Finance and budgeting

Where did all my money go?

8 May 2019 by Marie Drever

Do you get to the end of every week and think: Why is there nothing left in the bank for me? You’re not alone – it’s a common experience for many salon, spa and clinic owners. The good news is, you have the power to change the way you experience money in your business.

Start by looking at the financial traps that keep you stuck in this negative money loop. If you’re unhappy with your financial position, whether you earn $100,000 or $20,000, you need to think about your spending habits.

Money is often linked to our emotions. You’ll recognise the symptoms: shopping for whatever tickles your fancy and makes you feel good. Clothes shopping does it for me.

Begin by working out your triggers:

  • I had a bad day
  • I’m nowhere near my credit limit
  • Buy now/pay later options
  • I’m bored – let’s shop.

Then set a solid foundation for improved spending habits by changing things up in your salon, spa or clinic in these six key areas.

1. Know your numbers

Knowing what it costs to open your door every day is the key to a successful business.

You don’t need to feel blind-folded, overwhelmed and forever wondering where to start. You don’t need to drown under a pile of overdue notices and live in fear of ‘no caller ID’ calls from people you owe money.

Start by putting together a weekly break-even budget so you know exactly how much you need to make. Then break it down to a daily budget by dividing by the number of days your business opens each week.

2. Control your stock.

When was the last time you reviewed the volume of stock you keep for in salon use?

Why are you stocking multiples of an item that lasts two months? Most salons can order stock and expect delivery within one to three days. Learn to leverage that turnaround.

Think of your product stock as money sitting on your shelf. Most salon, spa and clinic owners can’t afford to have big dollars locked up in stock. And smaller orders and invoices are much more manageable.

If you stick to a stock budget, you’ll know exactly what you can spend. No more wondering how on earth you’re going to pay for your order.

Some things to think about:

  • Do you use a stock control book or your software system to track your stock levels? Maybe change it up.
  • I often recommend a stock budget set at approximately 10% of your weekly turnover. This figure includes product purchases for both retail and in-salon use.
  • Be patient. It will take a few weeks to find good flow with a new stock system. Some weeks you’ll go over budget and some weeks you’ll be under. The key is to get started, understand how your budget works, stick to it like your life depends on it and keep going until it becomes a seamless process.

3. Understand the true cost of wages.

Wages for your team don’t stop at the net amount you deposit into their bank accounts each week. It’s about the overall employee costs you’re accountable for. These may include:

  • taxation
  • superannuation contributions
  • workers compensation insurance
  • other insurances
  • bonuses (when targets are met)

When you’re thinking of recruiting a new team member, you need to really do your numbers on the total costs involved. Otherwise you’ll fall short each week and find yourself back in struggle street.

Think about opening a special bank account. Each week, once your pays are done, transfer the extra costs for each employee into the account. Then you’ll have the funds there waiting when you need to make the relevant outgoing payments.

Sure, it takes a little extra time but after a few weeks, you’ll know the figure and be able to set up a recurring weekly transfer.

4. Review your rent or lease arrangements

Whether you’re renting week-to-week or on a lease arrangement, nothing is forever set in stone.

Have you considered moving when your lease ends or putting together a plan around purchasing a property to run your business from? Sometimes, these types of big changes are within closer reach than you think.

If, like many salon, spa and clinic owners, you struggle to put aside money for rent from your daily takings, put a new plan in place. You could discuss with your landlord about converting your monthly rent and outgoings into a weekly payment to help with your cash flow.

You might even initiate a discussion about reduction of your rent. It’s always worth asking – if you don’t ask, you don’t get.

5. Plan to meet your tax liabilities.

As we all know, you must pay taxes. It’s non-negotiable. Yet, from day one, most business owners don’t have a plan for putting aside money to cover their tax liability on business profit and for GST/VAT. Most don’t give it a thought until that first tax return’s completed and they’re whacked with a big bill.

When it comes to tax, your accountant is your best friend. Chat to your accountant about tax planning and how to put aside a weekly set amount so you’re prepared when the taxman sends you a bill.

6. Smooth out your quarterly and monthly bill payments

Make time to sit down and call your bill providers like electricity, gas, water, accountant, phone and internet provider.

Each of these bills can be worked out and paid as a weekly amount. This way, you get to enjoy the best of feelings: when your electricity account arrives and shows you’ve already paid it!

No surprises. No getting behind. No sinking feeling when you fail to pay that whopper of an invoice and your phone and internet get disconnected.

Get these six areas sorted and you’ll change the way you think about money in your salon, spa or clinic business. When you know where every dollar is going, you can confidently plan for a profitable business with you as the priority to be paid weekly.

For more salon wisdom email ZING Coach Marie Drever or visit

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