Is it a business or a hobby?
A large proportion of you reading this will own a business, whether a high street salon - where you employ others, as a home based therapist or nail tech, or mobile/freelance. Whatever your set up it's time to consider the reality, is your business actually a business or is it just a hobby?
For some people they really want to work for themselves or own their own business, whether it is the status they think comes with that, or the sense of achievement, I'm not sure, but for some it is very important. For others, and I'm going to be blunt here, the reality is that they can't get employment in a salon because they just aren't up to scratch so they have no option but to work for themselves. Whilst for others they just cannot work for someone and want to do things their own way. However you got to the point you are at you now need to ask yourself......is this actually a business that is making money, that covers its expenses, pays you a wage, makes a profit and is growing, or is it just something you do but don't consider whether it is profitable or not?
The reality is that we all have bills to pay in order to survive, we can't pay these with fresh air and you can't turn round to your mortgage provider and say ‘oh I'm a bit short this week, so I can't pay it all', that just won't work. Therefore your work has to generate enough money to pay all of its bills and provide you with a wage that will pay your personal bills. If this is the case you have a business, a livelihood, and your focus needs to be on growing that business. If your work doesn't cover its own bills and provide you with a wage it's not a business, it's just a hobby, and whilst no- one wants to consider that their business is in fact a hobby, you have to be truthful with yourself because there is no way of doing anything about it, to change it, if you aren't . So if it is a hobby now is the time to change that!
I meet lots of therapists in my work, from mobile to salon owners and it doesn't matter what the set up is a lot of them have the common ground that they are just getting by and don't really consider their takings, their costs or their profits - if indeed there are any. I remember one salon where, and she is by no means alone, the owner just couldn't get her head around the fact that she wasn't making any money because the client was paying so at the end of the day there was money in the till. As a salon they were massively under charging, she had no idea what her product costs or other overheads equated to so therefore didn't know what her profit was. The reality was there wasn't any profit because her prices were too low and her overheads too high, but she thought she had money because there was money in the till! You need to wise up and be brutally honest with yourself, only then can you do something about it. Just because your business is a hobby doesn't mean it can't become a business but you need to change your mindset and start acting like an entrepreneur. You don't have to be Lord Sugar but you do need to start thinking more like him.
You need to look at what your costs are, can you save money on any of them? Cost each of your treatments (most manufacturers will have this information with regards t9 product costs, you will just need to add your specific over heads) and make sure that you are covering the cost of carrying out the treatment whilst keeping in line with what the manufacturer suggests. You need to look at your wages bill, if you have one, and work out if everyone is earning their salary plus a profit for you and you need to decide what salary you want/need to earn. Once you have that figure you can compare it to the turnover the salon is actually producing and if there is a shortfall you need to look at how you can increase your turnover so as you cover these costs. Look at your diary, is it full, if it's not look at ways to fill it. When was your last price increase? A small price increase is expected annually, if not bi-annually, so look at increasing your prices. Everything is going up - energy prices, fuel. For those of you who are mobile it is costing you almost twice as much to fill up. I don't work mobile but I filled my car up with diesel last week and it cost me £90! It used to cost me £53. So you need to up your ices or start charging a fee for mileage. I suggested this to a mobile therapist the other day and she said the increase cost of fuel didn't affect her as she only evermputs in £20 anyway. I was obviously confused and asked what difference that made and she said fuel was still costing her £20! I pointed out that that £20 was now providing her with less fuel......she didn't understand at first, and then the penny dropped.
If the diary is full how much are you retailing, could this be increased? If you don't retail after every treatment you do then this most definitely could be increased. You could look at introducing a new team member, if you have ansalon. If everyone is fully booked all the time and you are turning people away, but this in itself is going to increase your costs so think wisely before jumping in to do this. Perhaps focusing on the high ticket treatments and filling the days with those would be more fruitful.
And of course business changes throughout our lives. It is likely that our businesses will change with us to suit us at different times. It could be that you start out mobile as that suits your living arrangements, and expenses whilst starting out, but as time goes on it may become possible and more desirable to work from home and then maybe even into a high street salon. A large proportion of therapists and nail techs are women, who may choose to have a family, which may also create a natural change in the business for a period of time whilst your family are young.
If you have staff they may take the load off at such times, for those working alone it may be that you reduce your hours, or adapt them to suit your family life for that period of time. Working less hours doesn't suddenly turn your business into a hobby, I know may people who work less hours and still earn more money than salons and therapists working 40 plus hours a week. But these people are savvy business women who maximise their time and profitability. Their businesses funds itself and provides them with a wage.
Looking ahead, to the future, you need to consider retirement, for many of you it may be a long way off, but what is the scalability of your business. If you work alone you are the business so come retirement there is nothing's tangible to sell. You may be able to sell your client base but with GDPR and more changes that will inevitably come as time moves on, I'm not sure how successful that might be. Not having something to sell, or to run by itself in your retirement, may not worry you but you must make sure there is a pension, savings or some sort of provisions for the autumn of your years. You might retire at 66 and live to be in your 90's, how will you afford to live for those, possible 30 years?
Consider this article a swift kick up the bottom to spur you in to action and find that entrepreneur inside of you, own a successful business and keep your hobbies for your spare time.