Salon Today - November 2008 - (Page 27)

The Economic Picture Within these current economic times, it’s tough to claim any industry is recession-proof, and there’s no doubt we’ll all feel the pinch eventually. But the beauty industry is more stable than many other industries these days, says Brad Masterson, vice president of Y Public Relations and PR counsel to Rusk, Cosmoprof and Professional Beauty Association. Larry Kopsa, a partner of Kopsa Otte CPA, an accounting ﬁrm that serves the beauty industry, concurs. “As I read about the recession, it’s been really interesting to examine our wide range of salon clients from small salons to large chains—many are performing more services per client and seeing numbers go up.” That being said, owners are reporting subtle shifts in consumer behavior and regional differences. Marci Christopherson, Salon Services & Supplies sales manager for Western Washington, says most of her salon clients are still hitting their targets. “But many are reporting that they are beginning to see clients stretch their appointments from four-to-six weeks to six-to-eight weeks. Victoria Thomas Gentry, owner of VAIN in Seattle, Washington, feels the pinch in retail. In addition to the traditional retail items, VAIN carries make-up, clothing, accessories and artwork. “We’re a bit off from other years—we’re simply not seeing the tourists that we’re used to or the people coming in to simply shop. In the nation’s midsection, Larry Silvestri, COO of Mario Tricoci Hair Salons & Day Spas based in Chicago, and a board director for Cosmetologists Chicago, is feeling the impact in spa areas. “We’re seeing an economic slowdown from last year in skin and nail services, but our staple services that clients view as maintenance—cutting, coloring and waxing—are staying strong.” With a mini-boom in natural gas propping up the local economy, sales are growing in to invest in your “As long as you continuestandards high, business and keep your you’ll be well poised when things turn around. ” Arlington, Texas for Daired’s Salon & Spa Pangea. But owner Daired Ogle is still cautious. “You never know if we’ll feel the impact later,” he says In the nation’s capitol, Serena Chreky, who co-owns Andre Chreky the SalonSpa with husband Andre, reports that basic services are still in strong demand and that the massage area is actually up. “Although we are not currently experiencing double-digit growth, we’re still up,” she says. “But I do belong to a regional networking group, and have heard that area medi-spas are being hit pretty hard, suffering 20-50 percent declines.” As president of International SalonSpa Business Network (ISBN) and CEO of Sport Clips, Gordon Logan has developed a more national perspective. “Many of our ISBN members who have routinely seen impressive double digit growth are seeing a slowdown of that growth,” he reports. “While they are still experiencing growth, it may be more in the single digits. Whether you’re still experiencing growth or feeling a few bumps in the ﬁnancial highway, these owners agree that now is the time to solidify your plans for recession-prooﬁng your salon. —Larry Silvestri, Mario Tricoci Hair Salons and Day Spas more, we were prepared for it,” she says. “We established new goals for each department that focused on two priorities—increasing revenues and cutting costs. We made our management team aware of the new goals and responsible for attaining them.” Every strategic plan starts with a budget— something that Kopsa insists all his clients have. “If you’re not working with a budget, you don’t even know if you’re hitting your numbers. You have to have that information upfront, so you can do things differently.” While Kopsa says some salon owners have protested they can’t afford to hire a ﬁnancial expert to help establish and maintain a budget, he cautions that you can’t afford not to. “If you can’t afford it, you shouldn’t be in business. That’s like buying a racehorse, but not being able to afford the trainer.” While a recession-prooﬁng plan starts with a budget, it goes far beyond that—from establishing a cash reserve to taking a hard look at ﬁxed and variable costs, from solidifying the valuable loyalty of regular clients to improving strategies for gaining new ones. A recession plan should streamline public relations, marketing and advertising efforts, so every dollar spent returns the most value to the business. And, it should help you identify opportunities that position you to grow when times improve. Formulate Your Plan Sensing tough times ahead, Serena Chreky gathered her salon’s CPA and bookkeeper last January to develop a plan that prepared her salon for a dip in the economy. “We wanted to know that if our sales dipped by 10 percent or Show Me the Money Chreky’s ﬁrst course of action was to increase her cash reserves to guarantee the salon had > “New stylists are trained to do eyebrow/lip waxing and manicures and pedicures. Now they have a bigger check and a guest who enjoys many services by one provider!” —Beth Oliver, Momentum Salon and Body, Tempe, Arizona >> | 27 www.salontoday.com November 2008 http://www.salontoday.com

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Salon Today - November 2008 Contents Editor's Note Reception Fashion Sense Marketing Roundtable Decor Spa Menu Dream Team Pinch Proof Growing Pains Products Owner to Owner

Salon Today - November 2008

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