You may be the best beauty salon in town but how are you with your salon’s finances? If you are like most salons then I am guessing your financial management is ok but could be so much better if you had a little help. Here are five tips to take your salon’s finances to the next level.
1. Streamline with a salon management app
Nothing wastes time and money like a complicated booking or inventory system. It can also frustrate customers. The right app can save you time, hassle, paper, and money. But which app to use?
Today, there are a number of great beauty salon specific apps; we cover two below.
- Phorest is an Irish company that has taken on the world. They provide a booking system, inventory management, staff management, customer management, and even a customer loyalty scheme. They also have an online store feature that will take your products to the web.
Customers can make bookings directly from their phone and can even pay through the app. The app is specific to your business.
As the salon owner, you can use your phone to oversee bookings, sales, inventory, etc. across all your locations with a range of reports.
Phorest offers three service packages with the price provided through a personalised quote. They provide help with setup, lifetime training, and strong customer support.
- Fresha is another popular choice (previously called Shedul). It has similar features to Phorest. It does not have an online store capability but has strong analytics and reporting.
The customer app is not specific to your business but does allow new customers to find your salon through a salon search by location.
Fresha is free to use but to unlock more advanced features you need to upgrade to FreshaPlus which charges a small percentage per online booking.
2. Integrate your apps with your accounting software
Once you have chosen a salon management app you can make your life so much easier by integrating it with your accounting software. Integration may be a little tricky to set up at first but once set up it will save you time on data entry and will minimise mistakes. Your accountant should be able to provide guidance with integration.
3. Track your key numbers and set goals
Like any business to improve you need to measure your key statistics. For a beauty salon, key statistics include average customer spend, frequency of visits, and product and employee margins.
The good news is that once you have one of the apps from tip one, many of your key statistics will be easy to collect and track. Other statistics like margins will require more detailed information but a good accountant will be able to help you with those.
Once you are measuring your key statistics, the next step is to set yourself a goal for each statistic.
You can set your goals by:
- Basing it on past performance;
- Talking to friends from other salons; and by
- Talking to an accountant experienced in the beauty industry.
4. Apply the right VAT
VAT can be complicated because it can differ between your products and services. For example, the VAT for beauty salon services is 13.5% but the VAT for cosmetic sales is 23%.
Your accountant should be able to advise you on the correct VAT across your range of products and services. They can also help you configure the VAT in your accounting software. It is best not to get on the wrong side of the Revenue Commissioners!
5. Accountants: Hire an advisor not just a tax filer
Accountants are not just for tax time. As already discussed in the previous tips, a good accountant can help you in many different aspects of running your business from VAT, to goal setting, to integrating your management app with your accounting system.
A good accountant is like a personal business advisor. They are invested in you and your business and are a partner in your success. When they help you increase your profit it is a win-win.