The Modern Salon Owner’s Guide to Thriving in an Economic Downturn .

By Louise May

As a beauty business owner of Temple Skincare & Spa in the Sydney Hills District for 23 years, Rene Herald understands firsthand the unique pressures salon and clinic owners face daily. Whether it’s dealing with staff shortages, managing cash flow, or simply keeping clients happy. The beauty industry is no walk in the park! However, with the right tools and mindset, these challenges can be turned into opportunities despite what Forbes calls the economy as, “especially fraught,” but that “growth is still positive.”

Alongside running a multi-awarded spa for many years, Rene has a mentoring business for fellow salon and spa owners, Business Beyond Beauty. Being in the beauty industry for over 30 years and running the spa for 23 years has taught her valuable lessons that she is also privileged to share with younger salon entrepreneurs and startups. Here, Rene shares practical strategies that have helped her and can help fellow salon owners not just survive but thrive, particularly in our dynamic and sometimes volatile market.

Editor of Beauty Biz – Louise May chats with Rene Herald about her growth strategies.

How do you tackle recruiting with the issue of staff shortages in the industry?

If you’re anything like me, you’ve likely struggled to find and keep quality staff in recent years. This isn’t just a Sydney problem; it’s happening across the globe. One of the best strategies I’ve found to manage this is thinking outside the box when recruiting. Start looking beyond traditional hiring channels. Reach out to talented beauty professionals on social media like Instagram and showcase your salon’s unique culture to attract them. People want to work somewhere they feel inspired and valued.

Don’t overlook the potential of apprentices. I’ve taken on matureaged apprentices who may require more training initially but are often more loyal and reliable in the long run. And if you’re really stretched, consider sponsoring international talent when we land the skills list again. Investing in your people is an investment in your business, so fostering a positive work environment and offering continuous training to develop and motivate your team can reduce turnover.

Hiring new staff can be a costly experience, so I suggest you have systems in place to streamline the process and at the same time, foster a great starting foundation for the new team members. Such systems I suggest as imperative would be a strong interview and induction process. Be patient and hire the ‘Right’ person not just ‘A’ person. Make sure your ad copy appeals to the person you need to hire. Explain the benefits and perks of working within your team and what’s in it for them, and also explain clearly your expectations in return to ensure alignment from the beginning.

Industry recruiters such as National Salon & Spa Recruiters can make this process easier if you are time poor. Please Please Please check references! As salon and spa owners we only want what’s best for each other, so to avoid finding out the hard way, I suggest you check references on all applicants.

Then when you have found your gem, start the induction process strong to inspire and excite them about their decision to join your team. Have the induction process mapped out and scheduled as we all know how busy things get in spa, and sometimes this can be pushed aside however its vital to the longevity of your team members. I have an induction checklist that begins with onboarding the essentials such as contracts and system setting up, to induction into the business philosophy and of course treatment protocols.

Set the foundation strong to increase your chances of retaining team members. Things you can do are: Send them a Welcome gift to make them feel warm and welcome to their new team. Book them for a few free treatments for them to experience your unique way. Before their first day, send them a personal affirmation message to let them know you are excited for them to start. It may have been a number of weeks between hiring the new team member and their start date, so break the ice and keep them excited about their choice to join you. Schedule an induction session with either yourself, or your manager to engrain the culture and values of the business, alongside the mutual expectations you have. Buddy them up with another team member to create a supportive environment. Explain the training process so they do not feel overwhelmed, and then schedule all their practical training sessions.

A little tip, any training that you repeat for any future new team members can be recorded and loaded in your online Policy & Procedure training portal for them to watch to save time and costs in the hiring and training process.

At Temple Skincare & Spa, we have various staff incentives for reaching their monthly and quarterly KPIs. Not only does this encourage friendly competition, but also, by making the goals fun to achieve, the girls really get into it. It’s a win-win situation as the clients are getting the real results they deserve and a wholistic prescription to their needs, the salon business is growing, and the girls are reaping the rewards and feeling valued. KPIs, we track are retail, rebooking, frequency of visit, upgrades, Program sales, utilisation, client reviews and we even reward them for remaining healthy and not taking sick days.

We also put a huge emphasis on training, not only in skills, but in team building so that each staff member feels supported and understands deeply that the business is much bigger than us. We focus on the impacts of what we do to each client’s life. Very often we talk about how a frazzled client comes in from a hectic day and that we have the privilege to bring a positive change to them as they emerge relaxed, healthier and rested from a session with us. Also, we discuss that we have a role to play in our community via our Temple Hearts charity program, where we help local youth sports clubs, breast cancer support organisations and even domestic violence shelters.

From the very start during staff orientations, we clearly discuss these aspects of the business and make their roles more purposeful and meaningful.

What are your strategies around managing finances?

Managing finances can be a daunting task, especially for smaller salons or startups. It’s easy to get overwhelmed by cash flow issues, fluctuating client numbers, and rising costs. That’s where financial management software comes in. Tools like Fresha or GlossGenius, have been game changers for small business. These platforms not only track appointments and sales but also help with budgeting and inventory control. There are many other helpful apps however, for more robust features and consolidated CRM + Marketing functionalities, we use Phorest at Temple Skincare & Spa as we find it integrates well with our other Lead Generation systems and accounting software’s.

Additionally, consider diversifying your revenue streams by offering retail products, subscriptions or exclusive service packages. Loyalty programs are another simple way to encourage repeat clients. Even small changes—like offering a product with every high-end service—can make a big difference in your bottom line.

In a salon team, not all therapists might be great at prescribing retail and that dirty word “selling”. However, this is where we as business owners can intervene through providing staff sales skills training, and customer service training, not just training in massage or dermal treatment techniques. ‘Selling’... I hate that word but let’s be real, it’s part of our job… selling is an art, and not all therapists have the personality type to handle this art well, so training is vital. Training in the way to build rapid rapport with our clients is important, training in prescribing skincare and treatment programs is important and training in how to overcome objections during their process is important.

Customer service also plays a huge role in creating a loyal customer base who will not just serve as evergreen income, but also advocates for your spa or salon. Never underestimate the power of word-of-mouth referrals especially with social media platforms.

As an entrepreneur, there must be systems in place to help you and your team come together in hitting revenue goals as well. It never pays to run a business by default.

Can you tell us about your Client Management?

The days of managing appointments on paper are long gone. If you’re still relying on outdated methods, it’s time to upgrade to an online booking system. This gives you more time to focus on your clients rather than administrative tasks.

Retaining clients also means investing in educating team members on how to create trusting and favourable relationships with them, maintaining strong rapport. This means that the team’s skill should be on point, the care for customers palpable and for the team, a clearly communicated set of actions on how to keep high standards of customer service.

Being consistent with your customer service standard is imperative as clients like to trust in the brand you have created, hence trust that they will have that same standard of service you are known to deliver, each and every visit, consistently. Ensure you have a way to measure this. Measuring KPIs are important to business growth, however measuring customer service standards and consistency is important to business longevity!

With AI also fast dominating many aspects of business, we all have to put aside any reservations we might have about this and see it as an innovation, a tool that can be used for growing your salon. For instance, there is at least one simple thing that every salon owner can do to utilise AI for business. Setting up a chatbot for customer service on your website is a must. Often times we lose customers from merely being unable to get back to them fast enough if they reach out with a query.

With Reception operation only several hours in a day, but with clients wanting to engage with businesses nowadays at all hours of the day, it can be tough acquiring more bookings. Automating a bot to respond to commonly asked questions like salon schedules, location, contact information and even adding your online booking system button in the bot conversation is a doable way to use AI to your advantage. Utilising AI to save money on designing beautiful graphics for your business is a way to keep running costs low. You can even use AI to create great email content to engage with your clients and SEO driven posts.

These may sound intimidating (and expensive!) at first, but totally worth the time and effort. The end goal here is to future-proof your salon and adapt to changing economic climates and clientele.

Do you have any final thoughts?

Owning a salon, clinic or spa isn’t just about providing great services; if you want to have a successful and sustainable beauty business that withstands the test of time and longevity in our industry, it’s about running a tight business. Let’s face it, when we become therapists, we spend all our time and effort mastering our craft, the business side of things was not the first thing we think about, however it is crucial to master if you wish to create a business that doesn’t just survive in the face of challenges—but flourishes. The beauty industry is constantly evolving, and as salon & spa owners, we need to evolve with it and pivot swiftly when needed... (FYI, hate that word ‘pivot’ after Covid lol)

If you need more help with these or other aspects of your salon business, whether you are small or large, join Rene on a guided 42-Point Audit to see if you are “Green and Growing”, or “Ripe and Rotting” and level up your salon systems and management to greater heights you did not think possible.

Contact rene@businessbeyondbeauty.com to start on your journey of change.