Next time you are thinking about planning out the financial future of your salon, spa, or clinic, ask this simple question: Do I earn enough money from my business to live the lifestyle I want and to plan my financial future and retirement?*
The Importance of Intentional Financial Planning
Planning is often overlooked or done too hastily, with many business owners quoting that they don’t have the time or energy to plan. Furthermore, a massive 47% of salon owners state that financial planning is the most difficult aspect of managing finances for them. However, reviewing your goals and examining the numbers and strategies that drive your business is the best way to set yourself up for growth.
As well as this, costs are continually rising, meaning there’s a good chance your profit is being squeezed. Is this something that you’ve adjusted your pricing or business strategy to absorb now and into the future?
While it can be overwhelming to start planning, talking to an accountant can help you put your numbers together on how much you need to run your business successfully, and your Independent Financial Advisor can help with pension planning. Once your accountant has an idea of how much you need to retire, they can devise ways to help you achieve this.
Closing the Gap Between Your Dreams & Reality
Once you have your magic lifestyle number (the amount of money you’d ideally like to save for a certain goal, such as retirement), you can examine your current situation to identify the gaps between your dreams and reality. After you’ve identified those gaps, you can start working on how to close them.
With this in mind, here are some questions that can be helpful to ask yourself;
- Are my stylists bringing in enough money for the wages they’re on?
- Do I need to raise my prices this year?
- Can I find new suppliers with better prices, without compromising on quality?
- What stock and equipment are required to fulfil my goals?
- Can I achieve my desired figures with the resources I have?
Once you decide on the sales figures you want to achieve, it’s vital to consider: “How do I get there?” Don’t jump into anything; this is all part of the planning process! Asking this question allows you to work out the differences that small, incremental changes can make to your business. It also helps you manage these changes more effectively.
Reaching Your Financial Goals
To reach your financial goals, consider:
- How would your profit look if you increased prices up by 10%?
- How could you encourage clients to come back more often for their treatments?
- The benefits of your low-utilisation team members being 5% busier?
When engaging in financial planning, the idea is not to throw money at your issues but to look at the easy fixes first and build from there.
Pssst; Phorest have a range of reporting, staff management, and client management features that can make financial planning and reaching your dream profits so much easier!
Interested in Working With Me?
I have a neat little process I use called ‘Business Potential,’ where I help people translate their goals into an action plan. To help, I’ve got three Business Potential Reviews to give away for free (normal price £895 + VAT). The first three salon or spa owners to email info@murrayassoc.co.uk with the subject line; Business Potential will get one for free.
Want to claim your Business Potential Review?
*(ie your pension or investments)
