Money Management Tips for Salon Owners
Here’s an important list of things you should be doing in your salon business, in order to effectively manage your finances!
• Proper Accounting – A salon owner will almost always benefit from using a good bookkeeper who can keep your finances in order – the money you pay will be worth the time you save, and getting it done right. It’s never a good idea to get on the wrong side of the tax man, so always ensure your tax is paid up to date.
• Review Costs – Be aware if you’re bleeding money unnecessarily. Keep track of all your expenses – they can add up quickly and it’s important to be aware of where your money goes. Pay particular attention to balancing your till at the end of the day if you handle a lot of cash. If it does not add up you need to investigate – either you’re taking from it and “living out of the till” which is a very bad way to do business, or you need to tighten up on your internal salon security to ensure nobody with access to the till, is helping themselves.
• Financial Projections – Making realistic projections can really help with anticipating future problems and planning for further growth. If you have a salon software programme it can be extremely helpful with this. Another useful way is to look back on your old business records from last year, see where you are at the same time this year, and this can then help you plan for next year.
• Keep a Separate Business Account – mixing business and personal money is a recipe for unexplained losses and tax problems.
• Pay Yourself First But Stay Frugal – You need to get in the habit of setting money aside as this also tests the profitability of your salon. However, especially when you are starting out, keep your salary as low as possible so that you can create a cushion of funds in your business.