Money can be tough to manage at the best of times, let alone when you’re trying to run your own hair and beauty business!
Luckily, there are a few simple things you can do to ensure that you stay on top of all things money, avoid any unexpected surprises that may come your way, and keep your clients happy and coming back for more.
Here are five small changes that can have a big impact on your salon’s finances.
Open a savings account
First things first – do you have a savings account for your business? No? Then you’d better open one! One of the biggest problems small businesses face at tax time is not having enough cash to cover their tax obligations.
When you’re a sole trader, it can be tempting to keep the money flowing and not worry about tax time until it rolls around, but you’ll be kicking yourself if you aren’t prepared and cop a huge payment. So, open a new account and put cash aside each week to prepare for tax time – you’ll thank us later!
Renegotiate your utilities
If you’ve been in the same location for a while, chances are you’ve also had the same utility providers (such as water, electricity or gas) too. Loyalty can go a long way, so if your provider tries to bump up prices, make sure to let your voice be heard.
You could also tell your utility providers that you’re shopping around and ask them what they can do to keep you as a customer. Best case scenario, you manage to negotiate a good price. Worst case? You find a new provider who may have a better deal for you anyway!
Challenge suppliers on prices
Again, if you’ve been using the same suppliers since day one, you may have a bit of pulling power when it comes to negotiating prices on stock. It’s best to tread a little more carefully here than with your utility providers, as your suppliers may get offended if you tell them you’ll go elsewhere. Instead, take it slow, be patient and friendly in your negotiations, and make sure to keep things as fair as possible for both parties.
Let clients choose how to pay
Have you ever made a client leave to visit an ATM so they could pay cash because you refuse to adapt to new technology and use electronic payment methods? If yes, you’re making a huge mistake!
Allowing clients to pay the way they want to is a great way to build and foster relationships, as it shows you care about making life easier for them, not just yourself. There are plenty of ways that people can pay for services, such as cash, credit card, SalonPay, ZipPay, AfterPay, OpenPay, gift vouchers and many more! Figure out all the ways that clients can pay for your services and let them choose their preferred method.
Order more frequently to help cash flow
How do you keep your cash flow flowing? It’s simple – order weekly or fortnightly instead of monthly! You can do this by keeping a close eye on your stock levels using your salon software and buying only what you need. Some items however, such as towels, gift bags, gift cards or salon menus should be purchased in bulk to help reduce costs.
Improve your salon finances with these tips
There you have it – five small changes that can have a big impact on your salon’s finances!
If you’re struggling with managing your money, start with these easy steps to get back in control of your finances and you’ll start seeing a change in your business.
For more tips for managing your salon finances, check out 5 expert tips for managing your salon finances.
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Editor’s note: This article was originally published on 5 June 2019 and has been updated for relevance and comprehensiveness.