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Surviving the Economic Crisis

By: Cathy Christensen
Posted: January 7, 2009, from the January 2009 issue of Skin Inc. magazine.

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But Friedman isn’t giving up. Instead, she is taking this time to provide more personalized attention to clients and cut out the excesses. “It’s time to recoup everything and start thinking and improving. My employees have more responsibility now. I told them that if they can’t change, we can’t be in business. You cannot run a business now like you did before,” she says. To keep hers on track, Friedman is analyzing her entire spa, minimizing expenses and looking more closely at the budget. She’s also refocusing on her customers. “First, clients get an intense consultation. We can offer more personalized attention to old and new clients because we have more time,” she explains.

And Michigan isn’t the only state in the union feeling the stress of the economy. The 10,000-square-foot Changes Salon and Spa in Walnut Creek, California, is making modifications in anticipation of a situation that promises to continue well into the new year. “Fortunately, we are running just a little above last year, but we are getting hardest hit in the spa right now, mostly in massage,” says Bonnie Waters, founder of the 24-year-old business that currently has 65 employees. “We’re not seeing many prebookings in esthetic rooms, especially for facials.”

Waters hasn’t survived in business for 24 years without knowing a thing or two about tightening her belt. “We all need to plan to hang tight for the next 9–12 months. We will batten down the hatches and focus on what we’ve been focusing on all these years, and create a value-added experience for clients,” she says. Changes just went through an expansion at the end of 2007 and beginning of 2008 that added to its amenity space. “It was nonrevenue-producing space, but we needed to do it for ourselves, so I don’t regret it, but of course the economy slowed down after we committed to spending that money,” explains Waters.

The business is currently retooling its budget and may have to scale down support staff. “In order to offer the experience we want for our clients, it takes a fair amount of support staff, but we will be looking to link those up accordingly. Based on our volume, we are putting set budgets on how much we want to spend on front desk and support staff,” explains Waters.

She also is trying to minimize waste for both environmental and cost reasons. On the salon side of Changes, there is a large glass container in the back where stylists are asked to dump unused color in order to show how much waste is taking place. Waters and her team are still trying to figure out a fun and energizing way to bring this idea to the spa side of the business.