Are Salons Recession Proof? How to Make Your Salon Immune -2023
After the pandemic in 2020 we all wondered when the recession was coming. Years later we’re wondering, is this it? Are salons recession proof? How is the hair industry affected?
What is a Recession?
Recession is a significant decrease in economic activity across a country, city, or state or even across the world.
Why are some salons recession proof and others not?
There are years of feasting and then there are years of famine.
Economic recession is a time of famine. Were the years of feast enough to prepare for the famine?
Why salons are recession proof-
Hair salons have been around for eons, not just known for making people look beautiful and feel good about themselves. Keeping business men and women looking professional.
The hair salon is somewhere that many people will go before the school year, before a wedding, when they want to boost their confidence. And the relationships built along the way are irreplaceable.
1) Hair keeps growing. There will always be a need!
A big reason salons are recession proof is because hair keeps growing, we cannot stop it. And people still need to work and look professional so they keep getting haircuts.
2) It’s an industry where we build relationships that can’t be replaced
All hairstylists, cosmetologists, barbers, and estheticians alike have clients that have become more than clients, friends, or even have become family.
We are trusted. Our clients want to support us, they take care of us and we take care of them.
Though we shouldn’t alter our prices for our friends, family, or clients, we can modify to suite their budget and remain affordable.
Fortunately we have the flexibility to be able to do that as business owners and self employed individuals.
Even if you work for a salon that is incorporated, ask your manager if you can run a promotion to increase your walk-in traffic, or increase your dollar per hour amount in the salon.
3) Haircuts and colors are personalized, they can’t be automated
Set the relationship aside, haircuts and services cannot be replaced by robots.
They can’t be automated and change with the individual’s hair pattern changes and preferences.
It’s either get a haircut or go without.
Get your roots done or have the stripe. But then you watch yourself go silver. Or your growth pattern will change.
Hair changes are normal and expected but different from person to person. A stylist that you trust, that knows your personality and preferences can work with you to help you adjust to these changes and get exactly the results that you need when those changes occur.
4) Prices can be changed to accommodate client’s budgets
Though not ideal to have to decrease service prices, it’s still better than not having the business at all.
We take care of those who take care of us.
In my salon, I have several clients that have come to me and said that they regret not being able to book certain services because they cannot afford them at this time or that. And that they can’t imagine paying me less than my service is worth. I have been able to work out agreements with them to trade instead. Whatever they can afford to pay me, and then whatever they cannot we trade for cookies, meals, massages, or even car repairs.
It is important to me to be able to accommodate my clients and appreciate that they told me that they still want me to do their services and respect my prices.
Why maybe some salons are not recession proof?
- Emergency funds should be set aside, like an insurance, to be able to pay rent on the facility, continue to stock inventory and necessary products to continue chemical and styling services. Some salons don’t have that, and don’t make it.
- If a salon cannot afford to keep on their staff and has to let them go, but all of those stylists clients follow them, and that is money out the door.
- During a recession usually the cost of living and expenses goes up, but salons that are not recession proof cannot raise their prices, or didn’t increased their prices during the good years to prepare for a future recession.
How to make your salon recession proof
👉 Watch where the money is going
Prioritize what is the most important to keep your ship sailing during a recession.
You can do this by calculating how much money you need per month. Then calculate how many services you do per week. Is that enough?
What expenses do you have that might not be necessary? Is there any unnecessary overhead? For example- Maybe you have a cleaning service come to the salon when you and your employees could eliminate that expense and delegate cleaning the salon yourselves.
Is your salon recession proof?
If not, increase your prices -though not drastically- during good years, seasons of feast before famine, before the recession comes.
For more tips on how to calculate this please read
Booth Rent vs Commission Salon- Which makes more money?
👉 Communicate with your employees
Tell your stylists your concerns, and your plan of action. They may even have some great ideas to help prepare for a recession or even to help you stay afloat when the time comes.
Like mentioned above, if you are an employee that is concerned about an economic recession, talk with your employer or manager about your concerns and ideas to improve the salon before a recession.
👉 How is the customer service in your salon?
What keeps customers coming in the door? Is it the services or the people?
What can you do to improve your customer service?
If you don’t know exactly how the customer service is, and you’re not sure what the clients think, ask them to leave a review and that you are looking for honest feedback.
Or conduct a survey. Clients can then anonymously offer feedback on how your salon’s customer service is and what they think would improve it.
👉 What services make you stand out? How are you marketing your salon?
What keeps the clients walking in the door? And what can you do differently to keep the clients you have, making it irresistible -but still affordable- to keep coming to your salon even during a recession.
Bundle services. Have regular discounts, stamp cards, referral discounts and other rewards for your clients.
Really think about what you can add to each service to make it better?
Consider adding a complimentary service, or something that feels like luxury but doesn’t cost you anything. Perhaps a neck shave? Or a hot towel massage?
Offer monthly promotions. Market your salon.
Utilize word-of-mouth and reward your clients that bring you more business.
Ask your staff what they think and if they have any ideas to help modify your services and improve your customer experience and even how to level-up your marketing game in the lean years as well as the years of plenty.
How to Make a Great Salon Experience Better
👉 Re-evaluate your inventory
Do you absolutely need everything you have in inventory?
What about your backbar? Is there excess? Maybe products that you don’t sell but keep ordering anyway? That would be an unnecessary expense that will prevent your salon from being recession proof.
How about your color supply? Do you regularly order only what you need and use or extra that ends up just sitting, not making your salon money?
By downsizing inventory you downsize your order payments. This increases your chances of staying afloat during an economic recession.
👉 Think ahead
What can you do to prepare your salon, your business, for a recession? Salons are not immune.
Salons may seem recession proof but they are not immune, it takes planning ahead and good preparation.
Any business owner can tell you that they have dreams of being the best business in town, but then reality hits and they have struggles that they didn’t anticipate. Even if you’re self-employed and it’s just you, you have to think ahead.
Prepare for the worst before the worst gets here- think about what to do if you lose customers. An emergency plan of action.
Nobody has ever regret planning ahead, or even planned for the worst and wished they hadn’t when the moment of truth arrives.
Conclusion- Are Salons Recession Proof?
None of this is meant to scare salon owners, entrepreneurs, self-employed stylists, or students.
A recession is something that happens in every economy, it has it’s waves and we just have to ride them out. Plan ahead, prepare in the years of feasting for the years of famine.
And bottom line- it’s going to be okay. You now know what steps to take to make your business and salon recession proof with this list.
- Watch where the money is going, decrease expenses
- Communicate with your employees
- How is the customer service in your salon?
- What makes your salon stand out? How are you marketing your salon?
- Re-evaluate inventory
- Think ahead