If yes, you must have already realized how important it is to know how to manage your salon finances.
Running a salon brings with it tremendous responsibility, numbers & figures.
Leaving the job of numbers in an expert's hand may be the best idea & solution.
But as a salon owner, being aware of the basics will not harm you & your business but only add value to your salon.
Building a financial plan is divided into three parts -
Having a budget.
Knowing your expenses.
Knowing your income.
A financial plan is equally important for a salon owner, just like other salon activities.
Below are 9 points that will help you build your BUSINESS FINANCIAL PLAN.
Keep your salon costs lower than your revenues.
Keep your costs in check. Follow the simple rule: if my cost increases, is my revenue increasing too? If not, then there is trouble ahead.
Know your monthly expense well.
For all your fixed or variable costs, you must be able to predict them & therefore plan them accordingly. It helps you budget & manages your expenses & be ready for what's coming.
Know your business in & out.
Do you know which is your best-selling service & product? Where is your most revenue generated from? This information will help you plan your business to create better profits.
Do you have enough cash flow?
Having cash in hand, also known as liquid cash, is essential as it helps you in unforeseen circumstances or growth opportunities.
Make your payments on time.
Staff payments and vendor bills, make sure you pay them as the due date is. Do not build on or pile up costs. This will only upset your finances & build in your debt column.
Have growth plans.
To grow & keep evolving is the purpose of a business. Have financial growth plans to invest profits into the business to build your salon and increase your earning opportunities.
Are your taxes in line?
Working on the GST and filing taxes may seem tedious, but it is part of the business. Always keep your paperwork updated & submit them on time.
Review your Financial plan & budget.
If it's a sound financial plan, it won't be constant & consistent. The salon business is quite dynamic. Keep updating your financial plan regularly to keep up with the changes & trends.
Set your financial plan ahead of time.
A plan is essential as it gives direction & a purpose to achieve a goal. Setting financial goals will help you move towards keeping your business profitable.
Get your answers to these nine questions, and you may build your financial plan with ease. Being aware of these 9 points will keep you well informed about the financial happenings of your business, and the way it's moving ahead, thus keeping you well prepared for the upcoming events - good & bad both.