How Beauty Businesses Can Best Manage Their Finances During COVID-19
Do you own a nail salon or any type of beauty salon and you are finding it a bit difficult to stay afloat?
Covid-19 has brought a lot of unforeseen changes in the way businesses and finances are managed this year. So how does this affect you as a small business owner and how can you come out of it stronger?
In 2019 alone, beauty businesses amassed a total of 49.5 billion dollars in revenue. Unfortunately, about 60% of small businesses that closed as a result of the pandemic early this year won't be reopening. As a nail technician, you do not have to be part of this statistic.
Don't let yourself believe that what you are doing doesn't matter, because it does!
This topic is a bit personal for me because I have a friend who runs a nail salon. She started in 2019 so this year's backset back has been a whole lot to handle. Nevertheless, with the reopening of personal care centers, including nail salons in most states, she has begun to look on the brighter side of things.
It will take a lot of planning, forecasting, maybe even financial help from friends and the government but when properly managed, your beauty business can come out of this economic downfall stronger.
How can you manage your finances during the covid-19 Pandemic?
If you are still reading this, then you are in for the long haul. You might want to grab a pen and paper because I am going to be outlining practical steps you can take to better manage your finance.
· Spring Cleaning
Many owners of small businesses usually wait till the dying minute to do their books. At most, you might just have a superficial recording of income and expenditure while ignoring or delaying proper documentation of assets, credits, debts, and liabilities. Well, there's no better time to start than today.
You should take out one morning to properly document your transactions. Luckily, there are several free bookkeeping software, like Wave, Zipbooks, etc that small businesses can use and save cost on hiring a bookkeeper.
Deep spring cleaning of all your financial records will let you know exactly what you have to run your business and prepare you for the next logical step.
· Research your options
Since the beginning of the covid 19 pandemic, there have been several coronavirus relief options, grants, zero-interest loans, etc that small businesses can apply for.
Some of these grants are set up by the federal government while others by the state government, NGO's and business corporations trying to give back to the community by supporting other businesses.
You must be proactive rather than reactive in this regard. You have to go on the net and search for these grants starting from your district to see if your business meets the criteria for any of these relief options. You can start by searching here.
· Cutting back on expenses
Another practical step you can take is cutting down on avoidable expenses. These luxuries or utilities are important but can be done without. An extra $40 here and $50 there can go a long way in settling some other pressing needs.
For example, you can stop home delivery of some products you order if they come with extra charges and pick them up yourself if the distance is reasonable. You can also cancel subscriptions that you don't always use such as gyms, data plans for your employees, etc.
You can also downgrade some paid software to the free versions to save some cash. You can regulate the use of electricity to lessen your bills, cut down on employees’ snacks, etc. It is important to discuss these measures with your employees.
Although, they will likely be understanding and make more suggestions to save money.
· Learn online marketing
One thing several businesses did during the lockdown is taking this business online.
For example, if you are a nail salon owner, you can open an online store and sell personal nail care kits, nail polish, etc. Better still, optimize your business website to generate traffic by writing blogs, making it more user friendly, etc.
Rather than hiring an expert to do your online marketing, you can take courses or watch explanatory videos on youtube that'll teach you all you need to know about marketing your services/product online.
This way, you can attract more customers to your salon, earn money through blogging and also, selling your products online.
· Renegotiate as much as you can
Virtually everyone has been affected in one way or the other by the pandemic. Because of this, your lenders, landlords, and vendors may be more lenient with your terms of payment. Determine whether you will have an issue with the late payment of rent or products and call your landlord/vendor to see if you both can work out an agreement.
This is why as a business owner, you should be creditworthy for this to work out well. Also, some states have issued landlords not to force tenants who can't pay rent for at least a period. Check the websites of your service providers such as saas, etc to find available relief options that you can benefit from.
You can also try to get your customers to pay faster if you are in dire need of cash by offering little discounts for payments within specific time frames. This must be done with care so as not to lose your customers.
Just as you are struggling with finances, some of your clients are too. So you must be considerate and find a middle ground that's beneficial to all.
· Contact your bank and insurance company
You can also be in touch with your bank and/or insurance company to see if you can defer payments, mortgage, etc.
Beyond these, there are several other action plans you can implement to increase your revenue and keep your beauty business running despite the pandemic.
Things you can do to boost your revenue and keep your small business running
- Offer home services
One way you can increase your revenue is by adding home service to your list of services. By sparing your clients the stress of leaving their houses, you can charge higher to do their beauty treatment for them right at home.
This will also help with some of your customers that are afraid of contacting coronavirus from others that come into the salon.
- Reassure your clients of your adherence to avoid 19 safety protocols
One of the reasons why your clients may not want to come in for their usual treatments is probably because they are not sure whether it is safe for them health-wise.
Make use of the internet; upload videos of you and your staff if any, in your PPE cleaning and sanitizing the salon; explain your covid 19 polices and how you are implementing them, etc.
All these will bolster confidence in your customers, making them feel safe to come to the saloon. Here's an example of a nail salon showing their adherence to covid-19 policies.
- Introduce referral bonuses
This technique is probably as old as man itself but it is still as effective. Do you want an increase in clients /customer base?
Announce a percentage cut in prices of your services for your regular clients when they bring in new customers. Soon, you will see them coming in with their friends and family members.
- Employee pay cut rather than termination
The scary truth is that some small businesses may not be able to afford to keep their employees on the payroll. If this describes you, there might be another option. You can speak to your employees as a group, give them the offer to accept a temporary pay cut rather than being out of work. This should be reversed as soon as business picks up and things normalize.
Phew, that's a lot of things to do up there but don't get discouraged so soon. Just start with the first and gradually work your way down.
There are many other ways you can manage your finances. As you implement these, you have to keep your eyes open for any other opportunity to save money or scale your income while reducing costs.
Remember to find out your state’s guidelines for the reopening of personal care centers and completely abide by them.
Just as a reminder, you should:
- Set your financial records in order
- Research your options, get to know of any grant or aid that can help support your business or pay your employees.
- Cut back on expenses
- Learn online marketing
- Renegotiate payment plans where possible. Speeding up incoming payments and delaying outgoing payments.
- Offer home services
- Contact your bank and insurance companies
- Adhere to Covid-19 regulations, etc.
Did this article help you in any way? Please leave a comment in the section below.
You can also share your experience as a small beauty business owner and how Covid -19 has affected you.