Mandated closures, capacity limits, lost clientele, increased operating expenses: Nail salons have experienced a serious blow to their bottom line over the past year due to COVID-19. And although salons in many parts of the country have reopened, it remains a challenge for business owners to recover lost profits. “Right now, you need to spend more money because of the extra personal protective equipment (PPE), sanitation and supplies costs,” says Lauren Polino, founder and CEO of Los Angeles-based Color Camp. “It seems like expenses are only going to keep going up.”
If generating additional revenue this year to make up for those expenditures seems unrealistic, it may be time to explore where you can save money to keep profits steady. “When circumstances change, it’s time to reevaluate your priorities and needs,” says Jaime Schrabeck, owner of Precision Nails in Carmel, California, who advises examining each area of your business to determine where you can save. “The top operational cost for most salons would be the commercial lease. For salons with employees, it would be labor.” Before you feel too daunted by the task of figuring out where you can cut costs, check out these penny-pinching tips from savvy salon owners.
1. Negotiate Your Rent
The biggest expense for many salons—monthly rent—may also seem the least flexible, but don’t be afraid to try to negotiate your rate with your landlord, advises Kristin Pulaski, founder and CEO of Paintbucket in Brooklyn, New York. “In New York, the price per square foot has really gone down, so then you have to wonder: Why am I paying the full price that I negotiated my lease at three years ago when other people are paying half that rate now?” says Pulaski. “I think landlords know the situation, and they’d rather work with you than lose you. They’re not going to get the price that you were paying with a new tenant, and they don’t want their spaces to sit vacant. It’s all about negotiating and coming to an agreement that works for each of you.”
2. Reduce Labor Costs
While reducing staff hours or pay is one of the hardest situations a salon owner may need to confront, it can make a significant impact on the health of the business in the long run. It’s a decision Amy Ling Lin, founder of Sundays in New York, wishes she’d made earlier last year when business conditions started to deteriorate. “I didn’t cut costs for my staff in February and March, and it wasn’t the best decision,” admits Lin. “It doesn’t mean you need to let everyone go, but it means scaling back. You have to tell people the truth: ‘We aren’t doing well right now, and we have to adjust your hours.’”
One way that Lin scaled back after Sundays reopened last year was to close the salon a few hours earlier each day, effectively reducing staffing costs. “The business didn’t change much because clients were flexible, but we saved the cost of paying three employees and a front desk manager for that time,”she says.
Polino, whose salon was still closed at press time due to state mandates, says she plans to carefully evaluate staffing when Color Camp reopens. “There are capacity restrictions in many states, so the first thing I would look at is front desk hours,” she says. “Can we replace some administrative functions that may not be as necessary? Are there ways we can minimize front desk staff using technology to allow people to check in ahead of time from their phone and maybe even check out on their own? These are things that customers are going to be looking for anyway because they want a lower-touch experience.”
3. Re-evaluate Your Monthly Expenses
In addition to reducing rent and labor costs wherever possible, take a close look at your other monthly expenses. Even small reductions can add up to big savings over time. Your best bet for curbing spending, advises Schrabeck: “Simplify the tracking of your expenses by using one business credit card and one business bank account for all of your transactions. Then, review every monthly expense for opportunities to save, especially automatic billings and contract-based services like your internet and phone services.”
Make sure to compare prices on all services you utilize, especially if you haven’t done so in several years. If your salon is located in a state that has energy deregulation, shop around for your electricity or natural gas supplier for the best price. Consider eliminating extras like WIFI or cable TV and canceling recurring subscriptions to services you no longer need.
4. Save on Supplies
Take a hard look at what you spend on supplies—everything from salon staples like gels and polishes to cleaning products—to determine what you really need and if you can cut down on the cost. “List all sources for your products and supplies, obtain current pricing information and research cost-effective alternatives,” suggests Schrabeck.
UK-based nail artist Livia Murrish has saved money on supplies by buying in bulk, particularly on the products she uses most often, like monomer. “I used to hold back from buying in bulk, as it tends to be expensive all in one go, but I’ve saved so much money and time from having to reorder so often,” she says. Murrish also recommends buying kits rather than individual products, especially for beginners. “You can get a 16-ounce bottle of monomer in most starter kits with prep tools and different acrylic powders for the same price as it would be on its own,” she says. “Look at kits on any website before buying anything individually, because nine times out of 10 it comes with four other items for the same price or just alittle more.”
While it’s important to be conscious of how much you spend on products and supplies, don’t jeopardize their integrity just to save money, cautions Lin. “I wouldn’t sacrifice the quality of the products we use, because that’s the core of our business,” she says. “Our clients are very sensitive and would notice right away.”
5. Tap Into Membership Benefits
Memberships that charge a monthly or yearly fee may sometimes feel like an unnecessary expense, but many offer valuable perks that you could be taking advantage of. Do your research before you cancel. “Visit the website for every membership organization you belong to and review the available benefits for potential savings,” suggests Schrabeck. “The Professional Beauty Association (PBA) is a good example within the industry, but we all likely belong to other organizations outside the industry as well, like AAA, Costco and the local chamber of commerce.” For example, the PBA offers members access to discounts on insurance, product purchases, industry event tickets and education, while a chamber of commerce membership often provides such benefits as affordable access to promotional tools, member-to-member discounts and reduced rental space fees for meetings or events.
For the full article, check out Nailpro's March/April digital magazine.
Lotus Abrams is a freelance writer and former NAILPRO editor based in the San Francisco Bay Area.