Is the Economy Killing Your Beauty Business?
Let’s discuss the elephant in the salon shall we?
It’s time to address the current state of the economy and how it is affecting the beauty industry.
I’ll be honest with you, I like to believe that nothing can affect my business and that regardless of the state of the world at large I won’t be impacted. I even have proof to back this up:
-I opened my business during the 2008 housing crisis and thrived.
-I weathered COVID and came back stronger than before.
-I lost most of my staff over the course of a year to suites only to end up hiring the best commissioned staff I have had to date.
Although you can ABSOLUTELY grow and find success during these scary economic downturns it doesn’t necessarily mean we won’t be affected. It doesn’t mean that carrying on with business as normal is the best strategy. So let’s stop pretending it is. When we just put our heads down and wait for the dust to settle we often become suffocated by the fumes and are taken out of the long game. This is not business as normal- this is a different situation and requires different actions.
One of my favorite authors, Ben Horowitz, refers to the concept of wartime leadership vs. peacetime leadership and how, as leaders, we have to change our approach and style of doing business based on the times we are in and the challenges we are facing. And before you stop me and tell me that you are not a leader, I want to remind you that you have a circle of influence in which you very much are a leader. This concept applies to you if you own and run a salon and manage a group of employees or if you work for someone else taking clients behind the chair. You are a leader and must approach your business as such. Either position requires us to develop a CEO mindset, to make empowered decisions and to put ourselves in uncomfortable situations to grow. And each position requires us to pivot when necessary so that we can rise above our situation and continue to thrive during hard times.
I believe that for many of us our businesses are in wartime. We are facing a survival situation that is requiring us to change the way we show up in our businesses and in our actions as leaders. What seemed to work before is no longer having an impact. The demands of our clients, employees, bosses and managers have changed. Expectations have increased while compensation has decreased. Everyone is expecting more for less. This is war and only the strong will survive.
Maybe you are thinking this is too much, this is more than I am willing to do. That is ok, you can always stop playing the game. Because that’s really what this whole thing is….. A big game, and it’s your choice to stay in it. And for those of you that are up for the challenge, that are willing to ride this exhilarating wave of entrepreneurship, success is inevitable.
War time purges out the weak. So when the dust settles and peacetime is once again upon us there are much fewer left in the game and the odds of success increase! This is the reward that is promised to those that stay in the game, that pivot with the changing current, that lead with bravery and morality during uncertain times.
If you are one of the brave ones here for the long run, roll up your sleeves and let’s get to work because we have a business to save, a community to influence and an industry that is watching and responding to our actions.
So where do we train our focus during times of survival to make sure we are here to reap the rewards when times change?
Here are three places to start:
The one thing we see when the economy takes a hit is that the middle falls out, meaning that the middle class gets hit the hardest. It’s the same way in our marketplace. This is the first place that we must pivot. What we will see thrive are luxury services and bargains while the middle maintenance services will slow down. We see clients stretching out their time in between appointments and coming less often. We see others saving for big ticket appointments while still others will only show up when there is a sale or discount. And while these buying behaviors might seem frustrating they are very normal for the state of the economy and the question is: how do we make changes to adapt? I know that everything in us wants to rebel against this but remember, this is wartime, this is survival.
The second awareness that is crucial during wartime is that of perceived value. When money is scarce everyone becomes a lot more discerning about what they are spending it on. So what is it that we are giving to our clients that no one else is? How do we make our services more valuable to our customers? A lot of this boils down to skills. If we are choosing to stay in this game. If we are choosing to play full out, mediocre just won’t cut it. More than ever right now is the time to improve our skills and seek out advanced education that will set us apart from the rest. As counterintuitive as it sounds this is exactly the time to invest in ourselves. When money is tight our first reaction is to hoard it and stop all spending but now, more than ever our investment in our business, skills and education is not just a luxury but a necessity.
The third focus is marketing and communication. How we connect to our customers during this time is essential to continue thriving during wartime. People spend money for all different reasons but those reasons do change when the economy shifts. Clients may spend money on maintenance during a robust economy because it’s a sign of status and responsibility while spending money during a downturn might speak to a need to feel better about oneself and one’s current situation. This is demonstrated in a buying behavior coined “the lipstick effect”. This is a concept that when communicated and marketed correctly, can solve a problem and keep the cashflow level in our business. If what our customers need is to have a boost in morale and confidence all while not breaking the bank then we must ask this question: what are the services we can offer that make maximum impact without costing time, money or tremendous effort on our part? And how do I communicate that to my customer base? Staying relevant and forward facing ensures that we are on our customers’ minds while appealing to their need to feel good. And being able to fill that need makes us the number one choice when they decide to part with their hard earned cash.
So yes, the economy is rough right now and we are all seeing the effects of it. But for those that dig in their heals there is another side to this. There is peacetime to look forward to. There is wealth and much success in store for us.
So what do you say? Are you brave enough to weather the storm? If you are, then you are in good company. We belong to an amazing industry where the majority are supportive and want to see mutual wins. Here at Elite Salon Leadership that is definitely the case. If you are in need of support and guidance while you do the hard stuff of growing your beauty business we are always here to lend a hand. Never hesitate to reach out.
Francine Kolbinski – Founder of Elite Salon Leadership
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