Managing Expenses & Costs for Salon Owners
The business side of the work you love can be a big learning curve for salon owners and we are here to help make that transition smoother - and keep your hard-earned money in your pockets! Managing expenses and costs is essential in the salon industry, ensuring financial stability, profitability, and long-term sustainability so you can build a legacy.
Here are some first steps to handle expenses and cost management successfully:
Budgeting
Create a budget you’ll actually use, based on your data from your financial reports. Find a good budgeting app that works for you.
Track your planned and actual numbers, regularly reviewing and adjusting your budget as needed.
expenses & Tax deductions
Keep an eye on salon industry expenses such as raw materials, labor, technology, and overheads and analyze the numbers with your budget, finding ways to reduce costs. Cut costs on anything you’re not using or doesn’t have a good ROI - subscriptions, products that don’t sell well, etc.
Save your receipts in whatever system works for you and keep track of all expenses for the highest level of tax deductions.
Negotiation and Vendors
Negotiate contracts with suppliers to secure competitive prices.
Build strong relationships with vendors and take advantage of bulk purchasing at discounted prices.
Inventory Management
Implement an inventory tracking system to avoid overstocking and minimize carrying costs.
Create checks and balances to protect your business. Don’t have employees counting inventory - this can be a conflict of interest and increase issues with theft.
systems and operations
Create efficient processes and workflows to eliminate waste and reduce unnecessary expenses, encouraging a team effort among employees.
Get systems in place for everything from the hiring/firing process to dealing with client complaints.
Technology
Use software to keep communication organized, automate tasks and streamline operations.
team culture
Share your vision and mission often, so everyone’s invested in it and motivated to operate as a team for everyone’s benefit.
Train employees to take ownership and accountability for cost-conscious decisions.
your finance team
Know your numbers and spend time understanding your monthly reports (your P&L and Balance Sheet are key reports) to make data-driven decisions in your business and identify patterns, and areas for improvement.
Keep accurate, up-to-date books to hand off to your tax accountant (CPA) during tax time.
cfo consulting for longterm planning
Build a recession-proof business and have plans in place for any economic climate.
Track and monitor key performance indicators (KPIs) to assess cost management effectiveness.
Do what you do best and outsource the rest. Hire a finance team that knows your industry. Get a free estimate today.