With only 60 days left in 2023, it’s natural to start thinking about what 2024 will bring. What are the goals I wish to achieve? Who are the people I want to spend time with? What vacations do I want to take? And inevitably, how will I finance these things?
I don’t know about you, but my focus is fixated on achieving my dream income to live my dream life.
In our Liquid Facebook community, the past few weeks have been buzzing with discussions around financing and profit in the beauty business. A recurring theme in these discussions has been the strategic aspect of financial growth - raising rates, determining service prices, budgeting for unexpected expenses, and building a savings to expand the business. These are common questions that not just our community, but most salon owners are constantly talking about.
In this blog, I dive into the financial dynamics of running a profitable beauty business that leads to retirement using a concept I like to call the LIQUID number.
This LIQUID number isn't a random figure; it represents a financial goal that encapsulates all your personal and professional aspirations, needs, and expenses. Its when everything in your live just flows because you don’t have a worry in the world.
Understanding your liquid number sets you up with a clear and tangible target, paving the path to your financial success.
Start by documenting everything you want and need in life, alongside your salon expenses. This will provide a holistic view of your financial obligations and desires.
Salon expenses are categorized into two main areas:
Understanding this breakdown is crucial.
Add both your variable and fixed costs together and divide by the number of days your salon is open. This gives you the daily running cost. Next, divide this number by the number of hours your salon operates to find your hourly running cost.
With a clear understanding of your costs and aspirations, the next step is transforming your LIQUID number into a reality.
Now that you have your dream number and understand your operating costs, it’s time to create a strategic plan. Write down all your goals, assign a dollar value to them, and compare this to your calculated hourly rate of operation. This exercise will help you discern how much work is needed to achieve your dreams.
I acknowledge that this process might seem intricate, but I assure you, the payoff is worth it.
For those seeking guidance and a more hands-on approach to pricing, click here to join our waitlist for a resource to help you do this seamlessly.
Let slay 2023 and head into 2024 with nothing but clarity and alignment!
💜 Chrystal L.