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Free Newsletter>
8 Ways to Make Your Salon or Spa's Budget Stick!
If you've put in the work and created a budget for your
salon or spa, follow it! If you don't, you'll lose the
benefits that you planned for when you built the little
monster.
Get started by reminding yourself that your business budget
is not the enemy. It's nothing more than a set of
guidelines for your spending and saving habits. Below, are
some common problems that pop up with many budgets, along
with some solutions that can help you stay within your
budgetary guidelines.
Accept there's a learning curve - Living with a budget is
an education. Trimming your business expenses, knowing how
long income is going to last or how much of a cash reserve
to keep around will skillfully take some time. But you can
learn to adjust a budget as you go, and what was once a
shot in the dark gradually will become a more predictable
and useful exercise.
Be prepared to miss your budget estimates and act
accordingly - This is rule No. 1 in setting up your budget:
knowing that your budget projections are at best a guess
and nothing more. You're going to miss your estimates. That
doesn't make you unintelligent or a bad businessperson.
Instead, try to miss them intelligently and in ways you can
correct. For example, if you budgeted $600 a month for your
linen service and your bill consistently tops $650 - say,
for at least three months running - adjust your linen
allocation up $50. By the same token, if the bill is only
running an average of $550, you can trim your linen share.
To keep things in line as much as possible, you must
reallocate some other area of your overall budget to
account for the adjustment.
Be flexible - As with setting up a salon or spa budget,
sticking by one often boils down to a willingness to be
flexible. For instance, if your revenue doesn't match what
you expected - and there's a good chance that might be the
case - trim back your expenses to compensate. By the same
token, if you're taking in more than you anticipated, it
might be time to invest in better equipment.
Watch your cash flow - If you want to stick to a budget,
make sure that your inflow more than compensates for your
outflow. Monitor your income closely to make certain that
you'll have adequate funds to pay your bills, particularly
if your business is prone to phases of slow times. Even if
it's just from the left pocket to the right pocket,
cash-flow problems are what kill most salon and spa
businesses. Keep checking to make certain that your
revenues match or exceed your expenses.
Err on the side of conservative - When setting up your
budget, it's a good idea to overstate your expenses and
lowball your expected revenue. That approach is also a
solid strategy when making sure your cash flow is going to
hold up. Look into budget savers such as telephone calling
plans, less expensive spa equipment and other ways to
lessen the burden on your income. "People always feel they
have to have the best equipment "but money you don't spend
is money you don't have to earn."
Have a cash reserve - The uncertainty of budgeting - both
in terms of income as well as expenses - stands as one of
the biggest threats to the survival and success of any
salon or spa business. While trimming expenses to the
absolute bone is always a good idea, it's also prudent to
set aside income whenever possible. If you can afford it,
allocate a portion of the revenues you get and sock those
funds away in a money market account. Not only can that
money come in handy for predictable expenses such as
year-end taxes, it also can prove an absolute lifesaver
should an unexpectedly high bill suddenly crop up.
By contrast, if you're thinking about starting a salon or
spa sometime in the future, start saving - the money you
set aside now ultimately may bail you out in ways you can
hardly imagine.
Revisit your budget every month - This is a point that I
cannot stress enough. Go over your budget every month and
examine your cash flow to make certain your available funds
are sufficient to meet your liabilities. If you're
following point No. 2, above, and adjusting your budget as
you go, you'll have some sort of emergency fund to take
care of monthly overruns. Use it when things cost more than
you thought and put money into the emergency fund if you
come in under your expected numbers.
Get Help! - Setting up and sticking to a solid budget is
the most effective way to guarantee you will be in business
next month. Don't be afraid to turn to professionals and
outside services for help to help get you started and
making it stick.
Need A Budget???? Give us a call 248.546.4312 for your FREE
phone consultation - and learn how the SECRET can help.
theSECRET Salon & Spa by Design Royal Oak, MI 866.288.7353
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