Survival Tips for Beauty Entrepreneurs in Tough Economy

 Omolabake Fasogbon

The Nigerian beauty and personal care industry remains a significant contributor to the national economy, driven by burgeoning urbanisation and unending desire of all to look good.

Notwithstanding the prospect of the sector projected to reach $5.28 billion by 2026, players are struggling to stay afloat. Like other sectors, this space is not immune to economic challenges that have literally kept the country under pressure. With rising costs of raw materials, reduced purchasing power, inflation and unstable foreign exchange rates, beauty entrepreneurs face new hurdles to survive.

Acknowledging hard time in the sector at a forum recently, a renowned Aesthetician, Dr. Eyitope Jones noted that the desire to look physically attractive has never been stronger, especially as people seek to conceal the stress and struggle that define the period. 

She revealed however that patronage for beauty services have not increased in tandem with growing demand.

Corroborating her submission, the Chief Executive Officer of The Aesthetic Clinic, Ifeoma Abajue stated that as much as every woman wants to look good, many cannot have it as they wished because of overriding priority, including food. 

“I observe that beauty enthusiasts are buying or subscribing to beauty routine less than before. Unfortunately, prices of products and raw materials keep increasing as a result of forex, hence constrain us to reducing our costs,” she submitted. 

On how she still manages to run the company, she said, “We try as much as possible to keep our cost reasonable, not compromising on quality. We do this, however, enduring low margin.” 

The submission of these stakeholders further highlight the dilemma in the billions of dollar industry, putting players at a crossroads. 

But an analyst in the sector and CEO of Parthian Capital, Ndidi Ukaonu, maintained that an unstable economy could present new opportunities for players to look inward and chart new growth path, away from being glued to everyday routine. 

As far as the beauty industry is concerned, Ukaonu posited that the panacea for fluctuating economy is innovation, in addition to adopting resilient financial strategies. 

Of importance too is growing revenue and cutting costs, she stressed. 

“By expanding revenue, cutting costs wisely, and staying customer-focused, businesses can thrive even in uncertain times. Failure should be our teacher, not our undertaker. It is delay, not defeat,” she added. 

Still on growing revenue, the financial expert advised that the focus should shift towards diversifying revenue sources, adding that cost-cutting should be without compromising quality. 

More tips to boost income and trim cost according to Ukaonu are provided below: 

Product and Service Expansion

Introducing new services, such as premium skincare treatments or custom formulations, can attract a broader clientele.

Vertical Integration

Beauty businesses can forward-integrate by offering in-house makeup services or backward-integrate by developing their own product lines and sourcing raw materials directly.

Niche Markets and Brand Development

Tapping into underserved markets—like eco-conscious consumers or specific skin concerns can set a brand apart.

Assessing Staff and Location Costs

Optimise team size and relocate to cost-effective spaces if necessary.

Budgeting and Cost Discipline

 Conduct regular audits to identify non-essential expenses. Start by tracking your income and expenses to identify your inefficiency, then create a comprehensive budget that allocates resources effectively. Prioritise essential expenses such as rent, inventory and staffing, while minimizing discretionary spending.

Customer Retention

Loyal customers are more valuable than ever. Offering “at-home care products,” or personalised service packages can keep customers engaged. This also aligns with the rising demand for convenience in the post-pandemic era.

Financial Strategies

In addition to operational adjustments, businesses must adopt robust financial strategies. Earning interest at parity with inflation and reducing currency dependency are crucial. This might involve exploring stable currency revenue sources or leveraging high-interest savings accounts.

Creativity

Businesses need to rewire their thinking by embracing innovation and re-evaluating traditional methods. For instance, partnering other brands or adopting digital tools can enhance visibility and efficiency.