When business owners first go into business they are excited, eager, motivated and can’t wait to get started. Then reality sits in and the bills start piling up, followed by pressure, tension anxiety. If you are like most owners you are always looking for ways to cut expenses and generate more revenue so it’s worth it to be in business.
The main reason entrepreneurs go into business for themselves is to be their own boss, have more freedom, and make more money. But here is the sad fact: in most cases business owners don’t pay themselves, they end up working harder and make less money. According to US census statistic an average business makes about 7% net profit. Yes there are some businesses that make more, some less, and some make none. Where do you stand? Are your overhead expenses diminishing your bottom line? If so, read the first of this 4 part series to learn strategies on gaining financial health.
1. Have a Budget
Most spa and salon owners who call our office seeking business help don’t have a budget. Without a spa budget, you are allowing your business to manage you instead of you managing it. Whether you have a large, medium, small spa or are even a solo-preneur, you must have a budget. Your budget should include a monthly breakdown of all your finances, such as:
- Number of spa clients you expect to see monthly
- Forecasted service revenue
- Forecasted retail revenue
- Spa product cost
- Compensation cost
- Spa Operating cost
- Spa Marketing expenses
- Budgeted profit
The key is to detail the budget as much as possible so your revenue goals are clear and to be disciplined enough to not over spend.
Want to see how healthy your business is? Take a financial assessment to see where your business stands.