Salon energy bills top 40% of business costs

Salon energy bills make up 40% of the average hair and beauty salon's total business costs, according to a new survey of decision makers by Uswitch for Business, the business energy comparison and switching service.

Rising energy bills are the top concern for salons and spas, more so than rent costs, product inflation and attracting new customers, with 24% of salon business owners saying that they are struggling to pay the energy costs associated with running their businesses. As a result, four in 10 of those salon decision makers (40%) feel anxious about their business, while one in five (20%) have had to ask family and friends to help cover business costs. In response to these challenges, almost a third of salons (32%) have had to increase prices, whilst some are also taking other precautions such as turning off, down or restricting air-conditioning or heating (32%), training all staff in energy efficient measures (31%) and investing in more energy efficient appliances (27%). 

With inflation expected to remain high, Uswitch for Business estimates that salons who have fallen out of contract could be paying up to 50% more than those on a negotiated deal. If costs continue to rise, decision makers will need to consider more ways to manage cash flow to avoid having to close their business. More than two in five (44%) said they may have to reduce the number of services on offer, and almost one in three (29%) may also have to downsize or close down sites (28%). Some salons have already had to let staff go or reduce shifts (18%).

Others have seen employees leave for better paying roles (25%) and have opted to reduce business hours (21%). As the cost of living continues to rise, salons have noticed that customers are selecting cheaper treatments (40%), leaving longer intervals between appointments (35%), giving lower tips (29%) and coming in for hair treatments with wet hair to save costs (18%). Overall, consumers are making cost cutting decisions where they can, with a third of owners (33%) seeing fewer appointments booked now compared to last year.

Jack Arthur, Energy Expert at Uswitch for Business Gives his Opinion:

“The hair and beauty industry is an essential part of the UK economy, providing jobs and services to millions. However, reduced footfall and sky-high energy costs puts salon and spa owners in a really difficult position." “Business decision makers should ensure they are aware of the terms and end date of their current energy contract, so they can shop around for the best rates at the renewal time." “If salon owners have concerns about paying their bills or aren’t receiving the right level of support, they should contact their energy supplier as soon as possible.”

How Paul Faulkner, Owner of The Retreat Hairdressing in Wisbech, Cambridgeshire is Coping: 

“The rising cost of energy is a major issue for my business. We need to continue to provide the best possible service for customers without having to raise prices. Unfortunately becoming more and more difficult.” “As a business owner I am constantly looking at ways to keep costs as low as possible whilst continuing to offer the services my customers want. We are always reviewing costs and staying energy cautious by taking steps including turning off or down heating and air conditioning and having flexible business hours." “Whilst we can be creative in how we operate, the rising costs of energy is hitting the industry hard with many salons feeling the pressure or closing altogether.”

How to Save on Energy Bills in Your Salon:

Jack Arthur, Energy Expert at Uswitch shared his advice on how to avoid overpaying on business energy costs, take a look at his tips below...

1. Check all your contracts - both gas and electricity. Dual fuel agreements do not exist in the business market. This means you will likely have different arrangements for your gas and electricity. Make sure you know all the details of both contracts. This includes the contract types, duration, end date and the current supplier.
2. Identify your ‘switching window’ - The ‘switching window’ is the period where you can change to a cheaper deal if you're on a contract you’ve not chosen, your tariff has expired or if you’ve recently taken over a new premises. 
3. Seek expert advice to find a competitive energy deal - Finding the right deal for your business can take time. If you are struggling to understand the ideal contract needed for your salon consider speaking to an energy broker. With inflation expected to remain high, Uswitch estimates that salons who have fallen out of contract could be paying up to 50% more than those on a negotiated deal. Sites like Uswitch for Business can help you during your search for the best contract. 
4. If you’re struggling to pay your bills, speak to your supplier ASAP - Contact your supplier as soon as you can if you are worried about paying your business energy bills. Suppliers may be able to work with you to agree a more suitable payment plan. 
5. Understand how to improve your Salon's energy efficiency - You can make a difference to your overall consumption by being more energy efficient. Things such as energy saving lighting, turning off equipment when not in use and installing a half-hourly or smart meter can really help to keep the prices down. Has your landlord increased your rent during the cost of living crisis? Check out our article where you can find out what your rights are and what this means for you and salon.