Kin Connect News

Salon Financial Management

Costs are going up, are you keeping up?

Prices are going up in so many areas and we must be careful that we don’t keep absorbing the costs. Each time we are charged more, we have a choose to either make less profit or we must pass that cost on. In an industry where profit margins have been decreasing for some years, we need to get real about pricing!

Today I started to shop around for my salon’s electricity cost as my 24-month contract is coming to an end, it could not have been a worst time for my contract to end. I expect many of you will be in this situation soon.

I normally set a 12 or 24 month contract with a caped price depending on the deal I am offered, I knew it was going to be high but I was not expect this much. The best deal I have been offered so far is a 36 month contract at 70% higher than my last contract, big shock, I have still not decided if I am going to go with the 36 month contract or go for a shorter contract and pay a bit more hoping that in a year’s time the prices may come down, (even the experts don’t know what to advice) I will spend tomorrow on the phone trying to get a better deal.

Sadly, this was not the biggest shock, as I was expecting the increase. SSE who I am currently with offered the best deal, however also asked for a security deposit in advance, that is a mandatory payment due to our business sector being high risk to them as a company, they asked for 1 years estimated bill up front before they will even agree the contract!

This is unheard of in the past from utility companies, but like many suppliers no more credit is being offered and payment upfront is becoming a thing of the future. Scary!

Thing are changing and we need to change fast to keep up with it.

Knowing your business and your financial position is more important now than ever, financial forecasting is something every salon owner should do, if you do, or don’t do your own financials, forecasting is never as hard as people think. We also need to take some time out of our salons to plan. I am running a Financial Management & Cashflow forecasting workshop on Monday 22nd November 2021 at Wonderful life in Portsmouth.

To book EMAIL our team or call us for more information on 07711 567703