Money Moves: Make Sure it Moves in YOUR Favor!

Episode 12: Money Moves – Budgeting Tips to Boost Your Stylist Business

5 Budgeting Tips  1. Pay Yourself First

• What It Means: Set aside a percentage of your income for personal use before allocating money to business expenses.
• Why It’s Important: It ensures you’re not just working to pay bills but also reaping the rewards of your hard work.
• How to Do It:
• 50% to pay yourself, 30% to expenses, and 20% for savings or debt repayment.
• Automate your savings so it’s non-negotiable.

2. Track Every Dollar

• What It Means: Know where your money is going by keeping detailed records of your income and expenses.
• Why It’s Important: Helps you spot unnecessary spending and ensures your pricing covers your costs.
• How to Do It:
• Use apps like QuickBooks, Mint, Every Dollar or even a simple Excel sheet.
• Categorize expenses: rent, supplies, education, marketing, etc.
• Regularly review and adjust your budget.

3. Create a Seasonal Budget OR Sinking Funds

•  What It Means: Plan your budget around the natural ebbs and flows of the salon industry (e.g., busy holidays vs. slow summer months).
• Why It’s Important: Helps you stay afloat during slower periods and make the most of your busy season profits.
• How to Do It:
• Save a percentage of your income during peak months to cover slower periods.
• Invest in marketing and promotions during slower times to boost business.

4. Budget for Education and Growth

• What It Means: Set aside money for continuing education, tools, or marketing that will grow your business.
• Why It’s Important: Staying ahead in your skills and marketing game keeps you competitive.
• How to Do It:
• Allocate a fixed percentage of your income (e.g., 5%) for education or business growth.
• Plan ahead for big-ticket items like conferences or certifications.

5. Build an Emergency Fund

• What It Means: Have savings to cover unexpected expenses like equipment repairs or personal emergencies.
• Why It’s Important: Protects your business from being derailed by unforeseen costs.
• How to Do It:
• Start small: Aim for 1-2 months of expenses saved.
• Add to it consistently until you reach 6 months of expenses.

Dos and Don’ts of Stylist Budgeting (5 minutes) Dos:

• Do Review Regularly: Check your budget monthly to ensure you’re on track.
• Do Set Goals: Have short-term and long-term financial goals to keep you motivated.
• Do Separate Personal and Business Finances: Open a dedicated business account to make tracking easier.
• Do Invest in Yourself: Spend wisely on tools, training, and marketing that will grow your income.

Don’ts:

• Don’t Ignore Small Expenses: Little costs like coffee runs or subscriptions can add up fast.
• Don’t Underprice Your Services: Budgeting starts with proper pricing—know your worth!
• Don’t Forget Taxes: Set aside 20-30% of your income for taxes to avoid surprises later.

Don’t Skip Emergency Savings: A financial cushion is non-negotiable.