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Three Steps to Survive a Coronavirus Shutdown


Three steps to survive a Coronavirus shutdown:

(Well actually 4, I’ve decided to throw this one in before we even start!):

Try to stop panicking - I understand, of course I do - the economic knock on from this is affecting all of us, let alone the concerns we share for vulnerable members of our family etc. 

However, one thing I try to live by as much as possible, is to make sure I don’t worry about things I can’t control - with all the news of people dying etc. coming out every day, it’s scary, however, first of all, try to keep a perspective - unless you are an ‘at risk’ individual then the odds (based on what has been learnt so far in China and Italy) are that you are going to be OK. Unfortunately, of course, people are dying, but I truly believe the government should release those figures as a % of the people who are dying every day from all causes. 

“Another 10 people died in the UK today from Coronavirus” is a scary headline - however if it was announced as “Of the 1500 people (the average amount of people who die every day in the UK) who died today - 10 were because of the Coronavirus - 0.6%”, it doesn’t sound so scary. 

Obviously it’s still tragic (which the deaths of all of the other 1500 people are too of course) and we should care deeply about it and be doing everything possible to reduce that figure - I’m just saying it helps to have a clear mind (which is very hard if it’s in panic mode) - and boy do we need clear minds right now! 

So try to keep a perspective and let’s focus on action that we can take rather than the paralysis that comes with panic and fear.

So what can you control? Well I’m not here to give out the same advice we are being given from all sources - wash hands - stay away from ‘at risk’ people etc. My job is to help you focus on what you CAN do to help minimise the risk to your business.

So, I call this my ‘Safety Net Strategy’:

This is what I do when a salon owner is worried about stylists leaving and the impact it will have on the business - and therefore isn’t managing them with any strength, in case the stylists leave and the salon loses their sales! 

So, obviously a different scenario, but actually quite similar in a way.

The ‘Safety Net Strategy’ is based on a ‘what if’ - what if the worst thing happened and that by toughening up on standards etc., the whole team walked out (probably wouldn't happen of course - but in my experience it’s the fear of it happening that stops people managing their business properly). Let’s apply that same strategy to what we are all facing right now.

First of all, I work out how the business would survive if that were to actually happen (i.e. all staff walk out) and create a plan - a worst way plan. I know it sounds negative but it’s actually to build confidence. That plan may never have to be implemented, but knowing you have it, allows you to take control with the confidence that you can survive the worst case scenario - I always point out that it wouldn’t  be easy - of course it won’t - but, at least you have a plan!!

So, I’ve put these 3 steps together based on a worst way scenario; that you may have to close for a period of time, either through Self Isolation or from Government restrictions. The plan is still relevant of course, even if you aren’t closing your salon completely but are being affected dramatically, or just want a contingency plan in case.

STEP 1 - RUTHLESS BUDGETING
STEP 2 - FINANCIAL SOLUTIONS
STEP 3 - PREPARE FOR THE FUTURE

STEP 1:  RUTHLESS BUDGETING

Time for a ruthless financial assessment and budget. Go through your outgoings in detail and identify what can be deferred if needed until we have a clearer idea of the future. 

Your individual cash situation will determine how ruthless you need to be of course, however I would suggest that you prioritise small/medium business over large corporations and Government as they will be in a similar space to yourself and the more we help each other the better we will all be when this is over. The boutique product manufacturer, local or even national distributor will be having a tougher time than the L’Oreal’s and Wella’s etc. So support local and small/medium sized business if you can... 

I suggest that you draw up 4 lists:

  1. Not going to pay for now
  2. Won’t have to pay if I’m not open
  3. Will try to pay if I can
  4. Have to pay whatever

The lists will obviously be specific and dependent on you and your situation, but here are some guidelines:

LIST 1:

  • Anything due to the government - taxes etc. - it will all be sorted out after - won’t be easy but the government will have to be helpful both during and after this with help to pay etc.
  • Business rates - same advice - in fact as I write this a 12 month holiday has just been granted in the UK
  • Corporate/Insurance company type landlord (private landlord should be in list 3)
  • Corporate multi national product company (especially ones owned by larger corps) - L’Oreal, Wella, Schwarzkopf, Goldwell, TIGI etc. Yes of course they will also take a hit from this but not only are their balance sheets able to withstand it a lot better than smaller companies, but they will also probably benefit from increased online purchasing!
  • Mortgage or Loan payments - You should be able to get a payment holiday in these extreme circumstances

To be clear - I’m not talking about just randomly not paying people or trying to get away with not paying, that would clearly be unethical and poor business practice - I’m simply saying, that if you don't have the money due to this crisis - you have to have some way to prioritise who does get paid. 

Plus - this is just a plan - I’m not saying this is what you do, just what you might have to do if... The whole idea is to give you the confidence that you will survive a worst case scenario - one way or another.

LIST 2:

  • Utility bills - Although I don’t believe this would happen - what’s the worst thing a Utility company can do - turn you off! Well if you are closed anyway... Clearly you want to avoid that, and I don’t believe that would happen, as if it did then we would all be living in some type of horror disaster movie (don’t expect a step by step Zombie survival post from me if that happens haha)
  • Commission
  • Future stock orders - inc refreshments etc.
  • Laundry
    There will be more here possibly, but you get the idea...

 

LIST 3:

  • As discussed, local suppliers, important ongoing relationships etc.
  • Wages - hmm - tough one this, but the government putting in place a 2 week Statutory Sick Pay will help and I believe we will see more measures to come in helping business with staff costs. However, you may need some frank discussions with individual team members on what they NEED to get through this (bear in mind, some of the advice I’m giving here is relevant to personal expenditure too). Reassure them that by taking the right steps, you WILL come out the other side of this and anything that is owed to them will be paid, albeit spread over a few weeks possibly. If viewed as a way to save some money, it could even be a positive for some people.
  • Authentically, as much as I would like to only put ourselves into list 4 (must pay) haha - education and marketing costs may be in both this list 3 and list 4 - as I will discuss later, this is an opportunity for you to take some time and grow your business for the future, but if you literally don’t have any money to pay for it then it has to go into list 3 - ‘Will try to pay if I can’. 

LIST 4:

  • Insurance - although your insurance may not cover Coronavirus, we still don’t know what the fallout will be and I would strongly suggest you keep this up especially as they often use missed payments to cancel your cover.
  • Phones
  • Internet/broadband
  • Salon Software (that data is your business)
  • Education & Marketing - as previously mentioned - if possible
    - Although this is a different situation - research into past recessions has shown that the businesses who continued to invest in marketing and education, were in a better state to capitalise on the boom that will follow. Although this situation will probably thrust the world back into recession, I strongly believe that ‘feel good’ industries like ours will see a business boom once this all dies down - admittedly some will argue that may be short term, but if that's the case then it makes it even more important to be ready!
  • Key personnel salaries or a % of their salary after discussion with them (Yes of course wages have popped up in 3 of the 4 lists - this is where you will be doing the most juggling)

Okay - now - the critical bit; for lists 1,2 and 3; YOU MUST BE IN CONTACT WITH EVERYONE - don’t just put your head in the sand and assume they will understand - they are more likely to understand and be helpful if you communicate with them - please, please, please take that advice on or this won’t have a chance of working! Even if they are not being helpful, at least they can’t say you didn’t advise them of any difficulties.

As tough as this may sound, try to keep a positive focus - this is not about ego or pride it's about survival and the simple rule is; if you can’t pay - you can’t pay! Just to be clear, we’re not talking about taking advantage of the situation - just the simple fact that if there isn’t any money to pay your rent for example, then no amount of stress or sleepless nights will change that - only negotiaton with your landlord will solve it.

Okay, once you’ve drawn up those lists, you will have a better understanding of your exposure - how much you need to cover per week/month to stay in business short term. This is critical to STEP 2 as you won’t get support without having the right figures and projections in place...

STEP 2: FINANCIAL SOLUTIONS

So from STEP 1, you will see what income you need to achieve as a minimum, to stay ahead of the game! Now let’s look at what possible solutions you may have:

  1. Stay open (unless or until it’s a legal requirement to close). Find out which staff are happy to do so - you will probably have to respect the wishes of anyone who doesn’t want to work. By hook or by crook find a thermometer - some female team members may have a basal one (used for measuring ovulation) which will work fine. Obviously sterilize it but make sure all team members are tested every day and sent home if there are any signs of a fever (the most important indication that you may have the virus). Suggest clients do the same and not to attend their appointment if they think they may be infected - after all, it’s in their interest that you stay open. Communicate - tell your clients the steps you are taking incl. cleanliness etc.
  2. Consider home visits for certain clients - obviously not ‘at risk’ clients.
  3. Is this the time to focus on that online shop you’ve always been thinking about but not doing anything about? To be fair, it’s probably not going to generate huge income for you unless you are already established - but now is the perfect time to start and who knows, maybe it flies!!
  4. If it’s staffing shortages that might mean you may have to close, consider reaching out to self employed/freelance stylists who may be interested in doing a day or two in the salon as I’m fairly sure they may be suffering at the moment - a possible connection could be the Freelance Hairdressers Association https://thefha.org.uk/ This is a time to put differences aside!
  5. Speak to your product company - in fairness this would depend on your value to them, however they may be able to help with some sort of bridging loan.
  6. The UK Government is rolling out a loan guarantee scheme called the Coronavirus Business Interruption Loan - we don’t know yet how to apply or what the qualification will be but you should be seeing more of that as we speak. However - they will still look at your business in the same way - you will have to show them your current business plan as well as your future plans - just because the government is making it easier for them to take a risk on you, it would be negligent of them to hand out money to people just ”because I need it!” Create a solid plan now and then approach your bank. BTW - if you have an otherwise solid business then be prepared to look at other banks if you aren’t getting any joy!
  7. There are already some other Government measures being introduced and frankly I expect to see more - cash grants to help with rental payments etc. and business rates holiday etc. The message from the UK Government currently is “we will do what we have to do” - this gives me some confidence and I hope it does for you too - as it’s a lack of confidence that will kill us. We need to be confident we can get through this - but also get through it in good shape!
  8. Finally, a last resort - you may have some wealthier clients who might be interested in helping you somehow - come up with an idea that you can pre sell them - for example a 5 year salon membership allowing free hair and products etc. - clearly don’t do too many like that though haha, but 10 of those at say 3,500 (average female spend in UK is £750 per year on hair - incl. products) might just help to get you through this!

STEP 3: PREPARE THE FUTURE

Okay - that was all a bit depressing wasn’t it - but unfortunately necessary. However, can you see that by working through STEP 1 - your worst way scenario - your safety net strategy, it gives you the confidence to look positively forward at what you can do to make sure you don’t need it. Remember I told you that I use this when someone is scared that stylists are going to leave the salon - having the confidence that even if they do, it will be OK - going through this process, allows them to take proper control over their business and move forward - that’s all I’m trying to do for you here.

Okay, now let’s be more positive and look at what you can do with the extra time you may have. After all - the biggest excuse I get from people who aren’t taking action on the things they need to is - “I don’t have the time”

Here is a list of some of the things you could be doing:

  1. Online business education - I know a great company for this ;)  
  2. Online hair education - is this time you can use to be more aware of what is being offered out there to educate yourself and your team - HDTV by Vivienne Mackinder would be a great place to start - amazing resource https://www.hairdesignertv.com/ plus what about all those great ‘How To Cut It’ podcasts you keep promising yourself to catch up on.
  3. Your own personal development - TED talks, personal development learning - book/online/video etc. Use the work you do in point No.5 to focus your learning in the right areas - if you feel you need to improve your online presence but don’t know how - this is the time to learn.
  4. Take some time to focus on yourself - goals - meditation - fitness and health, maybe learn a new skill, etc.
  5. Move past the difficult present (you have done all you can for now) and start focusing on the future plan for your business. I know it’s not easy - but this will all be a distant memory at some point - so let’s use this time to create a dynamic and revolutionary plan for success with your business. Be creative - think revolutionary - embrace change/technology/online etc. and most of all make sure you are financially independent by creating a plan that ensures your business is providing the profit you desire in the future.
  6. Mentioned this in STEP 2 but is this the time to set up your online shop if you haven’t done so already - there are many ways to do this and I would suggest that it should be a part of your learning in this time, but probably the simplest way to start is with a Facebook shop - at the very least you should be looking into it - maybe you could start selling loo roll online haha!
  7. For those of you that aren’t active online - and that's more than you might think as so many people think they are rocking social media etc., but they actually aren’t - this is once again a great opportunity - why? - because you have some time and even more importantly - so does your audience - this is the perfect time to start building a community - there is so much to learn and understand here, but for now, let me share the golden rule that so many people aren't understanding:

CONTENT - CONTENT - CONTENT

People want content - not the back of someone's head or yet another pic of perfect nails. They are looking online for help and advice - hair and beauty Youtube channels are getting millions of views and most of them are crap - so why are they getting the views? - because people want advice - but we professionals aren’t giving it! Let’s use this time to regain the space that should be ours but isn't - because we let amateurs in their bedroom take over the space. Learn, be brave and create some great content that is useful to your client - this way you are not only staying connected to your clientele in these challenging times and keeping them loyal, but you are also developing a new opportunity for your future, as you start to experiment and understand the new way that business communicates today.

That’s just a few ideas - there is so much you could be doing to use this time productively - reviewing or creating standards in your business, working on a financial plan for your business - a marketing plan etc. All I will say, is that if you are forced to close your business for a period of time or to self isolate - then use that time well and you might just look back and see it as a blessing in disguise - who knows!

Phew - that was a lot of work - I hope it helps a bit. I’m not daft, I know it will take more than just a long post from me to make a difference in these crazy times, but hopefully it helps a bit!

It will be tough - of course, but coming out the other side will be just as tough and it’s essential that you use this time to prepare your business for the future.

I hope this has been of some help to refocus your mind from panic to practical.

Alan x

This article is based on the opinions and experience of the author, Alan Austin-Smith and should not be seen as representing any official or legal position.

Due to the current situation, Alan is creating a 'TIME TO ACT' series of videos on our 'Grow your Salon Business' Facebook Group - JOIN HERE for solid, free business support!

 

 

 

 

 

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