News & Insights

Managing risks in a beauty salon

Published 16 July 2015

When you first decide to start your own business, you need to accept that a common companion along the way to any success is about managing risks. Most of us like to think that it will all be smooth sailing. The simple fact is that the pathway to your success is far more likely to be filled with peaks and troughs, and your ability to maximise the peaks and even out the troughs, will go a long way to the future success of your company.

Unfortunately, the vast majority of small businesses fail within the first few years. You can however take actions to ensure you’re minimising risks and maximising the success of your company, including:

  • Greater education, not only in your chosen career in aesthetics, but in business principles
  • Utilise the knowledge from experts in fields in which you have little knowledge (eg. accountants, lawyers, business coaches, etc)
  • Create and maintain a fully accountable business plan and follow it.
  • Create and maintain a fully accountable risk management plan and follow it

managing risks

The majority of business owners are aware of the first three points above, even if you have elected not to follow through with them – but have you ever documented the risks you believe could impact your business, and created a plan to minimise the event of each of these happening to you?

Prominent Australian insurance broker Danny Gumm, who led the Professional Associations team at Gallagher, explains that business owners who are guilty of this are not alone.  

“You are in good company so don’t feel guilty if you have not created a risk management plan.  It is a common problem for many business owners trying to find time to allocate effort to these essential but often over-looked tasks,” says Mr Gumm.

The easiest risks to manage are those linked to your own actions, as you have complete control over your thoughts and performance. That being said, they could also be considered the hardest, because sometimes it can be difficult to assess your own performance, and to honestly accept change in order to progress. This is why the above suggestions such as education, and most importantly, a business plan with accountability (preferably with a business coach or other third party watching) are so important.

The biggest risks to manage are generally those which are outside of your control. These can have a huge impact on the success of your business including staff, customers, suppliers, landlords and premises.


No matter how experienced or qualified you are, “a chain is only as strong as its weakest link”.

It is important you continue to invest such knowledge and education into your staff to create a stronger team working for you, and therefore minimising the potential for things to go wrong. To start with, when you hire, ensure you are taking on the best possible candidate. This does not necessarily mean the most experienced staff member but the one that is keen to learn and loves what they do.

After this, you must map out a career plan for each staff member, incorporating education and career progression. Your employees will feel valued and as a result, bring a positive attitude with them to work.

Most importantly, you must follow procedures so every staff member knows exactly what is required, and is accountable to this process. The most successful businesses have these procedures fully documented and presented to every staff member, which not only allows existing staff to know what is expected, but also new staff can easily be brought into your business. This also actually has the added benefit of making your business far more valuable for purchasers when you are ready to sell!


There are many precautions you should take when dealing with customers, and qualified beauty therapists should look at including risk management controls such as:

  • Full customer consultation
  • Transparency
  • Client cards
  • Signed consent forms
  • Disclaimer notes
  • Before and after photos
  • Broad insurance protection, and knowledge on what you have to do in the event of a claim
  • Be prepared to say no if you are not wanting to treat a customer for any reason


In many cases, the location of your premises is one of the most important factors in the success of your business.  Certainly, in real estate, it is all about location, location, location however there are other elements that need to be considered prior to signing the lease agreement.

One of the main concerns is that most business owners are so keen to occupy their ‘ideal’ location that they readily forget that the lease is a legal document that can transfer exceptional liability to the business owner. It is now common for lease agreements to pass landlord legal responsibilities onto the tenant. These days it is not uncommon for landlords to request incredibly high levels of insurance protection ($50 million liability in some cases) as well as many other classes of insurance such as plate glass, and damage protection.

Outside of insurance responsibilities landlords can also place high legal obligations on other areas of your occupancy eg. what fit out you can install, how and when you can trade, etc.

Before signing a lease remember it is a legal document which can have a substantial impact on your business so seek legal advice and recommendations prior to signing on the dotted line.

Outside of the Lease, the obvious considerations on the location of your premises also must not be overlooked, such as:

  • Council bi-laws and potential restrictions
  • Physical considerations
  • Ease of parking/transportation
  • Does it flood?
  • Access restrictions


The quality of your customer satisfaction is strongly dependant on the products you use.

Whilst the beauty therapy market is flooded with concepts and products, it is essential you do your research to ensure you only use products you have confidence in ,and that you believe provide the best possible results for your clients.

Only use reputable companies or ones that come highly recommended. Do not get convinced by salespeople to start activities you are not qualified to provide, have had limited training in or do not feel comfortable with. At the end of the day, the salesperson walks away with your money, but you are left with the potential risks associated with that unknown product.

It can be exhaustive trying to take into account all the different considerations when assessing the risks your business could run into, especially when working with third party suppliers.

Salon owners will often run into risks which are outside of their control however it’s important to remember that there are areas that can be managed with the following advice:

  • Ensure that you proceed with caution with every relationship that you enter into
  • Do your own research.
  • Seek the advice of professionals whenever possible

If you follow the above instructions and incorporate the valuable contributions of others, you will stand a greater chance of ensuring your salon flourishes both now and into the future. 

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