The cost of living crisis is pushing many hair and beauty businesses to the brink of closure.

Rising energy costs are a particular worry for hair and beauty salons, because they rely on electricity-hungry appliances like hairdryers, straighteners and tanning beds.

Earlier this month, the National Hair and Beauty Federation (NHBF) reported that less than half its members – most of which are small independents – were confident their business would survive.

More than half said they had raised their prices and 77% reported they were paying more for energy compared to six months ago.

NHBF Chief Executive Richard Lambert said that many businesses had already closed, with some paying three or four-times as much for their energy.

The fact that most salons are independent, low-margin, and turn over less than £250,000 means they are even more exposed when costs go up.

For the time being, most hair and beauty businesses get some respite from the government’s energy support package for non-domestic users. But this scheme is due to end on 31 March 2023.

In his Autumn Budget speech, the new Chancellor Jeremy Hunt suggested that some vulnerable businesses and sectors would get additional support beyond March 2023, but it’s not clear whether health and beauty businesses will be included in this. 

The government said the “overall scale of support” would be significantly lower and “targeted at those most affected to ensure fiscal sustainability and value for money for the taxpayer.”

Richard Lambert said: “As a sector full of small and micro businesses that are very fragmented, we may find it difficult to convince the government that this is a vulnerable industry.”

Tom Fox, Licensed Insolvency Practitioner at Umbrella.UK Insolvency, said: “Beauty is big business in the UK. The sector reached a total value of almost £30bn in 2018.

“The industry has endured some hard times since then. Beauty businesses were among the last to be re-opened following coronavirus lockdowns and it’s estimated that more than 4,500 hairdressers and beauty salons closed for good during the pandemic.

“What small firms need now is more clarity on what their energy bills will cost next April. Further cost increases may prove too much for some to take.”

Umbrella Insolvency can help if your beauty business is struggling with rising costs and unpaid bills. Speak to a member of the team for free confidential advice. Call: 0800 611 8888.