What the spring statement means for your salon business

Philip Hammond, chancellor of the exchequer, has presented his Spring Statement to parliament which provided information regarding the health of the economy. In the statement the chancellor spoke about progress on Budget issues and invited views on changes the government is considering, one of those being VAT. Slightly better growth forecasts with falling inflation and borrowing marks a turning point for the UK economy according to the Chancellor’s recent Spring Statement. Ryan Fox, salon consultant, gives an update and explores the implications for salon owners. This is the first of the new Spring Statements with the main Budget being presented last November. Basically, they have flipped round so the Budget is now in the Autumn followed by the Spring Statement. Growth An upbeat message from the Government does not mean we are out of the woods. Growth is still set to be low at only 1.5% this year and remains at 1.3% for 2019 and 2020. Remember these figures were already revised down in the Autumn from a maximum of 2% and with inflation also forecast at 2%, you can’t rely on the economy to grow your salon over the coming years. What to do You should look at new ways of growing your salon in order to get growth, whether that’s a price increase, improving the performance of your team, investing in better hairdressing and business training, filling more of those gaps in your appointment book or introducing new services. Wages & Employment Unemployment remains low and wages are set to start rising faster than prices over the next five years. New National Minimum Wages come in to effect from April 2018 to the following rates: Apprentice £3.70 Under 18 £4.20 18 to 20 £5.90 21 to 24 £7.38 25 and overs £7.83. What to do You should review your prices, targets and wages so you can ensure you can continue to make a profit with the new minimum wage rates and create an environment where stylists can generate their own pay rise from generating more income. If you don’t get this right, you may as well be working for someone else. Ryan Fox is a hair & beauty salon consultant who improves salon performance through training and innovation. He offers help & advice on all the issues raised here. Ryan also offers an Accountancy Service specifically designed for salon owners to help manage your finances… For more advice on growing your salon or his salon accountancy service visit www.umbrellaconsulting.co.uk