In this article for The Salon Magazine, our Founder and Director, Jonathan Cooper discusses the financial strains and challenges that come with being a salon owner and provides advice on how directors increase their business’s financial health.
If you missed the original article, catch up below.
Jonathan Cooper, Founder and Director of The Director’s Helpline – a free, impartial helpline for company directors currently experiencing stressful or pressurised financial circumstances – shares advice on the one thing salon owners can do to increase the financial health of their business.
In recent years, it’s been a tough and turbulent time for many businesses, especially salon owners.
You’ve faced, and continue to face, financial challenges from all angles – rising energy costs, increasing business rates and supply chain costs, Bounce Back Loan repayment, and recovery from the pandemic, to name just a few.
Against the backdrop of a recovering economy and cost-of-living crisis, consumers have been paying closer attention to their expenditure more than ever before, too. Their confidence in spending has been negatively impacted, which has seen many cut back on ‘luxury’ items and services.
This shift in spending habits has affected the footfall and financial health of SMEs in the salon and beauty sector in recent times, as a result.
It’s, therefore, perhaps no surprise that last year research found that two-fifths of salon owners were anxious about the future.
The National Hair & Beauty Federation’s latest report has also revealed debt is a problem for 56% of sector businesses, and that 45% of businesses with debt estimate it will take between 2-5 years to clear.
But while salon owners like yourself are being financially attacked in a multi-pronged manner – being forgotten and not getting the help needed – it’s important to remain positive, because support is out there.
Your business is your passion and expertise, while your company is the legal entity that contains your business. It’s important for salon owners not to overlook this.
So, if the mass of economic challenges have put pressure on your salon’s cashflow, and you have debts, it’s important that you don’t fall into the trap of thinking your business is ‘in trouble’. It’s the company that’s ‘in trouble’, and that it’s responsible for managing any debts.
As an entrepreneur in this sector, you bring the creative flair and skills to your profession. It isn’t, and shouldn’t, be your responsibility to understand the complex funding options or business structure.
This is where it’s vital to invest in good people and good advice.
They will provide an advice and support network that empowers salon owners. They will provide the insights and options to help you feel more in control, enabling you to make informed decisions that your salon’s financial health front and centre.
So, if salon owners do one thing differently this year to future-proof their business, it should be to invest in the right accountant and explore free, independent advice.
This will not only help to create a more robust company, but it will allow for greater proactivity – helping to prevent any testing financial circumstances from materialising.