Recessionary Fears? Responding to F.U.D. (Fear, Uncertainty, & Doubt)

HairdresserStrong.com was born in early February 2 years ago, and I began Managing a Salon and a Team of Beauty Pros 3 years ago!  I have never been in either position during a recession, but I was a licensed and booked stylist and educator.  So, for this blog post, I have done lots of research and interviews on how to prepare myself, the salon, and my team mentally and financially for what is coming.  Let’s dive in!

First of all, I would like to start by saying that a recession is not guaranteed to come, and no one knows how bad it will be.  Some would even argue that we will not see a recession that will hurt us.  Well, wait a minute!  What the heck is a recession anyway, and how can it hurt us!?

If you google this word or ask how to handle a recession, you will get all kinds of advice and just as much politics about whether we are in one or not.  

Investopedia.com explains “recession”:

-A recession is a significant, pervasive, and persistent decline in economic activity….

-Unemployment is one key feature of recessions. As demand for goods and services falls, companies need fewer workers and may lay off staff to cut costs. Laid off staff have to cut their own spending, which in turn hurts demand, which can lead to more layoffs.

-https://www.investopedia.com/terms/r/recession.asp

These two excerpts were chosen due to their importance as it pertains to our industry.  The first point is economic decline.  Economic decline, as it pertains to us,  means people spending less money, businesses making less money, businesses making fewer investments, and people making less or losing their jobs.  The second point is unemployment.  Unemployment is a little more obvious to understand.  Businesses laying people off, freezing hiring, and/or shuttering their doors means less money to get their hair done.  Less money in people's pockets means less money to get their hair done… get the drift?

Now that I have your attention, what will a downturn look like?  Well, when the Great Recession of 2008 happened, American families who lost their homes were living in tent cities, and the Wall Street types were getting bonuses and bailouts.  Even the bankers started to lose their jobs not long after everything imploded.  One major investment bank even went under.  Needless to say, there were not many people who did not feel their pockets get tight.  Those whose pockets were not necessarily impacted as much had a good dose of F.U.D., aka Fear, Uncertainty, and Doubt!  With so much drama in business, finance, and housing, it is no wonder most people were scared.  No one knew how long things would be bad for, and people had no choice but to adapt.

I am in Washington, D.C., and have always worked in the higher price point market.  We do tend to be somewhat insulated from economic shock; however, we were not immune.  First and foremost, my teaching and recruiting gigs were the first things to get cut.  Bigger brands may not cancel paying their educators, but trips that require airfare and hotels might get a second looking.  The real hurt was what happened in the salon.  People wanted to lower their maintenance.  Blondes wanted to be brunettes, so they could come in less and spend less when they did.  Some even went brunette with you so they could start doing their hair at home.  I personally experienced clients adding 1-3 weeks in between visits!

This might not sound like a big deal, but if you are fortunate enough to have a clientele who is able to weather the storm better than others, it is massive.  My clientele averaged 1 visit per 8 weeks, or around 6-7 visits per year.  When you push an 8-week interval to 10 weeks, you lose, at minimum, 1 whole visit per year!  If your client averages every 6 weeks, that is 8-9 visits per year.  When you push a 6-week interval to 8 weeks, you lose closer to 2 whole visits per year!  When you estimate that 15-20% of people go somewhere cheaper and the other 80% of people come in 15-25% less frequently, that translates to a loss of as high as 40% of your revenue!

Yes, this is massive!  If you are experiencing anger or F.U.D. while you are reading this, that is okay!  We made it through the last one; we can make it through the next one…I believe in us!

Okay, so how do we do that?!  Well, the first thing you need to do is to be woke to macroeconomics.  The last thing you want to do is be one of those people who refuses to talk about and learn about what a recession is.  Keeping your head in the sand is no way to run a business.  Now, whether you were a stylist or business owner during the last recession, we are on the same page.  A recession poses a serious threat, and we should always be prepared!

What if it never comes? What if there are no layoffs? What if people do not get hurt by the economic downturn?  Then, GREAT!  I like to be prepared for things, especially this.  Understanding that revenue and income going down is not your fault is a good thing.  This way, when you get gripped by F.U.D. you can change that into a trigger to remember this story.  Once you are triggered, you can get to work on your business in a whole new way!  The reality is that most people get lazy in the good times and do not work as hard.  This is a great time to lean into marketing, social media content creation, taking free classes, and doing research on new technology that can lower costs (ie automation and alternative products).  

I do not know about you, but we are having a meeting on the first of February to talk about how we can enhance the customer experience, when/how/if we should raise our prices and a revamped marketing plan!...

Take inventory of the customer’s experience, send out surveys to get feedback, identify weaknesses, and talk about opportunities!

We are getting ready, making our plan, and will be in the execution phase in a matter of days!  What can/are you doing to prepare and grow?

Nothing I write should be mistaken for financial, legal, or tax advice.  Business & Investing carry risk, and contacting the appropriate licensed or certified specialist is advised if you need that sort of advice. I am a business consultant, advisor, and coach.  I can provide you with tools, resources, and provide instruction on implementation of tools, use of resources, and share my experiences as well as that of those I have interviewed.

Robert, a 20-year veteran, has worked passionately, for the bulk of his career to empower stylists, democratize the industry, and shift the power dynamic to be more equitable for the hairdresser.