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Beauty Salons are thriving - Insights you should know

28/03/2014

Insight

The good news for small business growth in the beauty industry is that consumers have recently turned away from big names to the independent salons. This shift is attributed to the growing distrust in big business and other large institutions. The great news for small players in the sector is that they can win new customers and grow their businesses if they get theiroperations and image right.

Of course, small salons have to project as stylish and innovative an image as larger companies in order to woo those new clients. If your premises are looking a little jaded, you could be dissuading people from entering. If your range of products hasn’t changed for a number of years, customers won’t have the choice that they’re now used to enjoying.

Professional presentation and a good range of services are crucial to small business beauty salons. Getting finance to change things fast by way of a business loan may be difficult, but there are other funding options – such as business cash advances and peer-to-peer lending – that are much easier to negotiate.

Technology: the beauty salon challenge

One trend that has forced salon owners to think differently is the growth of the home beauty devices. Budget-conscious beauty devotees are increasingly opting to buy technology that only used to be available in salons – examples include blue light devices to reduce acne breakouts and microcurrent devices to improve facial contour.

This means that forward-thinking salon owners are devising new strategies. They are finding other ways to target younger customers rather than continuously emphasise the anti-ageing aspect of their treatments. They are also branching into nutrition and exercise in order to widen their appeal to people who want to look their best and investing in the male beauty market, which Mintel suggests is continuing to grow at a healthy rate.

It’s fantastic to learn, then, that small salons are winning against these kinds of challenges. According to a 2013 Salon Services’ Beautiful Britain report, UK salons increased their staffing numbers by 10% in 2012 and just over 25% had plans to recruit new employees at some point this year.

We hope that the widening of the small business finance market has helped those salons to react faster to new technologies and developments. For example, a business cash advance can be processed in around 10 business days and decisions on a peer-to-peer loan can also be made within a matter of days. In such a fast moving sector, where product stock needs to follow seasonal changes, quick approvals matter.

However, technology also provides opportunities for savvy salons. Consumers in the beauty industry tend to be brand loyal but they are also more influenced by recommendations from friends than celebrity endorsements. As the social networking phenomenon continues to grow, small businesses can take advantage of Facebook and Twitter shares just as much as large corporations.

If a salon can generate a moderate but engaged following on its social media profiles, the ‘share effect’ could be impressive. Of course, having a polished online presence also requires having a high quality website. This can allow you to give potential customers a virtual tour of the salon, build an income-generating email campaign list and use online surveys to get feedback. These relatively low-cost options have become ‘must haves’ to communicate the unique qualities of small, local businesses.

The beauty salon sector is one we love to highlight because reports from companies such as First Research state that large businesses have very few advantages over smaller ones. With shopping centres being full of the same old names, we say ‘bravo’ to the independent beauty salon owner on the high street!

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Liberis is a responsible lender. Liberis does not offer 'short-term loans'. The minimum expected duration of a Business Cash Advance is 120 days / 4 months and typical expected durations are 6-12 months. These business financing products are not consumer loans.