Stay in Control of Your Finances

Business consultant Phil Jackson from Build Your Salon, offers these tips to help stay in control of your finances by more easily managing your money within the salon.

“We are living in turbulent times. Even world events occurring far from home are having an impact on your business,” says Phil Jackson from buildyoursalon.com “Energy prices are on the rise; it won’t be long before our manufacturers have to pass increased costs along to our salons. The keyphrase is to Stay in Control.”

Stay in Control

Simple yet effective steps

“It’s easy to feel overwhelmed,” continues Phil. “So much seems outside of your control. There are, however, a few simple moves you could be making to protect your business and ensure you remain profitable.

“Firstly, review your prices. I’m hoping you do this regularly anyway. However, I’ve heard of a few salons that are delaying their pricing review ‘until things settle down’. To be blunt, things won’t settle down any time soon. You therefore run the risk of running on reduced profit in the meantime. Holding out to see what your suppliers are doing could mean delays of weeks or even months. Far better to decide your prices on the information you have now and make an educated guess on what might happen in the next couple of months. Then implement any changes sooner rather than later.

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“Price reviews can cause a little upset with your customers (though few will expect your prices to remain the same, particularly in the current climate). You can take some of the sting out of the increases and ensure your prices are set where they should be by reviewing prices more frequently. Six-monthly price reviews tend to mean smaller increases and some services may not need reviewing at all. In times of drastic change don’t be afraid to increase sooner than that. I am certain your customers would rather that than see you operate at a loss or even have to close your doors for good.

“Changing prices is far easier if you have made the decision to finally ditch physical price cards. Make your pricing available online or alternatively, if you have something you want to physically give your customers, exclude the prices and instead provide them with a link or QR code where the latest prices can be accessed. That means that changing your prices is a simple two-minute job rather than paying hundreds of pounds for a print run of price cards. It’s also friendlier to the environment than binning a box of unused cards.

Get up-to-date online

“Encourage online bookings. Not only does it mean you can take bookings 24/7, it means your customers are shown the latest, up-to-date prices at the point of booking too. It will never suit everyone but it can make a huge difference to your business, particularly if you implement a booking fee to reduce no-shows.

“Finally, take the opportunity to review your costs. Some increases are unavoidable but shop around as much as you can for utilities and other supplies. Even 1% of costs saved can make a massive difference to your profits over a year. Sadly, we can’t exclude wages from this review. If you set your commission to an affordable level a few years ago but your fixed costs have increased, either your variable costs (including commission) will need to reduce or you are going to have to reduce your profit margin. Remember to take legal advice before making changes to contracts or pay.

“There is currently an affection for small businesses and salons that means your customers are less price sensitive. The best way to weather a financial storm is to remain nimble, adapt quickly and keep a firm grip on those things you can control.”

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