Timely Fit: The importance of cash management
Even a profitable salon or barbershop can run into trouble because of poor cash flow! We’re here with Adam Chatterley, creator of Salon Business Secrets, to help you take control of your money and make sure you’re managing your business’ cash like a boss 😎
With a background in business process management, Adam Chatterley is currently the Chairman of the Spa Industry Trade Association, the UK Spa Association, and the founder and host of the iTunes No.1 rated The Beauty Business Podcast. A man of many talents, Adam has personally opened, operated, managed, supported, and coached over 450 spas in 27 different countries. These days, he brings all that accumulated knowledge together to provide analysis, coaching and consultancy to the wellness industry via his podcast, online courses, and one-to-one coaching.
“The more you can take control of your cash flow, organise your payment dates, and bring some consistency to your income, the less stressed about money you’ll be!” Adam Chatterley
Create a cash flow forecast and check it regularly
Cash flow is simply the amount of money you have coming in and the amount of money you have going out. Money comes in from your clients to pay for the services and products you provide, and then it goes out to pay your bills
To get started, work out your expected income; including things like loads, upfront payments, grants, and other outgoings for the coming 12 months. This will form the basis of your cash flow forecast, and will help you plan for highs and lows; allowing you to promote offers at low-income times much further in advance 💸
“You can create a simple cash flow forecast easily on a spreadsheet or even better, using software that’s able to monitor the money coming in as well as the money going out” Adam Chatterley
Consider using a salon management software
Using a salon management software like Timely allows you to monitor your cash flow by monitoring your income and outgoings, and use the figures to help you make a profit. Most will also offer cash management, or a “cash up” feature as a way for you to track your finances on a daily basis.
The key with using a feature like this is to make sure it’s accurate and will balance at the end of each day, so you need to record all your transactions, petty cash, and any other details properly. The good news is that Timely makes cashup a breeze!
Boosting your cash flow
Make sure you know exactly how much each of your services costs you, and don’t be afraid to increase your prices yearly alongside the increased costs of wages, bills, and products.
Look at other ways to increase your income as well; things like boosting your retail sales, encouraging clients to upgrade their service, taking deposits, selling gift vouchers, or offering special deals can be easy ways to increase your profits. Using free marketing like social media, email, and having a great website can also be great ways to advertise your business without breaking the bank ⚡
“Shop around for the best prices for your stock and consumables, and keep an eye on other outgoings like staff wages.” Adam Chatterley
Don’t bury your head in the sand!
Always be alert to potential cash flow problems; whether it’s using personal credit cards to pay business bills or finding it difficult to meet regular payments – tackle potential cash flow problems straight away. Don’t panic though; create a realistic action plan and stay positive!
If you’re having difficulty making regular payments, e.g. for loans or leased equipment; always contact your creditors and try to negotiate lower payments on a temporary basis.
“Any business can get into choppy cash flow waters – it’s almost part of the business cycle! When this happens, your close monitoring of the situation will make sure a ripple doesn’t turn into a tidal wave.” Adam Chatterley
Want to learn more!
Adam has just launched a brand new membership programme to help make your business successful along with a special offer for Timely customers! Click here to find out more
Keen to learn more about managing your cash flow? Watch the demo on how to cash up below😎