Is Your Salon/Spa Business "Recession Proof"?
When I first became involved with the salon and spa industry, many times I would hear how "recession proof" the industry was. "People will always need a haircut," was the line most often used. Now, some of those same people are blaming the "recession" for their financial troubles and woes. One can't have it both ways, so which is it? Others are saying little to nothing. Why? Because their salons and spas are "recession proof" and it had nothing to do with the industry and everything to do with business planning. You see, in times like these, the truly "recession proof" businesses are doing fine and are looking for opportunities to do even better.
Think it is too late to "recession proof" your business? Think again. The two best times to start the process is when the business first opened and NOW! All it takes is a plan, some time and discipline and yes, it is a process. Just like most things in life, there are no quick fixes. It took a while to get into the financial troubles and woes, so it only stands to reason that it will take some time to get out.
Here are some tried and true strategies to recession-proof your business:
- Create a cash-flow plan: Nothing happens without a plan. Decide how this month's revenues will be spent before the month begins. Write it down so you can tell every dollar where to go instead of wondering where it went. Then stick to it. Live within the cash-flow plan and you will be amazed at how quickly the profit you projected shows up at the end of the month.
- Create a cash reserve: You will need it as you begin making your business "recession proof." Having a little cash set aside will help cope with the unexpected equipment failures and other rainy days that can happen. A separate money market account works best. Believe me, it will rain. Having this cash umbrella will prevent you from getting soaked.
- Get rid of the debt: This is what got you here in the first place. Credit cards, loans and other debt rob a business of its most powerful wealth building tool, its revenues. How much financially stronger would your business be without all of that debt? Make a plan. Pay off those credit cards one by one and attack the loans with a vengeance. "Recession proof" businesses have little to no debt.
- Make that small cash reserve bigger: Now that the debt is out of the way, go back and beef up that cash reserve account. Having three to six months of operating expenses set aside is a great insurance policy against anything that might come your way, even a recession. It also provides many nights of restful sleep. Something else I am sure has been lacking lately.
- You did it! If you get to this point, it is safe to say that your business is "recession proof." Now, get to the business of growing your business, offering the perks and benefits to your staff that you always wanted, and enjoying a business that gives you positive energy instead of stress.
It isn't always easy - but it is always worth it. It starts with your decision to drive what happens to your business instead of letting your business happen to you. Make that decision today. Create the plan, work the plan and before you know it, you'll be quoting Alfred E. Newman, "What? Me worry?"