Photo: Trina Koster Photography

Salon Business Crisis Management

Valentini’s Hair Design, in Guelph, Ontario has been in business this year for 35 years.  It is currently located in a beautiful old Victorian house that was transformed into a salon.  We spoke with owner Derrick Rutherford about business practices that helped him and his twelve staff members survive the toughest times our salons have faced.  “We have a massive amount of space in an old Victorian house with separate rooms.  The restrictions really never affected us but the lockdowns did.” claims Rutherford.

“In the beginning stylists and salon owners were reaching out to us as industry leaders, asking questions about how they should move forward.  At first we just canceled everybody until further notice.  The next shutdown we had clients pre book their year ahead.  No mayor or MPP was helping our service industry at this time.  We did a couple anti-closure protests which lumped us into the ANTI group.  We were all about getting business open with proper protocol.  We stuck our neck out there a bit and stirred the pot.” says Rutherford.

Be Accountable
Lockdown was a time to reflect and pivot your business model but also take a close look at your business accounts and finances.  It is crucial to have a good accounting process.  “I do all my own books and accounting and have an accountant for year end taxes.  If you are a stylist that takes their shoebox of receipts for the accountant to sort out, you may want to think again.  Many accountants want to do your books for you and charge way too much for this process.  Get all your receipts in order and organized before tax time.  You can save thousands of dollars because your accountant doesn’t fully understand your business like you do.  There are many salons that don’t have an incorporated business.  If your business account is your personal account you will be in trouble.  You need to be paid out of a separate business account.” suggests Rutherford.

“In the beginning stylists and salon owners were reaching out to us as industry leaders, asking questions about how they should move forward.”

Reduce Bills
What about all those bills that keep piling up during shut down?  “Get in touch with your service providers and see what kind of special offers or breaks you can get.  Call your distributor, bank, insurance, phone company, salon software company, landlord, car loan or any one you pay money to and work out an installment plan or deferred payments until you can pay.  Call your business insurance.  If you are closed for ten months will you pay full insurance for the year?  You won’t be paying the same as before covid because your revenue is a fraction of it.  Property taxes and heat and hydro, HST, payroll taxes still have to be paid despite no money coming in.” says Rutherford.

Charge What You Are Worth
“Getting all your financial ducks in a row is crutial.  Does your service cost per hour work?  Do you need to go $10-$20 higher for services now that your expenses are higher?  Many salons just absorbed the extra costs and revenue loss.  I don’t understand why hairdressers and salon owners just don’t want to charge what they are worth.”

Taking Things for Granted
“Look into government small business loans and grants for help but don’t overspend.” says Rutherford.  “If you take that $60K loan, you have to pay this back.  Now we will start to see businesses close because they just can’t keep up.  The government is starting to ask for the $40K pay by December 2023.  If your business closes down the government will ask for the full $60.” warns Rutherford.

If you manage to make these changes and get some breaks, you are already in better shape than you were before.  Think about other ways that you can sell your products and services. If you haven’t already, work with your product brand or distributor to create an e-commerce site so you are constantly selling retail.  Connect with your clients through paid Zoom consultation calls.  Pre-book your clients for the year ahead.  Take deposits for new guests minimizing “no shows”.  Create special service care packages to sell.  Necessity is the mother of invention and your creative mind can find revenue ideas to explore. Get pumped and positive, get a coach, go read a motivational book and just do it!

Contact Derrick Rutherford, Business and Stylist Coaching for Single Operator or Multiple Person Salon Owner: