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How to thrive with your business in 2021

With 2021 on the horizon, thoughts turn to what the new year will bring. Here are some steps you can take towards protecting your business and thriving! Hair journalist Charisse Kenion spoke to some of the best in the business to find out how you can stay ahead.

Cash Flow
Now is a good time to sit down and look at your prices. Consider your target market and what you’re aiming to give them – is it quick fixes or luxury treatments? Think about your location and the range of services you offer. It might sound obvious, but running out of money is the main cause of a business failing.

Gavin Mills, owner of Bad Apple Salons, says it’s imperative that you understand your cash flow:
“Your outgoings will most likely have increased due to PPE so increase your prices, even if it’s £3 more per cut. Having a clear P&L (Profit and Loss) report can save your business and give you a clear understanding of what you need to turnover or make profit.”

Knowing what’s going out means you can fully utilise what’s coming in, and ensure that you have enough cash to cover at least three months of costings, from staff to software.

Reduce No-Shows and Cancellations
If you’ve kept an eye on your books, you’ll likely already know the losses associated with cancellations and no-shows. Make this a thing of the past once you’re open again, by ensuring you maintain healthy relationships with your clients. Stay in touch with your clients during lockdown, via social media for instance, to ensure they’re aware of how important they are to your business. Once you’re up and running again, send them text reminders a few days ahead of their appointment. This also acts as a prompt for them to let you know if they need to cancel or postpone for any reason.

Award-winning salon owner Anne Veck says:

“We are fortunate in hairdressing that with customers paying in the salon, cashflow should not normally be a problem. Action to improve positive cash flow can include taking deposits, which also helps reduce no shows. If a potential client isn't happy to pay, for example, a £50 deposit on a £200 cut, blowdry and colour service, then she/he is likely to be a no show.”

If a client does need to cancel, rather than charging a cancellation fee that could affect your relationship, request a deposit in advance or request full payment in advance.

Retail
Offering a range of products can make all the difference when it comes to your bottom line. Selling products online is easier than ever, with many social platforms, such as Facebook and Instagram, having integrated shopping functions. At the very least, social media is the perfect, low-cost way to market your business and the products you’re selling. Consider the logistics of offering a mail order or click+collect service to clients within a certain radius. This is a great way to maintain your business especially when some clients might want to wait a little longer before heading into the salon to buy their usual haircare products.

Staff
Redundancies should be the last resort so always seek legal advice if you’re thinking this is the only solution for you. Other ways you can balance costs when it’s time to reopen are:
Think about shorter hours: to ensure that all staff get the opportunity to work, advise them of shorter shifts or arrange to pay them half of what they usually earn, until things get busier.
Laying off staff: this is an arrangement where you will essentially tell the employee to stay at home while there is temporarily no work to be done. You will need to seek legal advice before considering either of the above options.