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Counteract Economic Uncertainty

Victoria L. Rayner January 2007 issue of Skin Inc. magazine

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During World War II, the American government ordered a 20% curtailment in cosmetic and nylon manufacturing to support the war effort. However, the beauty industry quickly counteracted these federally mandated sanctions that had the potential to cost them millions of dollars in lost revenues. Industry professionals very cleverly stepped up the promotion of lipstick, as well as leg makeup, and labeled their business-driving strategy a “wartime morale-booster.” Not only did these top cosmetic executives avert a financial catastrophe, they created a solution that served to rally support and filled women from coast-to-coast with an enormous sense of national pride.

Women who lived through this period, many of whom are now in their mid-80s or older, still maintain that drawing artificial nylon seams down the backs of their legs with grease lead cosmetic pencils in an attempt to replicate the appearance of nylon stocking seams was the least they felt they could do to show their support during wartime.

Borrowing trouble?

Although most people would rather not acknowledge it, history does have a way of repeating itself. What inevitable or unpredictable changes in the economy are in store for skin care professionals? If a sudden event were to occur and the result was a financial backlash that affected our livelihood, would today’s spa industry be as prepared to put another spin on it? Could it muster up the ingenuity to devise comparable solutions and perhaps even latch onto less obvious opportunities?

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Fifteen Intangible Business and Career Drivers

Following are 15 intangible business and career drivers to consider if your spa is economically disadvantaged.

1. Be alert to the early symptoms of a recessed economy—reported drops in the real estate and stock market are telling, so don’t ignore these economic indicators. Early identification of these signals allows for reasonable time to make the necessary adjustments and to reposition yourself properly in the marketplace.

2. Vow to avoid the denial phase that many professionals fall prey to in the beginning of an economic spiral. Face up to the fact that profits will decline. Start brainstorming immediately, and devise counteractive strategies with other allied providers in order to soften the blow.

3. Establish a special fund into which you can tap.

4. Anticipate unexpected wholesale price hikes or other increases that will naturally befall your business if fuel prices soar.

5. Remove yourself from a financially vulnerable work situation. Have a well-planned, surefire escape route in mind in case all attempts to revise your enterprise or reclaim your lost clientele fail to pull you out of an economic tailspin.

6. Be prepared to supplement your income with other pre-established streams of revenue.

7. Always operate at peak-performance level—there always is a shortage of and an insatiable demand for A-list performers, regardless of how scarce jobs or business opportunities appear to be.

8. Diversify your skill set so that you are a more versatile professional. Think generalist, rather than specialist, for more employment and business options during tough financial times.

9. Heed the firsthand advice of survivors whose vivid accounts are laced with wisdom. Listen to their stories of how they were able to weather financial catastrophes. What they have to relate is worth knowing, legendary and an inspiration.

10. Decide on reversal strategies carefully, use common sense and think through every strategy considered by meticulously planning it out, step-by-step, on paper.

11. Target and gain the favor of affluent clients whose socioeconomic status is less likely to be affected by a weakened economy.

12. Think about where you could find your clients supplementing your services if there were to be a sharp decline in the economy because of some unimaginable event. In a crisis, perhaps you, too, should be there!

13. Always try to maintain the lowest possible debt ratio in order to be the least affected by the inevitable decrease in income that accompanies an economic downturn.

14. Devise a budget-forecasting plan that will allow for a sizable decrease in operating expenses. If the need arises, put it into place as a countermeasure.

15. Do not back down from the challenge of working through tough times, even if you experience feelings of helplessness. Be committed to reversing your financial situation, regardless of external circumstances.

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