Stylists and beauticians dedicate their professional lives to making other people look and feel their best – but how do you meet your own financial potential? We’re accountants who have worked with many beauticians in the past. Here are our top tips for financial management.
Create a budget, stick to it and refine it
In the same way that you plan out the perfect hairstyle or makeup for your clients, it’s essential to plan out your finances – planning ahead helps you understand the risks and opportunities ahead, ultimately letting you make the right decisions for the business.
So, take the time to create a budget that outlines your monthly income and expenses. This will help you understand where your money is going and where you can make adjustments to save or invest. After that, return to your budget periodically and make adjustments where needed based on your past experiences.
Track your expenses
Now, you don’t need us to tell you this, but it’s more than a good idea to keep track of every single penny that you earn and spend. By monitoring your spending habits, you can identify areas where you may be overspending and find opportunities to cut back smartly.
You can use an old-fashioned Excel sheet to keep track or one of the many budgeting apps that work on both computers and smartphones. Alternatively, you could hire an accountant or bookkeeper to do it all for you.
Set financial goals
Whether it’s saving up for new salon equipment, a new location, establishing an emergency fund or just saving up for a personal holiday, it’s good to create some financial goals for yourself so you always have something to work towards. You might be surprised how much that can motivate someone.
You might want to break down your goals into smaller, achievable milestones, and track your progress along the way. That will help keep you motivated and focused on your financial success.
Diversify your income
As a beautician, your income will probably fluctuate from month to month. Therefore, your core business idea might not be enough to provide you with the stability and security that you want.
In that case, you might want to offer additional services, sell retail products, or even offer workshops in your area to teach your expertise.
Similarly, make sure that you keep investing in yourself by enrolling in courses, workshops, and certifications to enhance your skills and expand your knowledge base. Not only will that make you a better beautician, but it could also lead to higher earnings in the long run.
Think about your taxes
Remember your taxes! As a self-employed beautician, you’re responsible for paying your own taxes. The good news is that there is always an accountant willing to help you out and apply for tax relief to save you some money.
You also need to save up for your tax bill, because it can be a bit of a shock the first time you’re told you owe thousands of pounds – even if you knew it was coming.
Protect yourself with insurance
Accidents and unexpected events can happen, so you need to protect yourself and the business by getting the right insurance coverage. You can start by looking up options for liability and property insurance to safeguard your assets and income.
Plan for retirement
You know the line accountants and pension advisers always say: “It’s never too early to start saving for retirement.” The more important thing for us to say is that, as a self-employed individual, you’re not automatically enrolled in any pension scheme. How much you put away and when is completely your responsibility—get on the phone with a pension adviser right away to understand your options.
Need help with your finances?
As accountants, we’re not your average number crunchers. As a team that has been working with beauticians for a while now, we know how to help you build your business to the level you want it to be.
From managing your expenses to optimising your tax strategies, we’ve got you covered.
Contact us to discuss what you need help with.
