It is no secret for anyone that owning a successful, profitable, and stable beauty business nowadays can be an uphill battle that comes with many challenges for owners and beauty professionals alike. As the times change, the beauty and spa industry needs to adapt to survive in this fast-paced world. Building a career in the beauty industry is not a sprint, but a journey.
As estimated by Bloomberg, up to 80% of all new small businesses fail within the first 18 months of their start, which is not a surprise for anyone who knows how rapidly a salon, spa or other beauty business can get close to shut its doors forever before even really getting started.
Today, we are going to list the top reasons why many of these failures happen:
1) Undermining the importance of online presence
Today, the consumer controls the market at an important extent, being able to access to any product or service with just a swipe on their mobile phones. If the customer is not satisfied with the service they got, or is unsatisfied with a product, just leaving a nasty review on social media can bring down any popular salon, or scare away potential clients to your day spa.
As such, a positive Internet presence can be definitive for your business, so it’s mandatory that owners are very careful of the way their brand presents itself on the net. From setting a simple Instagram account, to a Facebook page, your business can stand from the rest just by creating a website that represents it.
2) Deficient advertising and marketing strategies
Marketing strategies are very important when it comes to the beauty industry. Poor market segmentation, and inefficient advertising, can terminate your business really quickly. In this competitive world, it’s challenging to survive without the right marketing techniques. For example, spa businesses are limited by the locality they’re situated in and by applying the correct strategies, your business can grow exponentially.
However, you need to carefully select which is the adequate way to promote your business. Maybe paying for an advertising campaign on Instagram or Facebook looks like an amazing idea, but if it’s done without taking into consideration neither its content nor its target audience, you can lose money and time.
3) Not enough knowledge about your target and competition.
Any successful business needs to take into consideration who are its competitors and what kind of costumers it wants to attract, only achieved by a clear market study. That way, it’s easier to get potential clients, by differentiating yourself from the rest, by offering a service no one else can.
How your business does compares to the rest? What kind of products or services can you provide in full quality? Remember, it’s better to specialize in one area, than trying to offer several badly performed services.
What do you know about the target market you want to attract? Can you define who your ideal client is? Having a clear understanding of who your target is absolutely important, and everything from advertising to pricing depends on it.
4) Inadequate financial planning
Financial troubles are a serious problem to many spas, salons, and other businesses. Outside market conditions such as the unpredicted increases in the costs, price wars, and other occurrences pose a great issue for every owner, which can be accentuated by poor planning and reviewing.
Before starting any enterprise, you need to be aware if it’s profitable. Also, ask yourself, is your initial capital enough to start your own business, in the way you’re imagining?
Keep in mind the profit margins, how much do you need to make the business worthwhile? Look at your expenses; taking them into consideration, how are you going to set prices? Likewise, owners need to remember that the incoming cash is not only theirs to personally spend. Everyday expenses and running costs need to come first.
5) Owner’s lack of vision
Excellence starts at the top. Where do you want to take your business to? With a lack of vision, a quickly-growing business can get lost easily. It’s fun to imagine all the possibilities your spa or salon has, but there needs to be grounding in reality.
What are your business goals? Are you planning to expand? When do you think it’s the appropriate time for doing so? How do you see you and your business in some years? Always remember to think of the future, and how your choices may impact in your business.
6) Lack of apprenticeship programs
By training your personnel via apprenticeship programs, owners are making sure their business will be able to provide quality service by properly qualified professionals, which guarantee costumers satisfaction and reviews.
7) Poor management skills
All too often, entrepreneurs are so focused on achieving success and financial independence that forget to properly create a strategic plan that encompasses the needs of their business. As expected, poor management skills are a leading cause of financial failure.
Therefore, strengthening the areas where you know you are weak is very important. Also, creating a schedule and learning how to delegate assignments (like dealing with suppliers) to others while concentrating on matters that contribute to the growth of your business. Is better to share the responsibilities of the business than trying to do everything by yourself.
8) Deficient leadership
Owners need great leadership skills to turn a small business into a big and thriving powerhouse, by keeping their staff united, where everybody plays by the same rules and follow the same goals.
It’s always a good idea to check books on leadership from authors like Stephen Covey, John Maxwell, and Sheryl Sandberg. This way, you can actively boost morale, productivity and prevent conflicts among the staff.
9) Staff instability
The gap between employers and employees are a huge problem in the beauty industry. Be it denial or plain apathy, many business owners tend to demand results from a personnel they are not involved with, thus creating discomfort among their employees, which in the end, only affects the way their business grows.
The only viable way to maintain stability with your employees is by actually listening to them, sharing your business’s vision, and inspiring all of them to achieve success. Similarly, never depend on only one individual. It’s your job as a leader to keep a qualified and balanced team.
10) Stocking the wrong products
“Wrong” can be defined in many ways, but most often, it is linked to the quality of the product. Are you using the cheapest on the market, or are you investing in products that really have visible and lasting effects? Are you using products that are safe and reputable, with a proven record? If you are stocking a product that requires training, are your therapists and staff properly trained? The right product in the wrong hands can also have disastrous effects. Put yourself in your client’s shoes. Would you pay good money and keep going back again and again for your product?
And so, the lists continue on and on. Sadly, while other industries adapt very well to the changing times, the beauty business keeps struggling in some areas. Is there a solution?
Clients need services. But do they need YOURS? That is the important question here. Today, providers need to understand the way people think and act, and why they do it. That way, business paradigms will change for the better.
In the beauty industry, it’s not good enough just selling a product or providing a service. You have to create a unique experience for every costumer you get. Owners need to stop giving people what they think they want, but what they actually need.
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