How to Clean Up Your Money Mess and Earn MoreMar 30, 2021
Whether you are a solo or managing a team, there is a universal truth: as a spa owner, you need to learn how to clean up your money mess and earn more if you ever want to smash through that “glass ceiling” of success in your biz!
As someone who has been in the spa industry since its infancy (coming up on thirty years!), as both a spa owner myself and, now, the founder of a spa business coaching and digital services business, I have seen first-hand time and time again the problem with spa owners and money.
Namely? That managing money is not a strength of spa owners and, therefore, gets procrastinated!
In today’s blog accompaniment to my Spa Business Mastery series, which is filmed on Facebook Live on Thursdays and then distributed across Spotify, Apple Music, and Google Podcasts, I take a deep-dive into how and why you need to be cleaning up your money mess ASAP… as well as outlining actionable steps for how to start earning more, zero bookkeeping know-how required!
Money Mess Tip #1: Be Committed to Tracking Your Spa’s Metrics
Often, as a spa owner (especially when you have a team!), you can find yourself working your tail off to meet your income goals. Tracking your spa’s metrics? You feel like you can hardly track your daily to-do’s, let alone your metrics on a monthly or yearly basis!
However, this is exactly where the root of most money messes lie. After all, we all know that, to focus on growth, we need to understand the numbers. If you don’t pay attention to them and/or work to understand them, common issues like overspending, over-hiring, and late payment charges will begin to stack up.
The most common metrics include:
Retail to service ratios
Average ticket price
Client retention ratios
Number of products sold
New client ratios
Sound overwhelming? Cut the overwhelm by starting out with just the following:
Create an Excel or Google spreadsheet and add the months of the year across the top of the document in separate cells
Add total sales, retail sales, and your retail sales on the same document in a list on the far left
Track these three metrics on a monthly basis (feel free to track on a weekly basis if you’d like)
Consistently track them for a starting duration of three months to notice what is happening with it
From your results, analyze where the chinks in your finances are, what can be improved, and what correlations exist (for example, seasonality or certain services/products under-performing)
Think of it like a scorecard! This is actually a tactic that I and other spa industry leaders chat about frequently in my spa-owners only Facebook group, Spa Business Mastery.
Money Mess Tip #2: Commit to Making Slower Financial Decisions
Now, your initial reaction may be to immediately start making financial adjustments based on your findings.
Jumping into decisions without doing a 360-degree analysis of our situations is a common fault of spa owners: instead of getting sucked into an exciting new product line, new team member, or new service, do your due diligence.
Questions that you can ask yourself include:
Why do I feel the need to add a new product line, service, or team member? What is influencing my decision to do this? How immediately do I need to make this change, if at all?
Do I have any big purchases coming up that I need to budget for?
Can I actually afford to bring on that new product line, technology, or esthetician?
Slowing down your financial decision-making forces you to think more critically about your “wants” vs. your “needs”. I coach mindfulness on this topic via my private coaching sessions because I was once in your exact same shoes! I know first-hand how easy it can be to become overexcited and unwittingly add to your money mess. Slowing down before making financial commitments will ensure that you’re digging yourself out of that money hole, not adding more dirt to the pile!
#3: Commit to Getting Your Bookkeeping Done Monthly
If you can’t (or don’t want to!) do your bookkeeping yourself, I highly recommend outsourcing it monthly.
Knowing your P&L (profit-and-loss) and cash flow each month allows you to course-correct your spending and sales goals in real-time, versus waiting until the end of the year to realize that you could have made changes earlier that would save the financial headaches happening now!
Managing spa money is an extremely common struggle in the industry, so I encourage you to not be afraid to acknowledge this issue if it is a weakness of yours. You’re far from alone! As leaders, when we can be honest about what our strengths aren’t, we can start making strides towards managing our spa money more efficiently and successfully.
Clean Up Your Money Mess and Earn More Starting Today
My mantra? That what you focus on, grows.
If you know that you need to focus on your money management, reach out today to learn how I have helped spa owners just like you tidy up their money messes and leverage their earning potential.
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