Bringing Your Salon’s Business to the Next Level
Written by Team 365 finance
Expanding or upgrading your business is crucial if you want to increase your revenue. Successful businesses need to reinvest the money they make in order to encourage future successes — hair salons, beauty parlours, and barber shops are no different.
If you have the resources, improving your business might be a good way of avoiding the impact of tough economic conditions. For instance, the ongoing cost of living crisis is affecting salons the same as everyone else — 94% of salons say they’re having to deal with a considerable increase in utilities bills throughout 2022.By attracting new customers with marketing or new equipment, you may be able to boost your revenue enough to combat rising expenses.
However, it’s vital that you invest in the right areas. To help guide your purchasing decisions, we’ve suggested a few critical areas below that salons need to spend money on if they’re looking to expand or increase their market share. Read on for more.
Where to Invest Your Hair and Beauty Salon Business Funding
Purchasing high-quality equipment is a great investment for any business with cash or funding to spare. Salons in particular benefit from this investment because of how much of the business relies on specialist equipment. You might spend thousands on top-shelf hair care accessories alone, and that’s without looking at the consumable resources like dyes and shampoos.
If your equipment is broken, substandard, or out of date, it can negatively impact your customer satisfaction. Dissatisfied customers and bad online reviews can reduce your revenue significantly as you lose customers due to a poor reputation. If you’re noticing a downward trend in the quality of your work due to poor equipment, purchasing new appliances before there’s a noticeable impact to your revenue is crucial.
This year, we surveyed our clients across all industries to identify their investment priorities: alongside supplementing cash flow and expansion, hair and beauty salons primarily chose to invest their funding into new equipment. While skills and knowledge are an important part of providing a great cosmetic experience, the right equipment is necessary to properly use those skills — don’t let substandard tools decrease the quality of your work.
Since most salons require physical premises, one of your biggest expense categories will be upkeep and maintenance on the property your business operates out of. If you have high monthly expenses and are struggling to increase revenue, you might never be able to source the funding necessary for large-scale renovations or improvements (like decorating or branding renovations like signage).
However, making these renovations is crucial, especially if there are visible problems like damaged signage, bad paint jobs or scratched up flooring. Problems like these can harm your reputation, as even if your work is phenomenal, many customers may judge you more on the surroundings in which they receive their beauty treatments.
Our client survey found that refurbishment was one of the least popular investment choices among hair and beauty salons, so it’s likely that many salons are losing out on business that could be retained by a bit of redecorating. It’s more than just an aesthetic improvement: if the renovations add space to your premises (i.e. a hairdressers’ having another chair installed) you may even be able to expand your business and thus increase your income.
In the last five years, the number of salons in the UK has grown by 25%. If you’re looking to stay competitive in a growing market, a great way to spend your salon funding is to invest in high-impact marketing. But investing in marketing can be difficult if you don’t have experience of the field or an understanding of how best to market a hair salon.
If you’re struggling to get started with marketing, look to your salon shop front. Since the services of most hair and beauty salons will happen within a brick-and-mortar establishment, the decorating and signage of that establishment are a great place to start creating your brand. Having a brand (i.e. a well-defined company name, logo, and culture) will make your marketing materials much more memorable.
Once you’ve started building a brand, your next step should be moving online. Research online marketing opportunities, particularly those offered by social media outlets. By purchasing Pay-Per-Click and social media advertising, you can significantly boost awareness of your brand, which helps increase your audience and attract more customers.
You may be operating your hair and beauty salon as a one-person business, which can be a deeply stressful job. If you have the money, hiring staff to take care of some of your business functions can be immensely beneficial.
While hiring another stylist or beauty technician might be the first thing that comes to mind, consider what else goes into operating your salon on a day-to-day basis. Even hiring a dedicated cleaner can free up huge amounts of your time — as well as vastly improving the look of your premises.
Administration staff are also a great choice, as having someone to handle the scheduling of a busy salon can ensure nothing goes wrong with the running of your business. If you don’t have a financial background, hiring an accountant (or outsourcing your bookkeeping) can help keep your finances error-free without a huge time commitment.
The National Hair and Beauty Foundation reports that 42% of salons are in debt. Most of this debt is to traditional lenders like banks, which means the repayments terms can be difficult to handle. If you have significant debts, clearing them should be your first priority.
Once the debt has been cleared, you’ll have much more control over your spending, and have significantly less financial stress. While you’ll still have other monthly expenses to deal with, these should be far more manageable once any loans are paid off.
While clearing debt should be a priority, it’s much easier said than done. You may need to look into alternative financing sources, like a merchant cash advance, to pay off existing debt.
Funding Your Hair and Beauty Salon with Rev&U
What is Rev&U?
Our Rev&U Cash Advance is an unsecured business finance solution that allows business owners to quickly raise £10,000 to £400,000 in funding. Unlike a traditional bank loan, there are no interest rates or fixed monthly payments. Instead, repayments are taken from a small percentage of your future debit and credit card payments.
One of the key benefits of a Rev&U cash advance is that the application, approval, and funding transfer all happens very quickly. For instance, with 365 finance, we can approve your application within 24 hours. The fast turnaround time means that if your salon is faced with unexpected expenses or a sudden loss of funding, Rev&U offers a low risk solution for your financial troubles.
Another one of the benefits of a Rev&U cash advance is that repayments are tied to your credit or debit card sales. Whenever you process a sale where the customer pays with credit or debit card, a percentage of that sale goes to the organisation that provided the advance. You don’t need to worry about not making payments during less profitable months — any sale you make will automatically pay off a portion of the advance.
Receive Funding Fast from 365 Finance
If you’re interested in any of the investment options we’ve suggested above, you’ll want to consider Rev&U. With Rev&U, you can purchase new salon equipment, hire new staff, or get started on any renovations you’ve had to postpone.
Our Rev&U cash advances can be acquired quickly and easily; they’re also very low risk when compared to traditional financing like bank loans. Considering how strongly inflation can impact small businesses, our merchant cash advances are a great choice in the current financial climate.
A Rev&U cash advance is perfect for SMEs (such as salons, hairdressers, and barbershops) that are looking to immediately reinvest any funding they acquire. Additionally, the revenue-based repayments mean that you don’t need to worry about struggling with debt after applying to 365 finance for funding.
At 365 finance, we can provide both long and short-term finance solutions, with revenue-based funding available from £10,000 to £400,000 in capital. Apply for funding today without affecting your credit score, or speak to our team to find out how we can help your business. To find out more, head to our website.