The Jo Hansford salon may be situated in the affluent London district of Mayfair, alongside some of the most extravagant fashion names in the business, but managing director Joanna Hansford knows that nobody is 100% recession proof.
Here are her top tips on keeping both your clients and your bank manager happy and above all, keeping your salon open in a challenging financial climate.
- If you’re out of cash and out of credit, you’re out of business. You need a quarterly budget based upon historic costs and projected additional expenses. Monitor trends in your cashflow to anticipate tricky situations.
- Keep a tight rein on your debtor control account. Businesses are holding on to their cash longer than before, resulting in late payments – and these are having a ripple effect throughout the small to medium enterprise community. Keep clients within agreed credit limits.
- You can forecast expenses, but you can’t forecast revenue. In prosperous times, companies tend to clock-up a lot of needless expenses. It’s time to take a long, hard look at those. From printing and couriers to surplus staff and expensive energy suppliers, cutting back will help you weather the storm.
- Stay in touch with your creditors. Building a good relationship with lenders will help you should you ever need to renegotiate the terms of your loan agreement.
- Growing profit is more important than growing revenue. Make sure you understand what drives profitability in your business. To spur demand, you may have to get creative with pricing and product offerings.
- Many companies cut advertising/marketing budgets during recession. This can be a mistake. Research shows marketing bolsters companies during recession. Instead of cutting these budgets, review the methods you are using. Does your current strategy bring in the right results? Do you need to redefine your goals?
- If your business is slowing down, you can’t afford to lose any customers, so stay competitive by analysing every aspect of your customer’s experience and try to create the most seamless and memorable one on the market. That should do more than just keep your customers loyal, the positive word of mouth generated will help attract new customers without costing a penny.
- Now is the time to hammer home that value for money message. Bring it back to the top of your agenda.
- As other businesses batten down the hatches, perhaps you could go out and win their customers.
- Keeping your staff well-motivated and super-productive will increase revenue and help during quieter periods.
- Brand leadership needs a clear, confident strategy to maintain success and to remain fixed on your customers’ radar.
- Some sectors always have money to spend, whatever the economy is doing. Maybe it’s time to re-think your target audience.
- Emphasising how your brand/service makes people feel can help lock-in customers for the longer term. Be passionate in everything you do.
- Now could be the time to extend your brand into new, more fruitful avenues. Conversely, it could be better to narrow in on core activities/markets. If your market is changing, staying the same is not an option.
- When the outlook is miserable, everyone needs more fun in their lives. Make sure your salon is somewhere clients can come to relax, enjoy themselves and have a giggle.
Expert Advice on Fighting the Credit Crunch
- Keeping salon staff motivated in the credit crunch
- Top tips to help your salon beat the credit crunch