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Steve GomezSteve Gomez
Steve GomezSteve Gomez
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Important Budget Factors For Independent Stylists

Important Budget Factors For Independent Stylists

March 17, 2018

If you work for yourself in the beauty & wellness industry then you have to be responsible for every aspect of running your salon business. While that can be daunting, what must take precedence over most issues is the ability to create a budget, maintain it and review it. This will not only help make more money but serve as a guide to troubleshoot areas that may need improvement from a financial perspective. Therefore, it must be part of your salon business plan.

So what to track? Well, there’s plenty to focus on but here’s the key budget factors that must be tracked and reviewed to insure long term financial stability.

Top Line

Start with top line sales. Track service sales, retail sales, gift card sales and client count. From these numbers you can calculate average tickets as well as retail to service percentage. Your average service ticket will help gauge if you are effectively adding on additional, relevant services. Your average retail ticket and retail to service percentage will support you to see if you are retailing consistently.

What’s most important is that if you are not tracking top line sales you will not be able to track the variable expenses we are about to review. This is because your budget goals for your expenses are calculated by dividing the expense amount in dollars into specific or total sales in dollars.

Expenses

Retail inventory: If you sell your own retail products then you have to monitor your purchasing patterns to insure you do not over or under stock your shelves. Your retail inventory budget goal is 50%. To calculate your percentage divide monthly retail inventory purchases into total retail sales.

Back bar inventory: If you are purchasing your back bar products to perform your services then your inventory goal should be no less than 5% and no higher than 10%. To calculate your percentage divide back bar inventory purchases in service sales.

Credit card processing: If you manage credit card processing on your own, your goal is to keep it no higher than 2% of total sales. To calculate your percentage divide credit card processing fees into total sales.

Marketing: Set a budget each month to invest in growing your business. Your budget should be no less than 2% of total sales and no higher than 4%. To calculate your percentage divide marketing dollars spent into total sales.

Education: Investing in your own professional development should happen every month. Your budget should be between 2-5% of total sales. Calculate your percentage by dividing education dollars into total sales.

Hourly payroll: If you have an assistant or a front desk associate that supports you then it’s imperative that you have a budget goal to insure you pay and develop them. Your budget goal is 8% of total sales. To calculate this, divide hourly payroll into total sales.

Taxes: Working for yourself means you must be responsible to track and pay taxes on a quarterly basis. While you will have various expenses you can write off to reduce the amount of taxes you have to pay it’s prudent to set aside at least 20% of sales for tax time!

Retirement/IRA: Plan for your future by opening a savings account or stashing monies into an interest baring account like an IRA. Start with 10% of total sales as your minimum goal.

Profit: What’s left after you pay your bills? Profit! But wait, be sure you set a goal to pay yourself what you need to make each month to pay your bills. Then whatever is left is pure profit which you can use to chunk down debts, re-invest in more education or add to your savings account. A good goal here is to plan on having 10% set aside above and beyond monthly living expenses.

With planning, implementation and tracking you can create a budget that works for you, that helps you make more money and keep more of it too! Happy tracking!

For more information please contact me at info@stephengomez.net. You can also follow me on Instagram and Twitter: @saloncoachSJG

 

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Steve Gomez Business Coach

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Tweets by SalonCoachSJG
You never get a second chance to make a great firs You never get a second chance to make a great first impression! 

Be sure you implement steps and guidelines that support the front desk to make specific recommendations that support cash flow growth for the business, empower them to feel a bigger part of the team and hit a home run throughout the clients whole experience with you!
A great way to elevate customer service is how you A great way to elevate customer service is how you dress and present yourself. 

Always be sharp, well-groomed and present a professional image before walking through the door. 

These little things make a BIG impression.
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A Great Way to Exceed Your Financial Goals A grea A Great Way to Exceed Your Financial Goals

A great way to exceed your financial goals is to play the Booking Game! 

Begin each day by looking at who is on your books, analyze their last 3 visits to see purchasing patterns, what they are coming in for and what you could recommend to them that can help them and help you. 

Add up what is on the day and what is possible, and you will that you can exceed expectations for them and for you!
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Improving Retail Results by Tracking Sales You ca Improving Retail Results by Tracking Sales

You can improve your retail results by tracking what you sell and what you don't. 

Notice which products you sell based on client needs, your preference and your salon's goals. 

What should you be recommending more based on the services you provide? 

When you take the time to research this you will improve your customer service and your results.

Factors to Consider in Tracking Retail Sales
- Sales volume by product
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It’s a wrap! Another successful Financial Fitnes It’s a wrap! Another successful Financial Fitness Workshop with @dmkinternational is in the books today here in Dallas! @20beautynancy and I are honored to partner with a great team of people to serve and support these awesome clinics to grow their knowledge and profits! Let’s elevate! #financialfitness #interdependentleadership #dmkinternational #dmk #dmktexas #clinicprofit #clinicfinance #elevate #liftuplife #lovewhatyoudo #speaker #author #catalyst #futurist
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The greatest use of life is to spend it on somethi The greatest use of life is to spend it on something that outlasts it. - William James

We only have a limited time on this earth, but our impact can be eternal. One of the greatest purposes of life is to dedicate ourselves to something that will outlast us - a cause, a legacy, a contribution to society.

 

 William James reminds us of the importance of using our time wisely and investing it in something that will make a lasting impact. What will you do with your time? How will you leave your mark on the world?

 

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Are you looking for the right salon, spa or clinic Are you looking for the right salon, spa or clinic to work in?

Start by finding out what their vision for the future is and what they value.

Once you know what they believe in and where they want to go will help you see if you are aligned with them.

How will they train you and market you to support your growth? Is there a pathway to increase your income based on performance? 

What benefits do they offer? 

These questions will help you get the answers you need to make an informed choice that is right for you!
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Do you have a training plan in place? Be sure you Do you have a training plan in place? Be sure you create a 12 month plan that supports you to develop yourself and your team technically, personally and professionally.

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If you are a single owner/operator... ...you sho If you are a single owner/operator...

...you should add your personal expenses in with your business expenses when you are creating your budget. 

This way you have a sound financial plan that accounts for what you need to produce to prosper.


Benefits of Including Personal Expenses in Your Business Budget
- Provides a more accurate picture of your financial situation
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- Enables you to set realistic goals and targets
- Helps ensure long-term financial stability and success
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