Once you have conceived the iconic idea for your stellar product and prepared a tangible roadmap for your business, the next step, which is the hardest for most small business owners, is to manage your finances.
Making a budget exclusively for your business is a smart way to manage your finances. Just like your personal budget, your business budget would be an organized summary of your cash flow, both incoming and outgoing.
By maintaining a budget, it’s easier for you to keep a record of your investments and assess your profits. Moreover, a budget is an excellent evaluator to calculate just how successful you are in following the business roadmap and smart goals you established for yourself while starting your venture.
Here are seven clever and smart ways to budget your beauty business finances. Following these will ensure that things operate smoothly and strategically in your accounts department.
Evaluate Startup Capital
As soon as your business roadmap is done, carefully evaluate the amount of capital required for starting your business. Factor in design and production costs, building/showroom rent, the wages of staff you will hire, and marketing costs. Make sure you have enough funding for a year in hand before you initiate your project.
Hire a Professional
No matter how small your business is, hiring a financial planner to design a budget for your business is always helpful. A professional can kick start things by calculating your startup investments and managing Excel sheets or cash registers to document weekly and monthly expenditures. They would also be in a better position to help you set your profit goals for the next few months, so you can deduce your market position.
Factor in Small Expenditures
Everything—including the amount you spend on fixing the coffee machine for your workplace—must be entered in the expenditure sheet/register. This will help reduce vague miscellaneous expenditures that could sum up to a considerable amount by the end of the month. This will also keep you vigilant about spending your money on things that might not be as necessary for your business as you think.
Monitor Taxes and Loans
If you have started your enterprise with a business loan, of course, you have to pay it back. Make it a point to separate your taxes and lender’s money each time you sit down to calculate your profits. Make it a monthly priority to keep things running smoothly and without any debts piling up on you.
Review Your Good Sales Months
Within the beauty industry, sales are very seasonal. It’s natural for your product to do better in the market during festivals or holiday seasons. Keep track of your profits during your ‘on’ and ‘off’ seasons, and work with your marketing team to transform your ‘off’ seasons into your ‘on’ seasons. #goldminestrategy
Draw a Monthly Salary
When it’s your startup, you obviously don’t need to draw a personal salary. By drawing a monthly salary from your business account, just like your other staff, will actually help you hold yourself accountable and keep you away from spending a huge quantity of profits on yourself. For a startup, most of the profits must be invested back to the business plan.
Vigilantly Monitor Your Goal Profit
Always keep a figure as the ‘ultimate goal profit’ in your business plan. Make sure you stay close to that goal most of the time. The constant failure to match the goal figure will indicate if you need to seriously review your roadmap and business plan. It’s the best way to evaluate the success of any small business in its first few years.
About the author:
Monet Colbert is an entrepreneur and beauty professional with the passion to help others find their destiny in the beauty industry. As a former educator for the L'Oreal brands, Redken & Pureology, makeup artist, hair stylist, fitness competitor, model, writer, actress, wife, and mother of two, Monet packs an entrepreneurial punch to the beauty business as a brand strategist.
Her career in the cosmetology industry has made her an expert in hair care and makeup. Her journey up the ladder gave birth to her motivational book, “Shear Destiny.” She has also created her own cosmetics line called “Shades of Monet,” which represents all the shades of the color palette that we experience in life's journey. Monet believes that it's a natural part of the cosmetology industry to focus on external beauty. However, Monet shows how determination, persistence, and faith can be a testament to how beauty can really be defined from the inside out.
Focused on creating a motivational brand with purpose, not just profits, Monet's mission is to use her brands, social markets, and relationships to bring awareness to human trafficking, a subject matter that’s close to her heart. Full of life, determination, and passion, these are the many . The question is... which Shades of Monet are you?