The statistics are in and they show that small businesses have been disproportionately affected by the series of COVID-19 lockdowns in Australia. Lockdowns are a necessary evil to keep the economy running, instead of grinding to a standstill as they did in many other countries before they vaccinated a majority of their populations. But they are incredibly hard – impossible for many – small businesses to weather, and come at the cost of billions in lost economic activity.
The Australian Bureau of Statistics found that small businesses were twice as likely to report a steep drop in revenue than large businesses. They also found in their latest survey that most small businesses have seen a decline in revenue in recent months, likely due to lockdowns, and that they don’t anticipate much growth in revenue in the near term.
So how is it on the ground in the NSW Local Government Areas affected by the current lockdown?
Karen Aylett, Managing Director of Fabiola Beauty in Wollongong says “I believe both the therapist and clients are satisfied with the current lockdowns as it reduces everyone risk.” Although that sentiment is not the same across the board, with plenty of discontent and downright anger at the lack of support and the helplessness, as a business owner, that comes with the loss of control, loss of revenue and inability, through no fault of their own, to look after their staff or perhaps pay bills during mandated lockdowns.
Aylett says Fabiola Beauty was busy between the last serious lockdown in early 2020 and this one. With clients largely stuck on the ground in their home cities, they had the time and many had the funds from forgoing holidays to do treatments and services with downtime. “In NSW we have been relatively unaffected since business recommenced in June 2020. Clients were very keen to book appointments on our return. Business throughout the remainder of 2020 was very good with clients investing in some of our more advanced technologies. I believe the clients were more able to commit to courses of treatments like laser skin rejuvenation as they weren’t travelling or had more time to commit to treatments they had been wanting but unable to do when busy.”
Support needed
Yet even with Fabiola Beauty’s busy interim period, Aylett believes there should be some sort of support with forced closures across the beauty industry. “I don’t think it’s fair that there’s no offer of assistance for the employees of services & hospitality industries. If we are told we cannot work there needs to be something put in place for these industries as we are disadvantaged compared to retail for example.” Sharon Lee Hamilton, Namesake of Woollahra’s celebrity eyebrow atelier Sharon Lee agrees, saying “I feel there should be stock standard grants for small business. I feel particularly for those in the food industry who have costly stock (fresh produce) that has a limited shelf life that is rendered useless.”
The latest lockdown is particularly hard for new small businesses – like Sole Operator Krystah Ranson’s Boutique of Holistic Beauty in Surry Hills – which can end up in more precarious situations without the financial history needed to qualify for most of the financial assistance available right now. “The Boutique of Holistic Beauty has been majorly affected, being a fairly new small business. Building a clientele is a challenge at the best of times, so having to cancel/reschedule is heartbreaking for my business. As a new small business it’s very difficult and there’s not a lot of support we are eligible for being brand new which I would love to see the government do something to help us out,” says Ranson.
Hamilton says she’s seen the mandated closures hit her industry hard in 2020 and 2021 on various fronts. “I have seen it fracture so many salons, particularly those who rely on walk-ins or who’ve had staff who had to return to their home towns/countries. So much training, which means time and money, goes into building a solid team member so to have made this investment then have them leave is heartbreaking.”
In the meantime, the federal and state governments across the nation have ramped up funding efforts, with a particularly vast package created in NSW, but it might not have come soon enough for some businesses.
Funds needed to support staff
Aylett says staffing problems are also something her friends in the beauty industry overseas have faced thanks to a lack of support while closed. “This could cause staff of the disadvantaged industries to question whether to look at alternative work as this may continue for some time. A close friend of mine has a hairdressing business in London. Her biggest problem on their return was staffing her salon as her employees had changed to different professions/ industries to avoid being financially disadvantaged by the shutdowns.”
Taking the pulse of clientele
Daniela Costa of Daniela Costa Brows and Beauty in Concord says they’ve suffered a loss of turnover due to the snap weeks-long closures, but that they often see a bounce back in bookings after lockdowns end. “If anything after lockdown we have been busier than ever and have had to open for extended outs to try and accommodate those clients that unfortunately missed out during the lockdown. The hardest part of the lockdown is the unknown of how long it would go on for and missing our clients and being able to connect with them physically.” But, generally, says Costa, clients are more understanding about the uncertainty and snap closures now that we’re a year and half into the pandemic, which wasn’t always the case. She says “Some found it frustrating the first Sydney lockdown as they couldn’t understand how hairdressers could still operate yet we had to close when we fall under very similar industries.”
Hamilton says it’s surprisingly the younger clients who seem to have a harder time with the lockdowns. “I would say that generally it’s been the younger clients who seem to struggle more. They really miss the social aspects of physically going out whereas the clients with families or a few more years under their belts have almost relished some home time and life’s forced slower pace.”
Communication is key
Everyone universally said staying in touch with clients during lockdowns is key. Costa says “Keeping an online presence is vital and so important during these times to stay connected to our clients, offering online/virtual consultations, personally calling clients, having an online store, offering free, contactless deliveries. We stay in touch with our clients via phone, email, social media… it’s so important to keep the communication there.” Hamilton says they’ve been getting dozens of emails a day alongside DMs on social media, live chats and regular phone calls. Whereas Elizaveta Dufourq, Founder of Russian Manicure nail studio Polished Atelier in inner Sydney, says they mainly communicate via Instagram and messages. Costa says they’ve also gained a ton of new clients on social during the pandemic. She says after lockdowns their clients “couldn’t wait for us to re-open our doors and we gained a lot of new clients that started following us via social media.”
Hamilton says that she thought they’d have mass cancellations during lockdown last year, but that didn’t happen thanks to a very loyal (and well-organized) client base. “The shocking reality is we refunded just TWO people,” says Hamilton, “and only because they were not going to be in Australia beyond the date they had booked. I’m really proud of the client retention rate we have. Our clients are incredibly loyal and this is a testament to the fact we over-service and I’ve an incredible team alongside me.”
Dufourq says most clients are still around after lockdowns are over and restrictions have eased too, and that the vast majority have appointments booked well down the line, just as they do at Sharon Lee eyebrow atelier. “Our clients are very understanding as we built a relationship with them,” says Dufourq. “They know they will be taken care of as soon as we have the opportunity.”
Future-proofing business
Not only do Hamilton’s clients book ahead, but Sharon Lee banks the revenue from future appointments because they take payment in full at the time of booking, “As we are a prepaid service it’s been a straight forward case of putting the appointment booked during the lockdown onto credit and we simply ensure we reach back out to them for rebooking in the order they were booked (i.e. anyone with a booking the first day of lockdown are the first we place calls to on our return.”
This has, at times, put the eyebrow atelier at odds with norms in the industry but Hamilton’s payment strategy and lack of reliance on walk-ins has paid off for her business in particular. “My business model was initially frowned upon by others in the industry. We were the first to insist on full pre-payment. We don’t encourage or rely upon walk-in trade. We are upstairs in a security building away from foot traffic. We also have a very different price point and all-inclusive offering. In short, we do things VERY differently and thankfully for my team and I this has served us and our clientele well.”
Costa says these lockdowns have made her realise that beauty businesses need to rely on more than a single source of revenue. “I think it has taught us that we really can’t be just a service-based business. Our retail presence needs to be strong in order to keep our business going even whilst put into lockdown.” Ranson agrees saying her business is currently “surviving from online product sales and gift vouchers.”
What small beauty businesses want to see
Aylett wants to see the government put more thought into planning for future scenarios where small businesses need to close for extended periods. “Moving forward,” she says, “I hope more consideration is given to how certain sectors are effected. It can’t be expected that if your unable to do your job that you use your leave! Once that’s used up what happens then? What happens if staff don’t have leave?”
There’s a real need for the government to recognise the multi-billion dollar beauty industry as a standalone entity, a regulated sector, says Dufourq. “Beauty is one of the most controlled and hygienic after medical and always in demand, even during crisis.”
What they’re feeling right now
Hamilton says throughout this who process she’s learned to slow down. “I am someone who is up before the sun and has a solid brief on what needs to be accomplished for the day. That’s still how I operate – but slower. Calmer. I look up more.” And that closing to keep her team safe was priority number one.
Dufourq takes the sanguine view of a seasoned business operator who has weathered uncertainty before, having previously run a small business in South Africa. She says “It’s all about how we look at situations. Any situation is either a victory or a lesson. Either way it’s a win… Keep up-skilling and focus on clients and growth post closures.”
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