9% of Hair & Beauty Businesses Have £1000 Or Less in Savings
Published
17th Mar 2023
by Sian Jones
New research by Yell has revealed that 9% of hair & beauty businesses have £1000 or less in savings, demonstrating the worrying state of small business finance within the UK. The study also revealed that close to one million businesses overall also have £1,000 or less, to help them weather a downturn in custom.
The study, which surveyed just over 500 leaders of SME businesses within the UK, sought to uncover the financial landscape owners are currently facing, following a tumultuous three-year period marred by the COVID-19 pandemic and the ongoing cost of living crisis.
Having surveyed senior leaders of small and medium hair & beauty businesses (under 250 staff) within the research, Yell’s study reveals that the outlook is just as concerning in the sector, with 1 in 10 having £1,000 or less in the bank, and almost 1 in 5 (18%) lacking confidence that their business will be afloat in the next 3-5 years. Amounting to 17% of all SMEs within the UK that have extremely slim savings to keep their business afloat, the study also shines a light on the current lack of confidence many owners have on the likelihood of still being in business come 2024, with 13% uncertain whether they will still be trading in 12 months time. Not only this, over a third (37%) of senior decision makers in the hair & beauty sector say they are able to save significantly less, vs. what they were able to save pre-pandemic.
As experts suggest that businesses should have 3-6 months of operating costs saved in the bank, this paints a particularly worrying picture, especially as the research also found that 1 in 10 businesses with up to 49 employees have no savings whatsoever, putting the jobs of millions at risk.
The ongoing cost of living crisis is undoubtedly having an impact on businesses having the ability to save, as 1 in 10 (10%) SMEs say they can’t save anything each month, with a further 9% also only able to save up to £200 per month. For sole traders, this is even more of a concern, as 1 in 3 currently don’t save anything to help keep their business buoyant each month.
Inflated costs and low savings are certain to have a knock-on-effect on the confidence of those at the top, and Yell’s study goes on to show that 2023 could be a troubling year for many. 1 in 10 (amounting to 550,126 UK businesses) aren’t confident they’ll be afloat in six months’ time, a number that rises again when looking further towards 2024, with 13% of all UK SMEs not feeling confident they will still be trading 12 months from now.
This lack of confidence is more prevalent in certain parts of the country than others, with more business leaders in London feeling the pinch of what is an already expensive location to run a business and worrying whether they will still be around come 2024.
What Can Business Leaders Do?
With some news reports showing that the cost-of-living crisis could last until 2027, many business leaders will be wondering what they can do to enable themselves to save more, and add more security to both their livelihoods, and those of their employees.
To help, Yell has worked with Business Finance Expert Connor Campbell from comparison site NerdWallet, who commented:
“Cutting costs without sacrificing quality is a balancing act. Whenever you look to make a saving, you should ask yourself whether it will materially impact the quality of your service or product. If it will, those savings may lead to greater losses down the line. However, there are a few areas that you can look at:
“Where business have cut all the costs they can, the most important thing is to then minimise exposure to risk. For example, locking in contracts for longer periods of time is one way of doing this – if businesses can afford their outgoings at present, ensuring those prices don’t change for the foreseeable future is an effective way to strengthen their financial position.”
Mark Clisby, Co-CEO at Yell added, ‘’There is currently a lot of discussion around personal savings, and this feedback from UK SMEs is a good reminder of the importance of regularly reviewing where to invest and where to make savings.
Quite often, a common reaction can be to cease marketing activity, but time and again we see this as a counterproductive option. Marketing is required to bring in new customers and keep revenue coming in and your competitors may be increasing their media investment, so will be more prominent. As Connor outlined, the likes of suppliers, subscriptions and utilities are smart places to start, before making decisions that may be too drastic.”
For the full findings, in addition to further tips and advice for businesses, visit: https://business.yell.com/sme-insight/slim-savings/ and take a look at what the Spring Budget could mean for you and your business here.
The study, which surveyed just over 500 leaders of SME businesses within the UK, sought to uncover the financial landscape owners are currently facing, following a tumultuous three-year period marred by the COVID-19 pandemic and the ongoing cost of living crisis.
Having surveyed senior leaders of small and medium hair & beauty businesses (under 250 staff) within the research, Yell’s study reveals that the outlook is just as concerning in the sector, with 1 in 10 having £1,000 or less in the bank, and almost 1 in 5 (18%) lacking confidence that their business will be afloat in the next 3-5 years. Amounting to 17% of all SMEs within the UK that have extremely slim savings to keep their business afloat, the study also shines a light on the current lack of confidence many owners have on the likelihood of still being in business come 2024, with 13% uncertain whether they will still be trading in 12 months time. Not only this, over a third (37%) of senior decision makers in the hair & beauty sector say they are able to save significantly less, vs. what they were able to save pre-pandemic.
As experts suggest that businesses should have 3-6 months of operating costs saved in the bank, this paints a particularly worrying picture, especially as the research also found that 1 in 10 businesses with up to 49 employees have no savings whatsoever, putting the jobs of millions at risk.
The Cost of No Confidence
The ongoing cost of living crisis is undoubtedly having an impact on businesses having the ability to save, as 1 in 10 (10%) SMEs say they can’t save anything each month, with a further 9% also only able to save up to £200 per month. For sole traders, this is even more of a concern, as 1 in 3 currently don’t save anything to help keep their business buoyant each month.
Inflated costs and low savings are certain to have a knock-on-effect on the confidence of those at the top, and Yell’s study goes on to show that 2023 could be a troubling year for many. 1 in 10 (amounting to 550,126 UK businesses) aren’t confident they’ll be afloat in six months’ time, a number that rises again when looking further towards 2024, with 13% of all UK SMEs not feeling confident they will still be trading 12 months from now.
This lack of confidence is more prevalent in certain parts of the country than others, with more business leaders in London feeling the pinch of what is an already expensive location to run a business and worrying whether they will still be around come 2024.
The Regions Where Small Business Confidence Is At Its Lowest
| Region | Not Confident They’ll Be Afloat in 12 Months |
| Greater London | 15.53% |
| South West | 14.29% |
| West Midlands | 13.89% |
| North West | 13.73% |
| South East | 11.84% |
What Can Business Leaders Do?
With some news reports showing that the cost-of-living crisis could last until 2027, many business leaders will be wondering what they can do to enable themselves to save more, and add more security to both their livelihoods, and those of their employees.
To help, Yell has worked with Business Finance Expert Connor Campbell from comparison site NerdWallet, who commented:
“Cutting costs without sacrificing quality is a balancing act. Whenever you look to make a saving, you should ask yourself whether it will materially impact the quality of your service or product. If it will, those savings may lead to greater losses down the line. However, there are a few areas that you can look at:
- Suppliers – If you are sourcing supplies, is there a cheaper version of the same product that will not harm the quality of your own offering? Or can you negotiate your deal with your existing suppliers, and see if they can bring their prices down?
- Utilities – Similarly, can you reduce the cost of your utilities? This could be finding a cheaper broadband provider, looking into energy saving measures to reduce your electricity and gas usage, or even switching business energy suppliers entirely.
- Check your subscriptions usage – Are there any services your business is paying for that you don’t use – or don’t use enough – that you can get rid of? Can you replace any of these services with cheaper versions, or even free alternatives?
- Don’t be afraid to raise your own costs – You may need to consider raising your own costs. If so, you need to find the sweet spot between increasing the price of an item or service enough that it allows you to save more, but without it alienating your customer base and driving people away.
“Where business have cut all the costs they can, the most important thing is to then minimise exposure to risk. For example, locking in contracts for longer periods of time is one way of doing this – if businesses can afford their outgoings at present, ensuring those prices don’t change for the foreseeable future is an effective way to strengthen their financial position.”
Mark Clisby, Co-CEO at Yell added, ‘’There is currently a lot of discussion around personal savings, and this feedback from UK SMEs is a good reminder of the importance of regularly reviewing where to invest and where to make savings.
Quite often, a common reaction can be to cease marketing activity, but time and again we see this as a counterproductive option. Marketing is required to bring in new customers and keep revenue coming in and your competitors may be increasing their media investment, so will be more prominent. As Connor outlined, the likes of suppliers, subscriptions and utilities are smart places to start, before making decisions that may be too drastic.”
For the full findings, in addition to further tips and advice for businesses, visit: https://business.yell.com/sme-insight/slim-savings/ and take a look at what the Spring Budget could mean for you and your business here.
