for managing people and boosting your business.