Accounting Tips for New Studio Salon Owners
Whether you’ve just opened your business or have an established clientele in a new space (read: Indie Salons!), much of your success will depend on keeping your books straight. If you’re interested in becoming a business owner, determine your accounting game plan prior to leasing a studio salon. To simplify the process on your journey toward entrepreneurship, keep a close eye on your books and consider the following tips:
Calculate Your Minimum Monthly Profit
Most talented stylists will not have a problem keeping their schedule booked. However, it’s still essential to calculate your minimum monthly profit. When you know exactly how many clients you’ll need to schedule in a month, you’ll feel more confident prioritizing purchases for your studio. We have a calculator to help you come up with your minimum monthly profit, if you need assistance.
Keep Business and Personal Accounts Separate
At the start, many stylists deposit earnings into their personal bank account and purchase products with personal funds. After you’ve begun this habit, it can be a challenge to make the transition toward keeping your accounts separate. Tax season is a nightmare if you’re using just one account, so make it easier on yourself from the beginning, if possible. If you’ve been using your personal account as a business account, it’s never too late to make the switch.
Stay Diligent About Tracking Expenses
Tracking your expenses is the name of the game when it comes to a thriving studio salon. When your schedule is booked solid and you’re logging hours behind the chair, it may seem impossible to set aside time for reporting expenses. However, this step is crucial for organization; you’ll thank yourself later. Be sure to hang onto receipts and find a filing system that works for you. Some salon owners choose to keep a physical paper trail, while others prefer a digital tracking system. Once you’ve found the method that works for you, stay consistent and keep up with it.
Use a Business Credit Card for Salon Purchases
As soon as you open a business bank account, look into opening a credit card for business expenses, as well. It’s a headache to use and document personal funds for salon purchases, and a credit card for business is often the best solution. When you have a designated card to use for your salon studio, it’ll be simpler to track what you’re spending on products and other necessities.
Track Finances With Book keeping Apps
Not a fan of traditional bookkeeping methods to keep tabs on the finances? Keep things simple and effective by using one of the many accounting apps designed for business. QuickBooks is often hailed as the gold standard of small business accounting software, but new options (like FreshBooks and Xero) have also emerged as user-friendly choices. As you track income and expenses, be sure to keep up with quarterly estimated tax payments. It’s frustrating to face a penalty for underpaying, so try to stay on top of it as you go.
Accounting can be a stressful aspect of running a studio salon, if you don’t manage it in a timely manner. Making the transition from employee to business owner comes with a unique set of challenges, but you don’t have to go through the process alone. When you become part of our Indie-preneur team, you’ll reap the rewards of ongoing business support, ample opportunities for professional education, and access to our wholesale beauty supply program (which offers additional, awesome perks!). When you’re ready to learn more about how we can help, please reach out to our team to book a tour of our premium studio spaces.