If you are anything like me you opened a salon to do great work and build a team of passionate people ready to serve your lovely clients.
I didn’t even think about the business side!
Get this wrong and you will always be struggling to stay ahead of the bills and worse case scenario, you’ll have to sell the salon or walk away.
Get this right and the stress of running a salon and paying bills will be a thing of the past.
If you spend time understanding where your money goes, and control it well the salon with not just thrive, but will be a lifestyle salon and provide you with a lifestyle you would love.
LET’S TALK ABOUT THE ACCOUNTS
After starting three salons from scratch, I’ve learned first hand the headaches that accounting causes for most salon owners. It’s one of those back-office tasks that never crosses your mind when you decide to run your own salon, and yet it sucks up your day and makes running a successful salon that much harder. But there’s hope, and it starts with getting organized. Here are 5 tips that helped me overcome my accounting nightmares.
KEEP IT SEPARATE
That new pair of shoes is not a business expense but your business credit card was handy so you used it. Sure, you can pay back your business for a personal expenditure, or the other way around, but if you’re going to do it right you actually have to record an accounting transaction. Things get complicated fast, and you don’t need that headache. By keeping separate bank and credit card accounts for business and personal, you’ll save yourself hours of work and make it easy to keep track of deductible expenses in one place.
KEEP IT SIMPLE
Collect your receipts (these are like cash tokens, that at the end of the year you are going to cash in and get some money), pop them into an envelope at the end of each week, write on the envelope what is inside, the amounts and what it was for. Write the month on the envelope also. At the end of the month add all the entries on the envelope into your accounting system and just hole punch the envelope and pop it into an A4 binder, job done. On that note, the cleaner your records, the fewer billable hours you’ll have to pay your accountant, so make sure you’re organized year-round.
PENCIL IT IN
Actually, use a pen. Set aside about 15 minutes every week — that’s the equivalent of just one Facebook visit every seven days — to organize your finances, and don’t let other things take priority during this time. You’ll have more insights into your business, be able to make more informed financial decisions and have everything organized when tax time approaches. Something always feels more pressing than your finances. But when you find the time every week, you’ll feel your stress levels — now and at year-end — fall fast.
CONSIDER YOUR PEOPLE
When you’re looking for insights into your businesses spending, don’t forget to properly track what is likely one of your biggest expenses: staff. Whether you’re paying a full staff or you’re the only one on the payroll, make sure you’re tracking the costs of wages, benefits, overtime and any other costs associated with staffing your salon. By tracking your spending on wages, you may find you have more money to incentivize your employees — or that you’re outspending your budget. Either way, doing the math now can help you make better decisions later.
FINALLY, DON’T FORGET TO GET PAID
This one seems pretty obvious, but you would be shocked at how many salon owners pay themselves last.
You must pay yourself first, because that way you’ll know if you have enough money to employ someone else, have that new reception desk or even close certain hours.
Once you have paid yourself well then you can look at employing more staff and growing.
You are running a businesss.
Do it well and it will serve you well.
‘The Lifestyle Salon Coach’
If you’re interested I’m holding a webinar on Monday 15th April at 7:00AM (NSW, Australia). I will explain about what we do at Lifestyle Salon Systems and there will be a Q&A session at the end. Please make some time to join me; you can secure your place here