I know, you may have entered 2022 with a sigh of relief as the mask mandates were lifted, the majority is vaccinated, job employment went up in 2021 and music festivals are erupting all over the world. Exciting. But don’t get lost in the clouds of floating glitter dust wafting off the hot summer bodies celebrating Olivia Rodrigo and Jack Harlow. A potential recession is on the horizon. Are you prepared?
Whether it’s a “mild, shorter” recession or a major one for 2023, salon owners, small business suit renters, boutique owners, etc. may still feel the effects of lower profits due to people spending less here in 2022. Hang on tight as there is more to think through and potentially prepare for.
So where do we begin?
Well, for starters we can pat ourselves on the back for surviving a lot of hardships the last two years. What’s left is our resilience, which may come in handy in 2023-2024. So yes, get out and celebrate while also meticulously setting yourself up for financial success despite what may come.
We are overcomers, but let’s be smart about it and stick together as we look at steps to take to prepare for a recession.
The Economic Obstacles for Hairstylists to Look at
Prices continue inflating across the board, not just with gas, and it’s just the beginning. There are struggles that could come to a head way in a variety of social/economic areas.
Take a look at the scandal of high vital prescription drugs prices (the insulin crisis), or larger corporations buying out smaller ones at the expense of employee job security.
Then there are minimum wage trade-offs where the large corporations like Walmart make sure to absorb the effects of raising minimum wage by taking away bonuses.
What’s more is suppliers can’t get goods to companies in a timely way with the potential to only get worse originally due to the pandemic and now due crises with Russia and China.
We have AI and robotic technology replacing human workers, and we have to ask how all of this affects us and hour industry? It’s in the spending. Hair services are often considered a luxury, not a lifestyle. With hardships in the economy, people tend to save which can affect your wallet.
Wherever the economy is headed, it’s worth taking a look at ways to protect both your company and you with the heat of inflation potentially landing us in a recession.
10 Steps for the Hair Industry to Insulate Against the Effects of a Recession
1) It’s a lifestyle, not an expendable luxury.
The truth is, getting your hair done on a regular basis is an act of self-care. It does more for a person than just make them look good. It soothes strained nerves during the gentle exfoliating shampoo and head massage. It reminds clients that they are human and deserve safe touch. It lets people know it’s ok to relax in the midst of a hyper-worked focused society. It’s often a haven for expressing grief and joy. The beauty we provide runs far deeper than outward appearance, although that is beautiful and important too. Are you educating your clients about the difference between lifestyle and a superfluous luxury? Our generation and the generations to come get to accept this new adage, which in turn helps clients continue to budget appropriately for your services even in hard times.
2) Fortify Your Personal Wealth with Debt Management.
With whispers of an impending recession, pay down or off your debt. This helps fortify you during a recession. Take a more aggressive approach by allocating more funds to depleting those credit cards until they are gone.
3) Consider Selling Your Home.
For those of you on the fence about whether to sell or not, here in 2022 it’s a good option. The market is ripe for it so if you’re considering it, take that leap as the next two years might not offer this option anymore.
4) Take Advantage of Helpful Apps.
There are a lot of apps out there now that will clean up your excess subscriptions, such as Truebill. People are often surprised at the amount of money they can save per year just by cancelling active but forgotten subscription.
5) Set Up an Acorns Account.
The beauty of Acorns is it’s mindless investing. They offer a feature called “roundups” where for every cent you spend, it’s rounded up to the nearest dollar and invested into your portfolio. You can also set a designated amount each month to have automatically invested. When you automate any financial investment, it can grow for you without worry.
6) Capitalize on the Great Resignation.
So much has changed over the past two years as the work-from-home lifestyle has increased. For hairstylists considering going independent, now would be better than say in 2023 or 2024. When times are hard, it’s not easy to make a jump from being part of a salon to independent boutique owner or suite renter. If it’s now or later, now is the better option. This way you can be set up prior to surviving the effects of an economic recession.
7) Stock up on Extra Supplies.
With supply chain obstacles that could get worse, it’s a good idea to get more of what you love and store it for the next year. Think Bulk, even if you are a solo business operator.
8) Marketing Exposure.
Get your videos and reels up and running now! There’s no better way to gain quality exposure than through the free and easy-to-learn video options on Instagram and Tik Tok.
9) Add-on Services.
With the potential of a recession, it might seem like a good idea to run specials or discount services. There is no need to do this. In fact, don’t run specials. Instead, focus on increasing your add-on services at the bowl. Look into exfoliating scalp treatments, warm hot oils, or partnerships with other beauty related entrepreneurs in related industries. Partnering with an esthetician at a time like this is a great way to offer paraffin wax hand massages while they get a treatment at your bowl. This is an add-on for both you and your esthetician, and can land you with cash that adds up.
10) Think Mini-Products.
Remember the dollar section at the store? How you think you’re getting a deal spending a dollar but then somehow you walk out of Target having spent $100? This is the perfect strategy to capitalize on at a time like this. Create a cute setup near where your client sits for your service. The catch is to put a variety of different small items into a bowl and have them mixed up. This creates a visual playground for a client who may want something to do while their color processes. Let them look through and pick products within the range of $5-$10. You never know, they may walk out with 10. Then so does the next client. And the next.
Resources: 4 Ways To Protect Your Finances From An Economic Downturn – Forbes Advisor
Inflation Explained: The Real Reason Prices Are Going Up (perfectunion.us)
Recession coming in 2022? What GDP's latest dip means for US economy (usatoday.com)