We previously discussed mistakes that hair salon owners make when running their business. This included two parts: Part 1 focused on employees, while part two focused on advertising and promotion. As we continue our series, part three looks at money management.
Understanding cash flow.
Too many businesses do not understand the finer details of cash flow. It is all well and good having money come into your till, but where is it going? Bills, rents, wages all come out of this little till, and if before you know it, your sales are gone. It is important in this regard to quickly learn the regular flow of your monthly expenses and income. Keeping records of what payments come and go, and the expenses will help you plan out what is coming and, most importantly, gain full control of your cash flow.
Focus on what makes you money.
You have to look at the bread and butter of where your income is coming from – and focus on it. If you are making most of your income and profits from cutting hair – then put your energy in that. If you find out that nails are the new thing and invest in, only to find out that you’re losing money, then you would have wasted time, money and energy. Understand where your income is coming from – and focus on that.
Extend if the research backs it.
If you are looking to add another option to your salon – like manicure or pedicure – then conduct the research beforehand. Look into if your customer revenue will be increased, and what the bottom line is going to cost you (wages, equipment, training etc). There is nothing wrong with adding another option that your salon – just make sure it is worth it.
Don’t overspend on the brands.
Everyone wants the best brands on the market – but is it worth it? Remember that when it comes to brands, having the best helps, but look into the overall cost of what it is going to cost you. Don’t get fooled into gimmicks and advertisements.