Small salons feeling the pinch of rising business costs
More than half of small salon owners fear that they may face closure if business costs continue to rise at the current rate, according to new research. The study of 750 small businesses, conducted by the Centre for Economic and Business Research (CEBR) and commissioned by business deal company Make It Cheaper, showed that 54% of salons believed they would struggle because their overheads have risen by 23% over the past five years. Make It Cheaper modelled a Business Cost Index to track inflation and revealed that in terms of individual overheads, transport costs are expected to rise by 20.5%, energy bills by 8.5% and insurance premiums set to rise by 7.1% in 2011. Seven in ten salons have seen their profit margins hit by rising costs, causing 41% to increase their salon prices and nearly a quarter of owners having to cut staff, said the survey. Jonathon Elliot, managing director of Make it Cheaper, added: 'Comparing prices, regularly switching suppliers and being careful to not get caught in contract renewal traps can help companies bring their overheads under control.'