Be money smart for your salon
As a hair or beauty salon owner, you work very hard doing your amazing work and keeping your clients happy. Suddenly, you also had to become an expert in managing finance, human resources, marketing, social media and so on. Sometimes things can be a bit overwhelming but it is important to take small steps to have control of your financial situation. How?
Know your Expenses Inside out
I don't know about you but as a business owner looking at the bank account can be a brave thing to do! It's a great feeling when you have very well earned money coming in from the fruit of your hard work but do you know exactly the money coming out? Think about those wages, rent, inventory, insurance, supplies, stationery (the list can be pretty long, hey!) How about making a profit for yourself?
As a beauty salon owner, I can't emphasize enough how critical it is to know all your expenses in and out. If you haven't already, grab your notebook or your laptop and start going through your bank statement and highlight every single dollar that came out from your bank account and put them into categories. These can be something like the below:
- Direct Expenses
These are all the expenses that are attributable directly to doing your beauty procedures. For example all your beauty supplies you need to perform your work, your retail products (inventory) and so on. You don't need to list every single product and I suggest grouping them by your supplier's names and hopefully Luna Beauty is one of them! 😊
- Indirect Expenses
These are all the expenses related to running your business such as rent, insurance, wages, utilities, stationery, software costs, subscriptions, memberships, training, cleaning, etc etc.
Some people prefer to separate costs in fixed vs variable but coming from the corporate world myself, I see more value in using this system.
Once you have all your expenses listed...
Time to put your business and master negotiator hat on!
Start thinking about any cost saving opportunities. For example, you could contact your beauty supplier and negotiate some discounted pricing? I am sure they want to keep your business (as much as you want to stay in business) so you will be surprised at what you can achieve by simply asking the question. It's like calling your bank and telling them you will switch banks if they don't drop the interest rate!
Another example is simply shopping around on costs like electricity, internet, insurance, etc etc.
On a similar note, don't forget to look for potential government grants! I have done a blog on this topic which you can find here.
Now, the next very important step is to...
Create Your Salon Financial Budget
Budget is not a fancy word and we may be a bit reluctant, unfamiliar or even scared to do one but this step is super important so we are not drowning financially.
When doing your budget, the rule of thumb is that your outgoings should be less than your income. I know it's a no brainer but this will determine for example what retail products you will buy or how far ahead you buy your beauty supplies for and so on.
There are lots of templates on how to create a budget online so have a look and pick one that suits you!
Set your Targets for Growth
First of all, be money smart and don't spend all your money during peak periods. Unfortunately, there are some quiet times and expenses run at the same pace so be prudent and keep money in your bank account for those times.
In this step, think about what you have achieved in the last 12 months (or whatever period of time is relevant for you) and consider where you want to be in the next 12 months. I have done a blog article on how to set SMART goals which you can read here
At Luna Beauty Supplies, we provide special discounts to beauty businesses, academies and students so contact us for more information!
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With Love, Ari xx
Disclaimer: Also seek financial advice from a professional. This article is not intended to replace professional advice.
