Diversify to succeed

It’s important to identity creative ways to diversify your revenue streams during tough times and beyond, explains salon business expert Liz McKeon

When the Covid-19 pandemic forced many businesses into lockdown, salon owners, managers and teams had to get very creative with modifying operations in order to bring in revenue. Finding new revenue streams is a must to keep your business afloat in difficult times such as these.

Diversification occurs when a business develops a new product or service, or expands into a new market. Often, businesses diversify to manage risk by minimising potential harm to the salon business during economic upheavals.

The basic idea is to expand into a business activity that doesn’t negatively react to the same economic downturns as your current business activity. So, if one of your revenue streams is taking a hit, one of your other divisions will help offset the losses and keep the business viable. An example of this would be moving to a virtual retail service during lockdown.

Salons can also use diversification as a growth strategy.

Diversification can happen without spending more money, or having to hire extra staff, because it can be more about using wasted resources than investing into the salon. It can either help you tap into exciting new markets to take advantage of high-potential growth, or it can simply fill a niche that satisfies your existing client base. Both ends of this approach will help you grow the salon with very little added investment or expenses. The following list includes some tips on how to be creative about diversifying your business’s cashflow.

1 Put yourself in your ideal client’s frame of mind. When considering adding new revenue streams, products or services,start by focusing on your ideal client and what it is that they need most right now.

For example, ask yourself what your client’s day looks like, or what worries keep them up at night. Next, ask yourself how you can make their lives easier or take away those fears. Build your salon around serving the clients you love and you can never go wrong.

2 Promote your unique selling point. The salon industry is a very competitive battleground, so make sure to stand out from the crowd by articulating exactly what you do and why you do it. Keep on brand and always think outside the box.

3 Reinvent yourself and your salon. What do you sell that can be promoted in a new way or can be used in a different way? Focus on products, people, equipment, brands and space.

4 Make it an internal challenge. You can’t do it all on your own, all of the time. Set up an ‘internal challenge’, and ask every member of your team to come up with at least three ideas of how the salon could maximise its current strengths, such as database, brands, opening hours, occupancy, team skills, loyalty schemes, location, neighbouring businesses, reviews, website, social media platforms and reputation.

5 Revisit opportunities you’ve previously shied away from. Optimising current revenue streams always requires focus, and sometimes outside assistance. Now is the time to explore all opportunities to safeguard your business going forward.

6 Think about both short-term and long-term planning. In an everchanging economic landscape, it is important to always consider the challenges and solutions for now and in the future. Difficult times often lead to changes in the way the world operates. Develop products and services that not only solve today’s challenges, but will help you going forward to thrive in the new, post-Covid world.

7 Revisit your customer service journey. You must send out a very clear message that your salon is here to stay, and you are great at what you do.

Providing outstanding customer service is the key to positively differentiating your salon from your competitors.