With energy bills at an all-time high, what support is available and what can you do to get through the months ahead – and beyond?
While saving energy for sustainability reasons has been on the industry’s radar for some time, it has now become critical for their very survival. With energy costs rising, the results of the latest NHBF State of the Industry survey (October 2022) reveal the extent of Members’ worries: more than nine in 10 (93%) described energy costs as their main concern, compared with 77% in July 2022.
How prices are affecting the sector
The survey results also revealed that more than three-quarters (77%) of Members are paying more for energy now than they were six months ago, and energy costs have increased by more than 40% for half of businesses.
The NHBF is lobbying the UK government to show how rising energy bills are impacting hair and beauty businesses.
‘One of the points we learned during the pandemic is that you can’t assume the government understands the sector,’ says NHBF chief executive Richard Lambert. ‘We need to work hard to educate it. We’re using the findings from Member surveys to give the government a real sense of how price increases are affecting the sector.’
Help is at hand
In response to Members’ energy bill concerns, the NHBF set up a partnership with energy broker Direct Business Solutions in 2022 to help salons find new energy contracts.
Finding contracts can be incredibly complex for businesses, says Richard. ‘Using a consultancy will make Members’ lives easier. They can take their requirements to somebody who understands the market and get a recommendation for the best contract for them. This will leave them time to focus on providing a good service for clients.’
He adds that it’s not just about getting the cheapest deal, as a company may end up collapsing if it can’t sustain the price. ‘Direct Business Solutions will look at energy providers to make sure they’re able to provide the contract over the set period.’
Government support
In October 2022, the UK government launched the Energy Bill Relief Scheme (EBRS) to give businesses six months of discounted energy bills. This includes all businesses that secured new energy contracts from 1 December 2021.
NHBF director of policy and public affairs Rosina Robson says that at the end of March 2023, a new scheme will be launched for businesses that need extra support. Keep an eye out on the NHBF website for updates.
She adds: ‘The results from the State of the Industry survey show the rollercoaster ride that hair and beauty businesses have been on, and how energy intensive the industry is. We want to make the case for the sector so the government categorises it as vulnerable and provides further support to Members.’
After the Autumn 2022 budget in November, NHBF chief executive Richard Lambert added: ‘Energy is the first- or second-largest overhead for salons, so that decision [on the EBRS], when it comes, may determine whether it’s game over or not for many businesses at the heart of the high street and their community.’
CASE STUDY
How are you reducing your energy?
Ryan Crawford, owner of Crawford Hair near Milton Keynes, has been trying to reduce energy consumption in his salon since his bills started going up in autumn 2021.
His efforts include turning off lights, making the most of the natural light coming in through the Velux windows, and using cold water to clean.
Ryan has a team of seven stylists and apprentices, and they regularly meet to discuss how the salon can save energy.
‘I spent a lot of time battling the energy company to try and get out of a three-year contract,’ he says. ‘I gave up as it was taking a lot of time and keeping me away from the business.’
Rising costs mean there is less money to spend on other areas of the business. To ensure he can continue to provide staff training, Ryan is working extra hours, unpaid, to balance extra bills and cover training costs.
‘Everything is going up in price, not just gas and electricity. As well as trying to conserve energy, we’re going to increase prices slightly and hope clients stay. It’s a difficult balance.’
What can you do to protect yourself?
Carl Thomas, sales director at Direct Business Solutions, offers his insight:
- If your contract is about to end, negotiate a fixed energy contract quickly. The sooner you do this, the cheaper the rate will be. Have this in place before energy prices continue to rise.
- If you don’t have an energy contract, secure one. Suppliers will charge you more if you’re out of contract because they aren’t buying your energy in advance. At October 2022 prices, if you’re out of contract, you could be paying £10,000 a year extra in energy bills for your salon. See nhbf.co.uk/energy-partnership for help.
- If you’re in arrears, speak to your supplier or a consultancy to resolve the situation. Make sure you’re paying your bills and not cancelling direct debits. Don’t bury your head in the sand – be open and honest.
- Secure your business. To get through the next 12 months, salons and barbershops need to increase profit while retaining and attracting clients. You can’t keep increasing prices, as you may put off clients who are struggling.
- Reduce energy consumption. For instance, after every appointment, remove devices such as hairdryers and straighteners from plugs rather than leaving them on standby.
- Get your staff on board. Encourage your team to remember simple actions, such as turning lights off and switching off appliances at the wall when not in use.
TOP TIPS
Three energy-saving hints
Michael Allen, owner of Allen’s barbershop in Gravesend, says:
- Reduce hot water by installing tap aerators (devices that reduce the amount of water passing through a tap) and eco shower heads to backwashes.
- Switch to LED lighting and reduce overall lighting in ‘non-service’ areas. For example, you can use motion sensor lighting in corridors and staff areas.
- Work a few extra hours a day but one day less a week to cut down on heating costs. By doing four slightly longer days a week, I have reduced my heating costs by around £180 a month.
RESOURCES