Keeping control on business finance

The Last quarter of the year in the hairdressing and beauty industry are critically important. Hence it’s vital to have a business plan, if you don’t currently have a business plan, then spend the time developing one, it’s an essential tool and a dynamic document that will give you enormous clarity and focus of where you are heading. You should review your plan regularly, changes during the year are automatic and progress is not. Your business is constantly in a state of change, be confident but plan for possible worst case scenarios. August/September is a great time to review that business plan. As the business owner/manager it is essential to understand the cycles that occur in your business and know how to differentiate profit from cash-flow. So what exactly is a business plan? Essentially the business plan is a multi-page document consisting of three very important pages; Profit & Loss, which is the keeping score of how well the business is doing or has done; Cash-flow Forecast, which relates to cash management, answering important questions such as, can the business afford it? Have you as the business owner converted all of your hard work into a tangible asset - cash? Balance Sheet, which tells how much the business is currently worth, it’s a snapshot of how much equity the business has verses any debt. How much profit has been made or lost! Knowledge is power, by having an up-to-date accurate business plan, this will identify the past things that didn’t work and will as well give the reader informed and relevant information regarding potential business ideas for the future. The key benefits of having a live business plan can be summarised as follows:

• Keep better control of business finances and the liquidity of the business.
• Help to identify and to set appropriate business targets and objectives.
• Monitor and measure the business performance on an on-going basis.
• Decide if, whether or when the business is or will be commercially viable.
• Predict future possible scenarios and pitfalls that allows management to address them before they threaten the success of the business.
• Set out a strategy for the future of the business.
• Cost and plan training events for the team.
• Plan and get staffing levels right.
• Plan and cost incentives for the team.
• Plan to have and determine the cost of having the correct stock levels.
• Plan and cost for Christmas promotions for staff and clients.

In the hair and beauty business it’s important to finish the year strong, Success breeds success. By having an up-to-date business plan and using it, your business will be more efficient and productive. You as the owner/manager will be less stressed and giving yourself the best possible chance of achieving and activating your goals by staying financially in control keeping the business secure. David Drew has some 40 years hairdressing industry experience. David coaches and consults salon owners on how to successfully run a salon and provides business success seminars and motivation days for teams at salons across the UK, for more information about David and the services he provides visit www.impactbusinessconsultant.co.uk