How does a spa owner get paid when employees, vendors, and landlords take a huge chunk of your revenues? For many entrepreneurs, there’s not enough money left at the end of the month for their own paycheck.
The spa industry is a traditionally difficult industry to make a profit. Add to that, most spa owners are not financially literate. When you pair up financial illiteracy with an industry with a low-profit margin, it’s a recipe for disaster in which many spa owners find themselves.
We are so passionate about our industry. We are so passionate about giving to others and being in service to others, the sad truth is many spa owners are working for zero compensation. And although honorable, they need cash to not only support their families; they need cash to be able to serve our community in bigger, more profound ways.
If you can't get a paycheck, what are you doing? How will you ever use your purpose to have a profound impact on your community?
This was a big huge question for me about 15 years ago. It was right around the same time where I wanted to sell my business and realized it was financially worthless. When I finally decided to get serious about my business, I attended Neil Ducoff's Incubator (a four-day salon business boot camp). At the time, it was the only salon/spa related business training in North America that was truly innovative for making changes in your bottom line & your company culture. And was where I finally realized the path to paying myself every two weeks was to budget for it. It’s not that budgeting is that difficult, I honestly just didn't look at my paycheck from that perspective.
I looked at my wages as everything else gets paid first; I have a team that I was responsible their salaries, I had vendors and rent that I was responsible for paying, plus I had a husband at home that was wondering when I was going to bring in a paycheck.
It was only when I started understanding and working at my cash flow forecasting that I realized this tool, this worksheet, was my ticket to get paid.
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I simply budgeted in how much I wanted to pay myself every month.
From there I created my sales goals based on that budget and with strategy & focus, I hit those sales goals. My team hit their sales goals and received a monthly bonus (I had converted to Team-Based Pay. Check out strategies.com for more info on this compensation program) and I was a very happy spa owner.
My team was making money. My company was making a profit. And I was able to finally take a paycheck.
If you're not able to pull a paycheck yet, the first thing you need to be looking at is figuring out how to create a cash flow worksheet for your spa business.
If you don't know what cash flow forecasting is, I'm running an online course called Cash-Strapped to Cash Flow in April 2016.
You can do this on your own if you are really motivated and want to get cracking on getting paid. Research and download a free cash flow worksheet online (in Cash-Strapped to Cash Flow, I give you a copy of a spa specific cash flow worksheet but there are free general spreadsheets available on the internet). Use this worksheet to start budgeting what you want to take for a paycheck every month, then create your sales goals based on that budget.
That's how you get paid as a spa owner; budget your wages and strategize how to hit your sale goals. It’s not complicated, but you will need to get organized with your revenues & expenses and stay true to your budget.