Vorke Kalusi, founder of beauty business resource, Beauty Hunt UK, serves up financial insight…
Understanding finance terms
- Revenue: The money you make from your services.
- Expenses: The costs of running your business, such as supplies, rent and utilities.
- Profit: The money left after paying your expenses. Profit = revenue – expenses.
- Cash flow: The movement of money in and out of your business. Positive cash flow means you have more money coming in than going out.
- Budget: A plan for your income and expenses over a period of time.
- Tax: Money you must pay to the government based on your earnings.
Financial points to consider for your business
- Initial costs: Starting a nail business requires an investment in tools, supplies and a space in which to work. Make sure you budget for these.
- Ongoing costs: Regular expenses include buying products, maintaining equipment and paying for utilities and rent. Keep track of these to ensure they don’t exceed your income.
- Pricing your services: Set your prices to cover your costs and allow for profit. Research what other nail artists in your area charge and consider the quality of your work and your level of expertise.
- Emergency fund: Save money for unexpected expenses or slower business periods. An emergency fund can help keep your business running smoothly during tough times.
A financial checklist for nail & beauty pros
- Bookkeeping: Bookkeeping is how you record the money coming into your business (from clients) and the money being spent (your expenses). Use software, a spreadsheet or hire a bookkeeper to help manage your finances. Good bookkeeping will help you understand your financial health and make taxes easier to calculate.
The Beauty Hunt’s Bookkeeping Spreadsheet is specifically designed for beauty professionals to make financial management easy. It is available via www.beautyhunt.co.uk
- Taxes: Understand your tax obligations. This includes income tax and possibly VAT if your business is large enough. Keep receipts and records of all business transactions.
- Pricing strategies: Set competitive prices for your services. Calculate the cost of materials and time spent on each service. Don’t undervalue your work, but also make sure your prices are reasonable for your market.
- Savings & investments: Set aside a portion of your profits for savings, as this can help you reinvest in your business or save for personal goals. Consider investing in training or new equipment to improve your skills and expand your services.
- Insurance: Protect your business with the correct insurance. This might include liability insurance to cover accidents or damage and health insurance for yourself.
- Managing debt: If you need to borrow money to start or grow your business, do so wisely. Understand the terms of any loans and make sure you can manage the repayments without jeopardising your financial stability.
- Continuous learning: Stay informed about financial management. Enrol on courses or read books on small business finance, as knowledge will empower you to make better financial decisions.
How to do bookkeeping
1. Keep it simple: Use a spreadsheet or app to record your financial transactions. The Beauty Hunt’s bookkeeping spreadsheet is easy to use: just fill in the blanks!
2. Write it down: Record every time you get paid or spend money, and keep your receipts. Our spreadsheet makes it easy to input your income and expenses, so you never miss a thing.
3. Stay organised: Keep all your money papers in one place, so you can find them when you need them. The Beauty Hunt spreadsheet helps you stay organised by neatly categorising transactions.
4. Check your calculations: Make sure your records match up with your bank statements, so you can catch any mistakes or problems early. Our spreadsheet does the maths for you, meaning you can be confident in your numbers.