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Salon Business strategies for tough economic times – part 1

You are surrounded by simple, obvious solutions that can dramatically increase your income, power, influence and success. The problem is, you just don’t see them – Jay Abraham

Even though the economy has slowed down, electricity prices are going up and every trip to the supermarket costs you more than the last one did, there will always be opportunity for success in the Nail Industry.

For example, did you know that the global makeup industry was founded during The Great Depression? Yes times are tough, that’s a fact no one can deny. However, according to local sales expert Bill Gibson, the best time to gain market share is in a down economy.

In a down economy, most people are down and depressed, this includes your competitors – so now is the best time to compete against them.

Here are some practical strategies that cost very little money but will give you some good ideas for boosting your cash-flow and your profitability.


In my experience in consulting with Spa’s and Salons over the years, here’s how most beauty businesses set their prices. (By the way, this is the wrong way to do it!)

Step 1: Secretly send your friends or family members to collect treatment menus from all the competition in your area.

Step 2: Take all the prices for a particular treatment (I.e. Gel Nails) and work out the average price for that treatment in your trading area.

Step 3: Set your price at about R20-R50 below the area’s average in the vain hope that a lower price will cause customers to start queuing up outside your door.

Yes, you do need to pay attention to your competitors, but just because their pricing strategy works for them, don’t assume it will work for your nail business. The first step to boosting business in a tough economy is to make sure that your profit margins are correct, because if they are not correct, regardless of how much your sales increase, you still won’t make money!

The only thing that really matters for the long term success of your business is that you make good profits. If business was a game, then profits would be the way of keeping score. Profits tell you if you are winning the game, or if you are loosing. Sales matter, but your profits matter more. It is possible for your Nail Business to be growing, to have high sales figures, but to be making very little or no profit.

How do I know if my prices are wrong? Here’s a simple test, if you own a reasonably busy Nail Bar or Beauty Salon, check your bank account on a monthly basis. It should be growing. If your balance is always in the same region, or even shrinking, your prices are probably wrong.

In my experience, most Nail Techs have what I call ‘price fright.’ They charge too little to begin with, and they are too scared to increase their prices year after year which results in shrinking profit margins.

Maybe this has something to do with the mindset where new business owners in our industry say to themselves, “I will start off cheap and increase my prices later when I have developed a reputation.” In theory this sounds good, but in practice, this strategy does not work – in fact it is actually commercial suicide.


When I hire staff, I work according to the following philosophy. I don’t pay people to work, I pay them to create results. If you have been running your Nail Business for some time, chances are that you have a few members on the team that aren’t contributing to results and that simply costs you money.

Don’t make the mistake of tolerating poor performance simply because you feel bad about confronting and disciplining people.

Poor performance by one or two team members puts the whole business in jeopardy and creates an unfair environment where other people have to pick up the slack for the work that the poor performers don’t do.

My philosophy in business is very simple – hire slowly and fire fast if you realize you made a mistake. Do whatever you can to get rid of poor performers.


A few months ago I was talking to South African Entrepreneur Neil Malan. Despite the economy, his business is booming.

His advice to small businesses now is to do more of what you are currently doing. Start working earlier and stay open later. He believes that to make it through these times you need to start doing things that you have never done before.

Some people reading this may not like this idea, your staff may not like this idea but please remember that this is a temporary measure. Choose one or two days of the week and let your customers know that you will be open for longer trading hours.


If you want to grow a business an put cash in your bank account today, right now, then you need a customer database. You customer database is your market, if you want to sell more products and services then you need to strategically communicate with your market.

Marketing Guru Jay Abraham once said that the biggest mistake small business owners make is that they think they know what their customers want. As a Nail Technician, you probably know a lot about your customers, but don’t make the mistake of assuming that you know everything. Find out what works for your customer and do more of it. Find out what doesn’t work for them and start doing less of it. The only way you can do this is by keeping an accurate database.

The simplest form of a customer database is an address book and a box of client cards. You could get by with that 10 years ago, but not anymore.

Information is the currency of our day and you can get much more information about your customers if you use software and technology to your advantage. I believe that your customer database is a goldmine in your backyard.

I recommend that you sit and go through their database one name at a time. Evaluate and grade each customer. Ask question’s about who they are, why they buy, how much they spend and how often they come to your business. How can you increase sales if you don’t know who you are selling to? Over the last 6 months, I have been encouraging my clients to do this exercise. Without fail, those who have taken the time and effort to do it has thanked me saying this was one of the best things they have done for their business in a long time!

We hope you enjoyed this article, next week we will give you 8 more strategies that really work. If you need help to grow your Nail Business, get your scheduler full and increase your bottom line, let us know and we will post practical business advice for you on our blog. Don’t forget to join us on our next business and marketing workshop on the 13th of May where we teach you how to earn R1000 profit per day. Click here for more info …

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