number1kitty
Well-Known Member
Protecting your business!
I have just been looking through a web based administration company and noticed several beauty salons and beauty suppliers have gone into receivership. Whilst times are going to get a little sticky I thought I would write some advice to help you falling into a trap and losing money.
What would you do if one of your suppliers goes bust?
I remember years back when this happened to me. I had invested over £10,000 in a certain skincare range and they went into liquidation. They had already showed tell tale signs such as stock shortages etc. The problem was that all my clients loved the product and that alone was one of the main areas of my income.
I panicked and spent £3000 on yet another range from a distributor. It was a rash decision and another very expensive one! Three weeks later the company I purchased the range off lost the distribution rights before myself and my staff got trained. The company that took over would not honour the training! I had £3000 worth of useless stock, on top of the £10,000 of wasted investment I already had made.
This happened in the middle of the boom, a time when salons were popping up all over the place and clients were spending like no tomorrow.
So what protection have you got against anything happening beyond your control? What would happen to your business because of it? What would happen to your product loyal clients?
Now more than ever you need to plan. Plan for the worst thing that can happen, and when it does you wont make the same mistakes I did.
Speak to your current suppliers and raise any concerns. Get your training in, get them down for promotional evenings and ask then to help you write press releases to generate new clients. Dont alienate your supplier, work with them.
Have a plan b, look at any other potential suppliers for everything from your skincare to your bed roll. What money should you put aside if you need a new skincare range? Start saving now. If things get better than you can use that money to launch a new treatment or go on holiday, but for now its your security.
Pay your suppliers by credit card where physically possible, that way if they go bust you can recall your money. On the other hand pay your invoices promptly, your suppliers will be feeling the pinch too.
Look at all other aspects of your business. We all look at saving money at home, but we can do the same at our business too. A pound saved is worth more than a pound spent, so whilst your clients spend less, you can save more.
If you pay gas and electric try and negotiate a better deal. Look at reducing your business landline and mobile phone bills. Cut costs on finding cheaper deals on wax, bedroll, and other basics by shopping around. Look at the amount of products you use, are you being over zealous? If you have staff, explain to them that being frugal means jobs for them in the long run. Change bank accounts, most do free banking for the first year and now is a good a time as any!
Now is the time to know exactly what you have coming in and going out. Work out your profit on every treatment and dont forget to take off this a proportion for rent, rates, tax and N.I etc. My accountant worked out my Gross Profit was 40% therefore every 40p in every £1 earned was mine.
You probably have backed off advertising, you and everyone else, now is the time to negotiate fantastic rates with the local papers, wait until near deadline and haggle up to 50% off the main rate. Corner the market where your competitors have now stopped spending the cash. Remember your clients life time value. One client can easily pay for your advert over the course of a year.
Do not discount! Its a sure sign of failure and doesnt instil confidence in your clients. It will also mean when things start to pick up again, clients will not see why your prices have doubled! Add value for money, include a back and shoulder massage in with every treatment to melt away your clients stress, or a free mini pedicure with a luxury manicure.
A quick and simple way to earn an extra 10% profit is to increase your profits. Your existing clients wont bat an eyelid and you can use the excuse of rising costs to get away with it. Dont be shy, you dont work for free!
Make your business a recession free zone, dont talk to clients about how difficult things are, let them let off steam should they want to, but leave your problems at home.
Look at what other business are doing to entrap customers. The supermarkets value ranges are now more popular than ever. How about incorporating your own budget line of services too? Use cheaper products so you can charge less, and if the client wants a little luxury then book them in for your regular ranges. Incorporate this right and your budget ranges should work out more profitable than your luxury ranges!
Up sell Up sell Up sell! If your struggling for new clients, the target your existing ones. If the book a manicure, up sell a mini pedicure, or if they book an eyebrow wax sell an eyelash tint etc.
Add value to your treatments, go the extra mile and make that client feel so special they never want to leave. Sounds obvious but its amazing how few salons go all out for their clients.
Market like mad, this does not need to cost a penny. Take yourself out and about when your quiet, appointment book in hand and tell everyone you see about your business!
Look at other ways to make money, your not limited to just treatments. Rent out your spare room, or salon when your not there. Train in a new area that can work alongside your business such as counselling, weight loss support, nutrition etc. Think of add ons to your business that can make extra money, look at what the clients need, what are they buying? There may be a recession but all that means is there is a shift in what people want, need and spend their money on. What you have to do is tap into it. How about arranging medium nights, clothe swap nights or charity auctions to raise awareness of your business and bring in additional income.
Plan well, budget and use your imagination to beat off the recession with a big stick! There is so much more you can do and this is just the tip of the iceberg, and hopefully the kick start you need to protect your business and its finances!
Kate xxxxx
I have just been looking through a web based administration company and noticed several beauty salons and beauty suppliers have gone into receivership. Whilst times are going to get a little sticky I thought I would write some advice to help you falling into a trap and losing money.
What would you do if one of your suppliers goes bust?
I remember years back when this happened to me. I had invested over £10,000 in a certain skincare range and they went into liquidation. They had already showed tell tale signs such as stock shortages etc. The problem was that all my clients loved the product and that alone was one of the main areas of my income.
I panicked and spent £3000 on yet another range from a distributor. It was a rash decision and another very expensive one! Three weeks later the company I purchased the range off lost the distribution rights before myself and my staff got trained. The company that took over would not honour the training! I had £3000 worth of useless stock, on top of the £10,000 of wasted investment I already had made.
This happened in the middle of the boom, a time when salons were popping up all over the place and clients were spending like no tomorrow.
So what protection have you got against anything happening beyond your control? What would happen to your business because of it? What would happen to your product loyal clients?
Now more than ever you need to plan. Plan for the worst thing that can happen, and when it does you wont make the same mistakes I did.
Speak to your current suppliers and raise any concerns. Get your training in, get them down for promotional evenings and ask then to help you write press releases to generate new clients. Dont alienate your supplier, work with them.
Have a plan b, look at any other potential suppliers for everything from your skincare to your bed roll. What money should you put aside if you need a new skincare range? Start saving now. If things get better than you can use that money to launch a new treatment or go on holiday, but for now its your security.
Pay your suppliers by credit card where physically possible, that way if they go bust you can recall your money. On the other hand pay your invoices promptly, your suppliers will be feeling the pinch too.
Look at all other aspects of your business. We all look at saving money at home, but we can do the same at our business too. A pound saved is worth more than a pound spent, so whilst your clients spend less, you can save more.
If you pay gas and electric try and negotiate a better deal. Look at reducing your business landline and mobile phone bills. Cut costs on finding cheaper deals on wax, bedroll, and other basics by shopping around. Look at the amount of products you use, are you being over zealous? If you have staff, explain to them that being frugal means jobs for them in the long run. Change bank accounts, most do free banking for the first year and now is a good a time as any!
Now is the time to know exactly what you have coming in and going out. Work out your profit on every treatment and dont forget to take off this a proportion for rent, rates, tax and N.I etc. My accountant worked out my Gross Profit was 40% therefore every 40p in every £1 earned was mine.
You probably have backed off advertising, you and everyone else, now is the time to negotiate fantastic rates with the local papers, wait until near deadline and haggle up to 50% off the main rate. Corner the market where your competitors have now stopped spending the cash. Remember your clients life time value. One client can easily pay for your advert over the course of a year.
Do not discount! Its a sure sign of failure and doesnt instil confidence in your clients. It will also mean when things start to pick up again, clients will not see why your prices have doubled! Add value for money, include a back and shoulder massage in with every treatment to melt away your clients stress, or a free mini pedicure with a luxury manicure.
A quick and simple way to earn an extra 10% profit is to increase your profits. Your existing clients wont bat an eyelid and you can use the excuse of rising costs to get away with it. Dont be shy, you dont work for free!
Make your business a recession free zone, dont talk to clients about how difficult things are, let them let off steam should they want to, but leave your problems at home.
Look at what other business are doing to entrap customers. The supermarkets value ranges are now more popular than ever. How about incorporating your own budget line of services too? Use cheaper products so you can charge less, and if the client wants a little luxury then book them in for your regular ranges. Incorporate this right and your budget ranges should work out more profitable than your luxury ranges!
Up sell Up sell Up sell! If your struggling for new clients, the target your existing ones. If the book a manicure, up sell a mini pedicure, or if they book an eyebrow wax sell an eyelash tint etc.
Add value to your treatments, go the extra mile and make that client feel so special they never want to leave. Sounds obvious but its amazing how few salons go all out for their clients.
Market like mad, this does not need to cost a penny. Take yourself out and about when your quiet, appointment book in hand and tell everyone you see about your business!
Look at other ways to make money, your not limited to just treatments. Rent out your spare room, or salon when your not there. Train in a new area that can work alongside your business such as counselling, weight loss support, nutrition etc. Think of add ons to your business that can make extra money, look at what the clients need, what are they buying? There may be a recession but all that means is there is a shift in what people want, need and spend their money on. What you have to do is tap into it. How about arranging medium nights, clothe swap nights or charity auctions to raise awareness of your business and bring in additional income.
Plan well, budget and use your imagination to beat off the recession with a big stick! There is so much more you can do and this is just the tip of the iceberg, and hopefully the kick start you need to protect your business and its finances!
Kate xxxxx
