Protect Your Salon's Finances in the Face of a Recession
It’s normal to feel nervous about a recession. But with the right tools, you can keep your fiscal foundation strong, even in the face of financial crisis.
We know it’s been a rough couple of years, but you’re still here, boss! Even if you’re reeling from the effects of the pandemic or feeling some early aughts PTSD with the word “recession” being thrown around lately, it’s totally normal to feel nervous about economic strain as a business owner. But if you’re here reading this, it’s obvious that you’re a salon pro with a strategic mind, so here’s the plan. We’re taking “recession” out of our vocabulary and replacing it with another “R” word that suits your business better – resilience. We can’t promise that everything in this economic climate will work out in your favor all the time, but you don’t need a promise when you have a plan. Ahead, we’re sharing some of the tools to keep your fiscal foundation strong, even in the face of a financial crisis. And, when and if we’re not in the middle of a Great Recession Remix, these ideas will be good practice for any economic climate you’re weathering.
Try GlossGenius free for 14 days!
Be Proactive With Your Plan
No one wants to be the wet blanket who plans for a market crash, but having a strategy in place for slow periods isn’t a negative trait – it’s a wise idea, whether or not an impending recession is in play. Even that lull after the holidays year after year can take a toll on your salon business if you don't plan ahead for it. The best thing you can do is to be proactive before you start feeling the strain.
Run your reports: You should be looking at these numbers regularly, but when it comes to planning ahead you’ll want to do a deep dive. When you know your numbers inside and out, you have the power to determine when you need to pivot with just a glance at your phone.
Fund for the future: Just as you would have an emergency fund for your personal life, your business needs a little cushion, too. Make it a regular practice to stash away some savings from every month’s earnings that goes right into an account you’ll never touch unless absolutely necessary.
Have clients on deck: Don’t wait until your calendar is empty to start scrambling. Encourage every client to start pre-booking (even better if they lock in a standing appointment), and while business is still buzzing, use waitlists to fill gaps that might start popping up more frequently. With GlossGenius’s Waitlist feature you can easily and automatically get the clients who are in limbo on the books as soon as you have an opening. They can even add themselves to any service list for up to 90 days with notes on their availability so you know who exactly can fit in where and when.
Keep the team informed: Be open and transparent with your team so they know you have their back no matter what’s going on in the industry. Keep everyone on the same page with our Teams feature so you can quickly access who’s on the schedule, who’s bringing in the most clients, and who might need a little extra support in the booking department.
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Cut Back Where You Can
When things start to tighten up, it’s time to take a look at your expenses and see what can be pared back. Again, knowing your numbers is key, but there might be some other areas you’re not accounting for. Are there little luxuries you can do without for a limited time? Trust us, your team will understand if you stop bringing in breakfast every morning for the sake of keeping the salon lights on.
As you’re analyzing your reports, you may notice that unused inventory can quickly start to siphon off your sales if not managed properly. Take a close look at your retail transactions and find out if and where you’re losing money on products.
Minimize your inventory: If you have certain vendors or products on auto-order, now’s the time to jump in and make adjustments. Better yet, if business is slow, it may be best to order only what you need when you need it, rather than ordering in bulk. You can quickly track what’s in stock and what’s actually getting sold with GlossGenius’ easy salon inventory management.
Maximize your time: Once you’ve stripped back your extra expenses, you can look for ways to make the absolute most out of your time in order to maximize your earnings per hour. If you’re not already using online booking and automatic notifications to manage client appointments and reminders, you could end up spending precious hours in the role of receptionist rather than service provider.
Protect Your Income
Taking deposits can save you from the pain of a last-minute cancellation that was part of the paycheck you were counting on, or even worse if you had to order special products in preparation for a client who’s gone MIA.
Deposits are charged at the time of booking and are non-refundable, which means when you find yourself stuck with a last-minute opening you can’t fill, you can still earn money for that time slot. GlossGenius' new Deposits feature almost works like insurance to reduce the financial impact of a no-show or cancellation.
Don’t Depend on Discounts
Resist the temptation to drop your prices in a panic to keep customers coming in the door. Deeply discounting your services for the sake of staying afloat can oftentimes do more harm than good – it’s much harder to “raise” your prices back to normal once things have leveled out if clients have gotten used to the same service for less. Instead, focus on keeping your business attractive to the customers who value your work and do everything you can to maintain the five-star service they come to you for.
Embrace The Lipstick Effect: If you’ve never heard of this phenomenon, it's not about how fabulous your clients feel when they leave the salon – even though we know they do! The lipstick effect is a theory that, even in an economic crisis, consumers might be more willing to buy less costly luxury goods. Instead of buying expensive fur coats, for example, people will buy expensive lipstick… or a blowout, facial, or pedicure. When this happens, that’s your cue to sharpen your marketing tactics and position your services as the little indulgence the world needs.
Ramp up your marketing: All you need for a successful campaign these days is a cell phone. With GlossGenius’ turnkey templates for social, email, and text message marketing, you can reach your entire roster in seconds to share a flash sale, a last-minute opening, and more.
Try GlossGenius free for 14 days!
Increase your average ticket: Rather than rely on discounts, come up with smart promotions that add value to your client experience without stripping away your profit margin. Try upselling a premium product, adding a hand or foot massage to the experience, or creating a custom service bundle to give your clients the best bang for their buck.
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We know it’s been a rough couple of years, but you’re still here, boss! Even if you’re reeling from the effects of the pandemic or feeling some early aughts PTSD with the word “recession” being thrown around lately, it’s totally normal to feel nervous about economic strain as a business owner. But if you’re here reading this, it’s obvious that you’re a salon pro with a strategic mind, so here’s the plan. We’re taking “recession” out of our vocabulary and replacing it with another “R” word that suits your business better – resilience. We can’t promise that everything in this economic climate will work out in your favor all the time, but you don’t need a promise when you have a plan. Ahead, we’re sharing some of the tools to keep your fiscal foundation strong, even in the face of a financial crisis. And, when and if we’re not in the middle of a Great Recession Remix, these ideas will be good practice for any economic climate you’re weathering.
Try GlossGenius free for 14 days!
Be Proactive With Your Plan
No one wants to be the wet blanket who plans for a market crash, but having a strategy in place for slow periods isn’t a negative trait – it’s a wise idea, whether or not an impending recession is in play. Even that lull after the holidays year after year can take a toll on your salon business if you don't plan ahead for it. The best thing you can do is to be proactive before you start feeling the strain.
Run your reports: You should be looking at these numbers regularly, but when it comes to planning ahead you’ll want to do a deep dive. When you know your numbers inside and out, you have the power to determine when you need to pivot with just a glance at your phone.
Fund for the future: Just as you would have an emergency fund for your personal life, your business needs a little cushion, too. Make it a regular practice to stash away some savings from every month’s earnings that goes right into an account you’ll never touch unless absolutely necessary.
Have clients on deck: Don’t wait until your calendar is empty to start scrambling. Encourage every client to start pre-booking (even better if they lock in a standing appointment), and while business is still buzzing, use waitlists to fill gaps that might start popping up more frequently. With GlossGenius’s Waitlist feature you can easily and automatically get the clients who are in limbo on the books as soon as you have an opening. They can even add themselves to any service list for up to 90 days with notes on their availability so you know who exactly can fit in where and when.
Keep the team informed: Be open and transparent with your team so they know you have their back no matter what’s going on in the industry. Keep everyone on the same page with our Teams feature so you can quickly access who’s on the schedule, who’s bringing in the most clients, and who might need a little extra support in the booking department.
[CTA_MODULE]
Cut Back Where You Can
When things start to tighten up, it’s time to take a look at your expenses and see what can be pared back. Again, knowing your numbers is key, but there might be some other areas you’re not accounting for. Are there little luxuries you can do without for a limited time? Trust us, your team will understand if you stop bringing in breakfast every morning for the sake of keeping the salon lights on.
As you’re analyzing your reports, you may notice that unused inventory can quickly start to siphon off your sales if not managed properly. Take a close look at your retail transactions and find out if and where you’re losing money on products.
Minimize your inventory: If you have certain vendors or products on auto-order, now’s the time to jump in and make adjustments. Better yet, if business is slow, it may be best to order only what you need when you need it, rather than ordering in bulk. You can quickly track what’s in stock and what’s actually getting sold with GlossGenius’ easy salon inventory management.
Maximize your time: Once you’ve stripped back your extra expenses, you can look for ways to make the absolute most out of your time in order to maximize your earnings per hour. If you’re not already using online booking and automatic notifications to manage client appointments and reminders, you could end up spending precious hours in the role of receptionist rather than service provider.
Protect Your Income
Taking deposits can save you from the pain of a last-minute cancellation that was part of the paycheck you were counting on, or even worse if you had to order special products in preparation for a client who’s gone MIA.
Deposits are charged at the time of booking and are non-refundable, which means when you find yourself stuck with a last-minute opening you can’t fill, you can still earn money for that time slot. GlossGenius' new Deposits feature almost works like insurance to reduce the financial impact of a no-show or cancellation.
Don’t Depend on Discounts
Resist the temptation to drop your prices in a panic to keep customers coming in the door. Deeply discounting your services for the sake of staying afloat can oftentimes do more harm than good – it’s much harder to “raise” your prices back to normal once things have leveled out if clients have gotten used to the same service for less. Instead, focus on keeping your business attractive to the customers who value your work and do everything you can to maintain the five-star service they come to you for.
Embrace The Lipstick Effect: If you’ve never heard of this phenomenon, it's not about how fabulous your clients feel when they leave the salon – even though we know they do! The lipstick effect is a theory that, even in an economic crisis, consumers might be more willing to buy less costly luxury goods. Instead of buying expensive fur coats, for example, people will buy expensive lipstick… or a blowout, facial, or pedicure. When this happens, that’s your cue to sharpen your marketing tactics and position your services as the little indulgence the world needs.
Ramp up your marketing: All you need for a successful campaign these days is a cell phone. With GlossGenius’ turnkey templates for social, email, and text message marketing, you can reach your entire roster in seconds to share a flash sale, a last-minute opening, and more.
Try GlossGenius free for 14 days!
Increase your average ticket: Rather than rely on discounts, come up with smart promotions that add value to your client experience without stripping away your profit margin. Try upselling a premium product, adding a hand or foot massage to the experience, or creating a custom service bundle to give your clients the best bang for their buck.
[CTA_MODULE]
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