Money and Budgeting is an uncomfortable topic for a lot of people – but it is imperative to the success of your business. If this last year has taught us anything, it’s that we need reign it in and take a closer look at where our money is going!
We’ve asked our Lash Line money guru and budgeting queen Cara Kapler for her two cents (see what we did there 😉).
- Develop and stick to a budget: You’re probably familiar with the saying “Failing to Plan is Planning to Fail”. This is true for budgeting with your business. If you have no plan and just expect that your business will be profitable at the end of the month, this is a sure to end up with more debt than profits. Creating a budget will allow you to track where your money is going and where you can reduce spending.
- Set money aside each month: Your business should be saving roughly 30% each month. This will cover taxes, GST, accounting expenses, savings for incidentals or replacement of studio furniture. If this isn't attainable for you, start by setting aside what you can afford and then look for ways to increase your profit margins for your services which can then go towards more savings and stability in your business.
- Accept Debit/Credit: Adding a machine, or square with a tip option is an excellent way to bring in extra income! You can use this to boost your savings. Most people tip their services providers, and being prompted by a machine for a gratuity will increase your tips 10X than if you just accepted cash. It is a small expense that will increase your profits and pay for itself in no time.
- Identify where you can reduce costs: Creating a budget and identifying where you can reduce costs goes hand in hand. Cancel any subscriptions you aren’t using. Track your inventory and be more intentional about what you need to purchase. Renegotiate your lease if possible. You can also speak to your bank to see if you can get a better credit card processing rate, or if there is an account with zero transaction fees. If you’re operating out of a large space and have room to sublet, you will be able to reduce your operating costs by taking in a renter.
- Separate Business and Personal Finances: Mixing business and personal finances happens more often than you might think. Avoid this mess at tax time and know exactly what is coming in and going out by opening a business account. Your bank may offer a business credit card and you can use this to manage and track your expenses instead of using a personal credit card. You will be able to easily track your spending and everything will remain organized, and easily accessible.
If this list seems daunting try implementing one piece of advice at a time! Small change adds up to BIG results! We hope these tips will help you to save money, increase your profits, and build your business!