How to Make Friends With Your Salon Numbers (A Beginner's Guide)

Many salon owners avoid looking at their financial numbers, fearing what they might find. This episode offers a gentle, jargon-free guide to understanding your salon's profit and loss, giving you clarity and control.

Numbers Aren't There to Judge You

Phil explains that numbers are simply a map, a starting point for your business journey. The fear of not knowing what your numbers might reveal is often heavier than facing the reality. He shares his own experience of avoiding his financials, despite a banking and finance degree, illustrating that the numbers themselves don't judge; they just show you where you are.

The Three Key Salon Numbers

To begin, you only need to understand three figures. Firstly, your 'takings' – all money coming in from services and retail. Secondly, 'money out' – all expenses for keeping the doors open, categorised into big buckets like stock, wages, premises, and bills. Lastly, 'what's left' – your profit, which is takings minus money out. This profit is your reward and what you can reinvest.

Understand Your Profit and Loss Statement

Don't let the term 'profit and loss' (P&L) intimidate you. It's simply those three numbers – money in, money out, what's left – written down in order. While your accountant provides an annual P&L, you need to look at these figures more frequently to get a continuous 'pin on the map' for your business journey, not just a yearly verdict.

Solo Owners Need This Most

If you run your salon alone, this conversation is even more critical for you. Your business numbers and your personal wage are directly linked. Every pound that leaks out of the business is a pound less you can take home. Phil stresses that solo owners, more than anyone, deserve to see their financial situation clearly and should not turn a blind eye.

Make Financial Review a Regular, Gentle Habit

Avoid making financial review a dreaded annual event. Instead, commit to spending just 10 minutes a month, perhaps with a cup of tea, simply looking at those three core numbers. This regular, small act of engagement helps to demystify your numbers and build a healthier relationship with your salon's finances, replacing fear with familiarity.

Making friends with your salon's numbers is the first step towards true financial freedom and control. Phil Jackson shows you how to approach this without fear, turning your numbers into a valuable guide for your business journey. Explore more at buildyoursalon.com.