[00:00:00] Antony Whitaker: Hello and welcome to today's episode of the grow my salon business podcast I'm your host Antony Whitaker and it's great to have you here with us today. Thank you for the compliments regarding the podcast I really do appreciate it. And if you're one of those people who haven't yet left us a review for the podcast I would love it.

[00:00:22] Antony Whitaker: If you did ratings and reviews are Extremely helpful. And they do matter in the rankings of the show. And it certainly helps other people to find the podcast. I also love to hear what has been helpful to you. All you need to do to leave a review is go to the Apple podcast app, search, grow my salon business, scroll to the bottom of the page and leave us a review.

[00:00:43] Antony Whitaker: And you would make us very happy. So with that said on with today's show being in business isn't easy. In fact, let's just say it like it is being in business is bloody hard and it's not about to get easy. So stop waiting for it too. Now, having said that, being in business also brings with it opportunities for personal and professional growth, as well as a sense of control and the opportunities for financial gain.

[00:01:14] Antony Whitaker: But there's also the flip side of financial gain, which is obviously financial loss. Now, I'm sure you've read about or heard people talk about the statistics for the failure rate of small businesses. If you haven't, just Google small business failure rate and you'll see that there's plenty of data about it.

[00:01:33] Antony Whitaker: Now it will vary a little from country to country and depending on what you read, but they all Unanimously agree that the chances of success with any small business are stacked against you succeeding. And yet, obviously, many small businesses do survive. And not only do they create employment for the people who work there, but they also generate a good income for the owner and profit for the business that allows it to grow.

[00:01:58] Antony Whitaker: So the obvious question is, why do some succeed? When so many fail, I think the answer to that question is in the expression that just because you're good at the work of the business, it is no guarantee that you'll be good at managing a business that does the work, meaning that just because you might be an award winning hair stylist or baker or chef or architect or graphic designer or whatever the skill is that the individual possesses, just because you have that skill, It does not mean that you'll be good at creating and managing a business that's built around that skill.

[00:02:37] Antony Whitaker: And it's that mistake that an employee in a small business makes when they one day think to themselves that this is easy. I can go out on my own and keep more of the money myself. 

[00:02:50] Antony Whitaker: And so they do go out by themselves only to find out that it isn't easy. In fact, most people will fail. And that's just the reality. So what are the keys to success? Well, the first one is to realize that your business will never grow faster than you do. Meaning that when you open your business, you need to realize that the skills that got you here won't be what will get you there.

[00:03:15] Antony Whitaker: There. So you better learn new skills, the skills of business, not just the skills of the stylist, because while the skills of the hairdresser is what's gotten you this far, they're not the skills that you will need to manage and grow a business. So you need to learn the skills of management and marketing and finance and leadership.

[00:03:34] Antony Whitaker: And that's a never-ending journey. And so, first and foremost, if you want to succeed, you better commit to being a lifelong learner. Now, in reality, there is no five step plan that you can learn in a day or two.

[00:03:50] Antony Whitaker: There is no single book to read or course to do. Being a business is a never-ending journey of ongoing education, but not just any education because probably the single biggest reason that businesses fail isn't about the failure to deliver a good product or service. No, that's not it at all. The single biggest reason.

[00:04:11] Antony Whitaker: That small businesses fail are through financial mismanagement, and that's where being in business is brutal, and it will take no prisoners because when the business doesn't work from a financial perspective, meaning when you can't pay the bills, then the business will collapse like the proverbial pack of cards.

[00:04:30] Antony Whitaker: And yet it's that financial mismanagement, especially for hairdressers, that is typically their weak spot, because although spending money is fun, managing money isn't. In fact, managing money can be deadly boring. It can be intimidating. And it can expose the weaknesses that you might have. And it can make you feel stupid.

[00:04:52] Antony Whitaker: Side note here, don't believe that you're stupid for a moment, because you're not. But for most hairdressers, the reality is that managing the financial side of business is not fun, or creative, or exciting, or entertaining. Because managing money effectively involves some simple maths and maybe some spreadsheets and some competence with pretty basic technology.

[00:05:17] Antony Whitaker: And occasionally it means talking to people who don't always understand you, and they don't dress like you or think like you. But the really unnerving thing is that they can see right through the facade that you put up. Meaning that they're looking at your business They can see exactly what's going on.

[00:05:37] Antony Whitaker: And all that smoke and mirrors that you might use with other people simply doesn't cut it with the accountant because they can look at your numbers and know exactly what the reality is. But here's the thing. The accountant is there to help you. But for them to be at their most helpful, you have to meet them halfway.

[00:05:57] Antony Whitaker: Meaning that you need to understand what it [00:06:00] is that they're talking about. Now that doesn't mean that you have to become an accountant or even a bookkeeper. But it does mean that you need to learn to speak the language of business. And I promise you that that's not as hard as you might think. So here's my list of the five most important things that you need to get on top of to ensure that you grow a successful and profitable business.

[00:06:25] Antony Whitaker: So, the first thing that you need to do is you need to learn to balance your budget. Meaning that you need to make sure that the monthly expenses of the business don't exceed the monthly income. Now that sounds simple enough, and do you know what? It is. But the reality is that most salons don't even have a budget. So how can you balance the monthly income and outgoings if you don't have a budget to compare it against?

[00:06:45] Antony Whitaker: The second thing you need to have in place is a system to track your spending. That means that you need to have a cash flow forecast and you need to look at it every day and update it at least on a weekly basis.

[00:07:04] Antony Whitaker: Now the cash flow forecast allows you to look into the future and forecast what money you anticipate coming into the business and what money you anticipate going out of the business. With a cash flow forecast in place, it takes all the guesswork out of managing your finances, and it gives you a sense of comfort as you look into the future, and you can see where the cash flow problems of the business might be before they actually become a problem.

[00:07:33] Antony Whitaker: Now, once you've got the budget and the cashflow forecast in place, the third step is to focus on the three keys to growing any business, which are increase the number of clients, increase the average spend and increase the frequency of visit. 

[00:07:53] Antony Whitaker: And that brings us to the fourth step on my list, which is to pay down debt because having debt is the single biggest killer on you getting ahead. Whether it's loan repayments or credit cards, or overdraft fees or whatever it is. Just do whatever you can to pay down all business debt because the interest on loan repayments is keeping you from growth.

[00:08:14] Antony Whitaker: So learn to expand at the speed of your cash flow. Now I know that's not a particularly sexy thing to do, but that is the reality if you want to build a successful profitable business. And that brings us to the last of my five points, and that is the need to build a financial buffer within your business.

[00:08:36] Antony Whitaker: Because if the last five years have taught us anything, it's that every business needs to have a financial buffer that will enable the business to meet its overheads for three to six months, so that regardless of what's happening in your business or the wider economy, If you're able to create a financial buffer, it buys you time to adjust to a new reality.

[00:08:59] Antony Whitaker: So that's my list of the five most important things that you need to get on top of to ensure that you grow a profitable business. And with that said, we need to start winding this episode up. But before we do, we are soon to reopen our Money online course. So for those salon owners who are listening and recognize that money is an essential topic to master, then visit growmysalonbusiness.com forward slash course forward slash money, because when you get clarity and you have the confidence that you need to handle the financial side of your business, that will be the best investment that you have ever made.

[00:09:36] Antony Whitaker: So if you want to find out more, go to growmysalonbusiness.com forward slash course forward slash money and join the waitlist so that you get priority notification as soon as enrollment opens and I'll put that link in the show notes for today's podcast. So with that said, thanks for listening and I will see you next week.