The Federal Government announced a set of economic forecasts last week, highlighting the fact that Australia is about to head into a difficult – and potentially lengthy – recession.
For salon owners, many off whom have just survived the most difficult six months in their business’ history, the news signals further bumps in the road ahead. But there are some factors to take into account to give your salon the best chance of coming out the other side.
Be prepared for the end of JobKeeper
Assuming your salon qualifies for the second phase of the JobKeeper scheme, you need to be prepared for how you’ll carry on when it ends on March next year.
Prime Minister Scott Morrison stated that the unemployment rate will likely come in at just under 9 per cent at the end of to 2020/21 financial year.
“This is of concern to salon owners for two reasons,” says business advisor Jane O’Connor. “Firstly, owners need to work out how they’re going to pay salaries once JobKeeper disappears. That’s something they should be preparing for now. The goal will be to not have to let people go, and therefore not add to the unemployment rate. Secondly, the end of JobKeeper means that even if owners are able to hold onto their staff, chances are that many of their clients may experience unemployment around March time, which will mean less disposable income, and hence a reduction in bookings. They must expect and plan ahead for that.”
Retail sales will improve
The time for pushing your products isn’t over. While some customers may not have the cash to keep up their regular treatments, they’ll be more likely to rely on professional products to use at home. “The Lipstick Effect is real,” says Jane, referring to the concept that in a recession, people will pull back on costly investments, but will still spend money on products that make them feel better about themselves and the world. “So push your products, make sure your website is user-friendly, and don’t make people feel uncomfortable about not being able to come in for treatments. You still need to be their safe space until we’re all in a better place.”
Visit the #BEAUTYSTRONG hub at https://www.professionalbeauty.com.au/beautystrong/
For more news and updates, subscribe to our weekly newsletter.