If you’re building a busy business then you’re starting to make more money. Congrats! Now the real challenge begins….saving some! I built a successful company and ran it into bankruptcy and had to rebuild it again because I didn’t practice or master the art of saving money and making it work for me.
If you’re a technician or an independent stylist here’s 3 steps you can take to save money:
- Have a budget! Email me directly and I will send you one for free! Carve out time and get organized. When you see what you need to bring in monthly and compare it to what you bring in now you can set a goal to increase cash flow and take additional income and sock it away.
- Save your tips! Put your tips in a savings account. Save 25% of it for taxes and take the rest and open an IRA to start saving for your retirement. If you take this one step, pretty soon you will adjust to not living off of your tip income and feel empowered to watch that nest egg grow!
- Don’t bundle services! Charge ala carte prices. You’re clients trust you and are loyal to you, there is no reason to discount your services. Value your time and your expertise and charge the right price for what you provide people. This additional money can make a huge difference. It also can free up some time in your schedule to have more balance or to fill in these spaces with customers willing to pay you what you are worth.
If you own the salon or spa here’s 3 steps you can take to save more money:
- Sell more retail! After restocking shelves (50% budget), paying commission (no more than 12% and includes payroll tax) and accounting for credit card processing fees (2%) you should have a 36% profit for every bottle sold. Yes, $36 for every $100 dollars sold. If you take this money and pay other bills with it you are taking your future retirement savings out of your own pockets! Track this and create a plan to grow service sales to recover this money and, over time, you will pay yourself back!
- Manage Gift Card income! Track your gift card income. If you redeem less than 100% of the monies you have an opportunity to save money. If you sell $100 and redeem $50 on average then that leaves you $50 left over. Keep this money in a savings account. Every 90 days take half of this money and put it in an IRA. Leave the other half in the account to cover sales variance and for emergencies.
- Pay yourself! So many owners do not take a paycheck. They hope there’s something left over at the end of the month. If you need $2,000 a month to handle personal expenses in your life than set a goal to grow your sales to cover this amount of money. This will then leave what is leftover on the bottom line as true profit for your business!
You work too hard to not have your money working hard for you! Take these above steps and be patient, they need your attention and follow through. If you are stuck on any of this and need further support, reach out to me at firstname.lastname@example.org and I will help you. I also recommend going to my store and ordering my book, Financial Fitness – System To Increase Profitability In Your Salon Or Spa. Take the time to learn how to manage your money. You deserve the very best!
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