5 Ways to Economy Proof Your Business
Are you noticing business is slower than normal? I’ve heard from many of my clients that business is slower than normal and I can hear it in their voices that they are starting to get nervous. I get it, I’m also noticing a change in spending behavior because the economy is unstable right now. People are finding ways to do things themselves, rather than paying a professional. So, there is no doubt many consumers are spending less on things like trips to the spa, or facials with the esthetician because they have to prioritize using their money to cover the rising cost of living.
If you’ve been in business for any length of time, you know there are going to be ups and downs. If you want to economy-proof your business, you need to prepare for fluctuations and have a plan to continue thriving even in a challenging economy. Here are 5 things to start working on that will help you economy-proof your business.
Diversify Your Service List
Many of the MedSpas I work with focus on offering high-quality, high-price services that fall into the “nice to have” category. In a thriving economy, this is a great strategy to help you work smarter, not harder. In today’s economy, only offering high-priced services that are a “want”, not a “need,” can quickly price you out of many people’s budgets when they are forced to choose between paying bills and doing something for themselves.
To start preparing your business to weather economic ups and downs, consider diversifying your service list by adding some lower-cost options. This could be express versions of your high-cost services, or include things like traditional facials, teeth whitening, hair removal, or any lower-cost beauty service. Clients that used to come in for $700 injections may be able to budget for a $150 facial before they can afford to come in for injections again so giving them lower-cost ways to continue to do something for themselves AND stay connected your business is smart.
If you are a nurse by education, you could also consider adding something health-related to your menu. I only suggest doing this if health and wellness are something you are passionate about. That said, when budgets are tight, you may find people are more willing to spend on services they feel are directly related to their health, as opposed to those that are related to their appearance.
Lastly, I also suggest looking at your product lines. If you carry an affordable line, retail is a consumable good that provides a great opportunity to continue generating revenue during a down economy. There will always be people who swear by your $200 serum, BUT when someone is budgeting, expensive skincare is going to be one of the first things on the chopping block, so try offering an alternative to keep those clients seeing you and not buying from a big box store.
2. Maintain and Grow Existing Client Relationships
Many business owners get caught up constantly trying to bring in new clients. They spend thousands on advertising that may only land a few loyal clients. While there will always be a time and place for paid advertising, and it is important to bring new clients into your business, don’t sleep on the power of maintaining and growing your existing client base. There is always room to leverage existing relationships and make them more profitable. If you are not communicating with current clients regularly you’re leaving money on the table. I highly suggest you start looking at ways to leverage existing client relationships. This could include:
Communicating with existing clients consistently via email and/or text
Creating special offers for existing clients only
Offering perks for existing clients that reward them for staying loyal to you (think loyalty programs, VIP events, things like that.)
Remember, filling your schedule with existing clients, means more profit. There are no acquisition costs for clients you already have so it’s in your best interest to determine how to grow your current relationships before you pursue new ones.
3. Look Inside Your Spa
One way to ensure your business makes it through a rough patch is by taking a look inside your spa and making sure you’ve got a handle on all your expenses. Not only do you need to know your numbers but you need to look at every dollar you’re spending and make sure it’s being spent efficiently. This includes everything from overhead costs like rent to supplies and employees.
Scheduling is another huge issue I hear about when talking with MedSpa owners. If you have part-time employees, and/or treatment rooms that aren’t being used to capacity, it’s time to take a look at how you’re scheduling services and your staff. Rooms that aren’t operating at full capacity could be rented out to other beauty business owners who offer services that complement yours. For example, if you’re a MedSpa owner with a treatment room that is only booked 50% of the time, you could rent rooms on a part-time basis to a lash tech, or waxing specialist for added revenue AND a new stream of people gaining exposure to your business!
I also suggest taking a look at your technology. Are you spending a lot on booking systems or other technology you aren’t fully using? It may be time to switch. Or, are there ways you could use technology MORE to make your business more efficient? If you find it difficult to look at your internal operations objectively, contact me. I have resources that can help including financial people that look at your books, to operations experts that help you identify and fix inefficiencies.
4. Create a Cash Reserve
If shit hits the fan and the economy goes bonkers, do you have enough cash reserve to pay your bills for a few months? If the answer is no, it’s time to pull back on “nice to have” expenses and start stock-piling some cash. Having some cash reserves is a great way to ensure your business can stay afloat if the economy takes a serious hit. As we learned during COVID, you just never know what’s coming down the pipeline. Having cash on hand can help you weather whatever storm comes your way.
5. Build Your Business Network
When business is down, or the economy is going crazy, having some business besties in your corner will be helpful. These are people you can call on for advice, a brainstorming session, or resource recommendations. They are also people who will send referrals your way. So, if you don’t have a strong network of business contacts, get out in the community and start going to some networking events. Not only are these good for making business connections, but you may also gain a new client or two. If in-person networking isn’t your thing, there are plenty of online networking options now too but I specifically like local, in-person networking for MedSpa owners because it allows you to grow your network AND potentially connect with new clients, all in one shot.
How Do I Start?
If you read through these recommendations and got overwhelmed, I can help you prioritize how to get started. One of my areas of expertise is communicating with existing clients. From a communications perspective, I can help you create ways to leverage existing relationships and as I mentioned, I also have resources that can help with financials and operations.
To ask specific questions, or get on my calendar, schedule a Fit Call with me and we can talk more!
