Can Your Salon or Spa Survive an Economic Downturn?
How to Tell if Your Salon is Set to Stay Hot—Even When the Economy Isn’t
There are a lot of opinions floating around out there in the beauty biz realm that align with the idea that what we do is essentially recession-proof.
Analysts point to facts about what we do as well as historical patterns—we can’t be automated or outsourced, high unemployment rates benefit the beauty industry, few customers would stop visiting salons no altogether, etc.—to throw together the assumption that those in the beauty biz are 100 percent fine during economic downturn.
Here’s the thing, though, that sort of stuff—an economic downturn, a recession, a pop in the economic bubble—affects everyone, whether it’s believed your immune or not.
We’re not saying this stuff to scare you, just to prepare you and to be upfront. The economy is the furthest thing from a sure path set straight for success—it winds, it turns, it rises, and of course, it drops (sometimes steeply). And the best part? We can’t always know when it’s going to happen,
That leads us to the most important question we could probably ever ask you: can your salon, spa, or studio weather the storm of a bumpy economy?
Think about your salon. When times get tough and the economy’s rough, are you still in a position to set yourself up for success? Will you be able to cover costs, drum up clients, retain your current regulars, an thrive even when dealing with an economic downturn?
You might not be able to answer that question right off the bat—but we’re here to tell you that it’s important you learn how. If you’re struggling to gauge your level of preparedness, you’ve come to the right article.
Check out a few of the vital signs of economic preparedness below—if you find that you’re overwhelmingly unprepared for an economic rollercoaster ride, then we suggest you get to work on righting your ship ASAP (you can thank us later).
Have You Been Saving?
Yeah, yeah—you’re probably rolling your eyes thinking, “of course I’ve been saving money, why wouldn’t I?” But we’re not just talking about scraping a few thousand dollars into your business’ account every few months so you can make your salon dreams come true. We’re talkin’ about an emergency fund that’s designated specifically for troublesome times.
It’s one thing to have a savings account specifically for your future plans, your goals, and your dreams (seriously, that’s hugely important, so make sure you’re doing this, too), and it's another thing to have an account set aside that’s specifically for emergencies.
That way, when the going gets rough, you don’t have to siphon from your goals-and-dreams savings fund and make that an even farther-off reality. Each week, month, year (however you want to do it), set aside a solid amount of emergency cash into your savings so that if you do ever end up dealing with a rough economy, your stress levels (and your business) will be safe.
How’s Your Credit Lookin’?
Don’t wait until the economy’s turning to invest in your business’ credit. Do regular checks and make consistent efforts always to keep your credit up. The more you improve and the higher your score, the better off you’ll be regardless of the economy. Why? Because recession isn’t just affecting you—it’s affecting banks, too. Acquiring a business line of credit when times aren’t so lean and stressful will be hugely beneficial if a hectic, chaotic economy does occur.
Do You Have Creative Back-Up Plans JIC?
If you’ve never run a business during a recession or economic dry spell, then you might not know this (and that’s okay)—the way you do business when times are good and the way you do business when times are bad are not necessarily the exact same. We’re not saying that the second an economic downturn hits you should fundamentally change everything about your business, but we do think having creative back-up plans at your fingertips (ahead of time) can be a real lifesaver when business does take a slight turn.
Consider how you service your current client base, what might change in an economic downturn, and come up with creative solutions to serve your clients better in a rougher economy. It’s also vital to think about your customer base—is it diverse enough? If you’re a business who depends on just a few large, regular customers, it’s likely that a recession or economic downturn would hit you harder than a salon who has a much larger, diverse crowd. Because everyone is affected differently by economic downturn, the more diversified your client base, the better. That means employing creative plans to attract new clients (before and during economic downturn), redefining who your target audience is, and creating partnerships that make sense for your brand.
What’s Your Inventory Plan?
Keeping your inventory lean and efficient is a fantastic business plan in general—you don’t need to keep things on your shelf that you don’t sell even when times are good, so it should only make sense that this line of thinking resonates when times are bad, too.
Even though the primary focus of your business isn’t likely carrying products, this advice can still benefit you. If you’re implementing operational processes that diminish your holding costs for inventory, you’re likely going to appreciate those efforts if and when a recession hits. In other words, if you have a plan in place to cut costs when it comes down to acquiring, tracking, maintaining, and selling your inventory, then you’ll be in a much better financial position when economic downturn does hit.
The good thing about economic downturns, recessions, and dry spells? They don’t last forever. But even so, it’s impossible to ride out the storm of a recession without proper planning, strategy, and the right type of mindset—and trying to orchestrate all of that while the stress of an economic downturn hits is, well, hellish, guys. That’s why making sure you’re prepared ahead of time is wildly important. Having a plan in place is vital for the success, health, and well-being of your business.
Was our economic advice helpful? We hope so.
At Elite Beauty Society, we’re all about keeping you in-the-know—and not just when it comes to trends, styles, and hot looks. We focus our energy on people like you—savvy business owners, managers, and stylists—who are consistently seeking advice, insight, and know-how.
Looking for more tips and tricks within our beauty biz realm? Keep up with our regularly updated blog here!
