In today’s ever-changing business landscape, salon businesses struggle to remain open in a post-Covid era. Even as economies across the world have stabilized and salon clients have returned, the pattern of businesses closing continues to be a worrying trend. Booksy has seen an average of 150-200 small businesses per month nationally closing their doors due to the unpredictable climate.
While some businesses close for unavoidable reasons like career change, transitioning to booth renting, or taking a break from the industry, how do we account for the others that are forced to leave due to economic constraints, inability to progress, and more?
Often, the root of the problem is that these business owners simply needed more adequate support in the first place. They followed their passion or a family member or mentor into the industry, and didn’t have the luxury of planning out the big picture before diving into business ownership. The unseen challenges of entrepreneurship – administrative load, financial planning, competitive local markets, and marketing – can overwhelm even the most savvy professional. And this lived experience is supported by data.
A recent study by Guidant Financial reveals a paradox within the small business community. Half of the surveyed small business owners were confident about their financial resources and felt they had enough money to keep their businesses afloat. However, a staggering 29% also reported facing the harsh reality of failure due to financial uncertainty. This concern is even more highlighted among BIPOC communities. A 2020 study by the Federal Reserve revealed that BIPOC business owners reported a higher credit risk than white business owners.
That said, these challenging statistics also present an opportunity. It is increasingly evident that more information and resources are the best tools to improve outcomes for salons and barbershops, BIPOC business owners, and small businesses in general. Entrepreneurs have skills, passion, and an abundance of ideas. What they need is easy access to tools to help them grow and scale their business in a financially sustainable way.
Closing the Gap Between Financial Perception & Reality
When it comes to helping business owners strive to succeed with limited financial resources, we must first ask: What is the key information that business owners should know to maintain a financially successful business?
No two business owners are alike – so the exact resources they need and want will vary by experience level, demographic, industry, and many other factors. However, there are a few common threads and important themes that apply to small business owners across the board.
We often ask: How much money should a business owner have in the bank? Are they optimizing technology to simplify their operations? Do they know or work to improve their credit score? Do they have the knowledge and skills to grow and scale if they are working at capacity?
To ensure small business owners can tackle this head-on, they must have access to technology and information to promote success. This in turn reduces barriers to upward mobility that so many of these entrepreneurs face. Taking the administrative load of running their business off their shoulders can help provide a safe space to prioritize financial stability and focus on their goals – whether that’s sustaining where they are or reaching for more. Booksy has embodied this approach in order to help push entrepreneurs forward.
For us, the pillars of success are both our product and our community. On our mobile-first app, essential features are accessible, easy to set up and use, and require no additional investment. Moreover, when a business owner joins Booksy, they don’t just get an app to manage their business – they also gain access to a global community of entrepreneurs just like them. We bring them together through local events, continued education, and networking opportunities. Staying close to our community ensures that we are listening, and offering them what they need – not what we think they need. This also means that small business owners can navigate challenges with a community behind them, instead of going it alone.
Propelling The Success of Today’s Entrepreneurs For Future Generations
Both in the US and worldwide, so many factors impact whether an entrepreneur can achieve financial freedom – social policy, governments, education systems, just to name a few. Although we can’t change the workings of these systems, we can all play a role in helping level the playing field.
Giving all business owners the tools, information, and resources to overcome the most challenging first few years of their career is essential for helping them thrive long term. Once a point of stability is met, it becomes much easier to bounce back from setbacks and stay resilient despite challenging external factors. And, it not only benefits them, but it also helps lift up future generations in a variety of ways, by providing:
- Positive community impact: A community with a strong entrepreneurial base is self-sufficient, connected, and economically resilient. This is the perfect foundation for future generations to take over a family business or start their own.
- Inspiration: When they have role models in their own neighborhoods, young people are encouraged to take innovative approaches to their own careers. They can follow their passion, instead of taking the “safe” route.
- Diversity: When business leaders actually reflect the local community, future generations feel empowered to step into the same roles themselves.
- Education and training: It’s much easier to nurture the next generation of business leaders when they have access to knowledge and resources within their own community, with teachers and mentors they can relate to.
Small business owners – especially those who are parents or have family businesses, are acutely aware of the generational impact of their work. They know that the right choices and smart investments today can set the stage for a more secure future for later generations.
It goes without saying that with financial stability comes the freedom to innovate, experiment, and nurture a new wave of entrepreneurs. As small business owners work to navigate the unexpected challenges that come with the nature of an evolving business landscape, having a community and access to the resources that enable this feat is paramount. Thankfully, this no longer has to be out of reach to small business owners. Regardless of any macroeconomic shifts, there are a few simple tips we can utilize to ensure that small business owners have equitable access to key information to make informed decisions. As leaders in the beauty booking and business tech space, we hope to continue our efforts in supporting small business owners to build capacity for themselves, their families, and their communities for generations to come.
Ulrico Talamanca is the Interim US General Manager at Booksy.