What Figures Should You Be Looking At?
In business, knowing your figures is an absolute necessity. I don’t think that’s a particularly bold thing to say, but, as I’ve learnt during my time as a consultant, you would be surprised at how many salon and clinic owners just do not have a handle on their figures!!
Now, admittedly, I doubt any of us got into the beauty industry so we could sit and pour over our business figures all day every day, that’s what our accountants are for… Right?
Well, that’s both true and untrue. We must be accountable ourselves too. If you don’t know what you’re operating at, and what you’re trying to achieve, how will you ever get there? However, we should also have an accountant handling and overseeing our figures for us. How often have you set time aside to do your accounting, only to spend those hours doing anything but your accounting?
So, if you shouldn’t be doing all your accounting yourself, what figures should you actually be looking at?
Recently, I interviewed Chris Cheeney, a dedicated salon accountant with experience of doing accounting for his own salon and many others. I asked him this question and here’s what he had to say:
“…It’s not all about turnover… lots of people I speak to say ‘well I want to turnover £1 million.’ And I just say ‘why?’ and they don’t usually have an answer…
I very often do an exercise with them, I say ‘would you like to have £50,000 profit in your business?’ so, I say ‘let’s see how easy it is to make £50,000 profit’. I ask them to get a calculator and put in £50,000 and divide that by 5%… they need to generate £1 million for them to hit a £50,000 profit and that figure really scares people.
When I flip it around and say ‘do that same sum, £50,000 divided by 20%’ they only need £250,000 in revenue which is far more achievable”
You can watch the full interview HERE on my YouTube channel
This was the first video of a fantastic video series that I did with Chris, tackling the common questions that many salon and clinic owners have when it comes to their accounting.
Here are the 5 Other topics we cover
1 – What is My Business Worth?
2 – How Much Do I Need to Make?
3 – How Often Should I Look at My Figures?
4 – What Can I Do? What Should My Accountant Do?
5 – What Do I Do if I Get in a Pickle?
If you want to watch the full series of videos you can find out how to do so on this page
Chris was also kind enough to do this month’s business bundle on beauty directors club, in which he tackled how you can effectively double your profits within twelve months in just a few simple steps by implementing small manageable changes.
It builds on absolutely everything that is covered in this series and includes plenty of tools and worksheets to help you along the way.
You can sign up for Beauty Directors Club today for 14 days for just £1
Here’s to your business success!