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

If you've never sat down and properly looked at your salon's numbers, firstly, you are nowhere near as alone as you think, and secondly, there's no shame in it whatsoever. Today, we're going to go very gently through making friends with the numbers you've been avoiding, no jargon, and I'll leave the lectures at the door. Hello, hello, hello my salon friends. Phil Jackson here, your queen of salons, coming all over the internet again with another dose of my Wise Owl Wisdom. Today's episode is for everyone who feels a little knot in their tummy the moment that money gets mentioned. I'm talking to you if you're brilliant at your work, loved by your clients, fully booked some weeks, and yet you've never genuinely sat down and looked at what the business is doing financially. If that sounds like you, you're in the right place. Take a breath. I promise this will be a kind one. But first, a word from this month's sponsor, Pretty Data. Don't you think you owe it to your team to make staff and client decisions on hard facts? Pretty Data shows who on your team actually makes you money and which good clients have quietly drifted off so that you can win them back. It's your profit partner. It knows your numbers and there are no annoying spreadsheets involved. A client I coach nearly got rid of a team member thinking she was unprofitable and ended up keeping her once she saw the numbers with Pretty Data. You can start your free trial at prettydata.co and the link's in the notes. On with the episode. I'm not going to throw lots of accounting terms at you. I'm not going to make you feel daft for not knowing this already. Nobody sets up a salon because they love numbers. You do it because you're good with hair or skin or nails or lashes or aesthetics. The money side was the bit that nobody really taught you when you were at college, did they? So we're going to start teaching it now in plain English. And I understand this because, to be honest with you, early on I didn't look at my own numbers. And I'm coming from a place of having a degree in banking and finance. I went through university. I should have been the best at getting to grips with my numbers and I didn't. And it's not because I was frightened of numbers, but I was frightened of what I would see. I had this feeling that things weren't great. And somewhere in my head, I decided that as long as I didn't look, it wasn't quite real. I could keep my eyes shut, keep working harder, and then something would kind of sort itself out.

And it won't, by the way. Effort, when you've got your eyes shut, just means you're working very hard in the dark. So when I finally forced myself to sit down and properly look, it was actually a relief. Not because the numbers were better than I thought. They weren't. But now I knew. I could see what was wrong and I could see where there were problems. And that meant for the first time, I could actually start doing something about it. The not knowing was so much heavier than the knowing. And the thing that I'd avoided had actually turned out to be the thing that was kind of setting me free. And that's the reframe I want to give you today. Lots of people avoid their numbers because deep down they think the numbers are there to judge them, to somehow tell them off or to confirm that they're failing. And they're not. The numbers are just numbers. They don't tell a story at all until you do. They're simply a pin on a map showing you exactly where you are. A map doesn't judge you. It doesn't care how you got here. All it does is show you the ground that you're standing on so that you can work out the route to where you want to go. And you can't plan a journey without knowing your starting point. You need that pin on the map now. And your numbers are just that starting point told honestly. That's the friend they can be if you let them. Now, let's make this concrete because I think people imagine they need to understand hundreds of difficult figures. You don't. To begin with, there's only really three. And the reason I'm putting this episode together now is now is the time we're starting to get our end of year stuff from our accountants. So end of year was April. We're now heavily into the summer. This is when these figures start getting delivered to us. So first of all, number one is our takings. All we want to know is the money that's coming in across a month, across a quarter, across a year from services and any retail money in. That's the top of the picture. And that's the bit that people tend to be OK with. That tends to be the bit that they're not kind of turning a blind eye, turning a blind eye to. Number two is what is going out the other side of the equation. And this is the difficult bit. This is difficult because it's not the bit that's on your salon system.

The salon system shows you what's coming in. It doesn't show you what's coming out. That's why our sponsors, Pretty Data, are so brilliant because they've got both sides of the equation in the same piece of information. But this is everything we're spending just to keep the doors open. We don't necessarily need to panic about listing every single receipt when we're looking at these numbers. Just think in big buckets. So stock products, the color, the skin care, the bits that you use and sell. Wages, obviously, if you've got a team premises, your rent or your mortgage and your bills. And then there's extra little bits and pieces, your insurance, software, marketing, all the smaller stuff. We just want money out. And then the third number is what's left. So we take the money out of the money that's coming in. Hopefully there's a bit left and that's your profit. And that's the one that really matters because that's the one that's yours to reinvest in the business or take out of the business as your reward for being the amazing, quirky, freaky little entrepreneur that I know and love. So a salon can be heaving, fully booked, huge takings at the top end and still have nothing left when we get to figure number three because the money's all leaking out on number two. So they can be busy, but not profitable. They're not the same thing. And this third number is how we tell them apart. That's it. Money in, money out, what's left. Get to grips with those three. You're already ahead of where most salon owners ever get to. Now, you might have heard your accountant mention a profit and loss or a P&L and felt your eyes start to glaze over. Let me take that bit of fear away from you right now. A profit and loss is nothing more than those three written down in order. Money in at the top, money out in the middle, what's left at the bottom. That's genuinely all it is. Now, the problem is the figures we get from our accountant are old. We need profit and loss much more frequently so that we get that pin in a map along the journey, not just once a year. It's not enough to rely on a P&L from your accountant. But now, at least the next time someone says it to you, you can nod along because you know it's just your map with a formal name on it. If you're working on your own, I want to say this directly to you because you are most likely to be avoiding this and you're the person who can least afford to.

Your numbers and your wage are the same conversation. There's no big team, no separate company to hide behind. Every pound that leaks out of your business is a pound off what you can take home. So you, more than anyone, deserve to see this clearly. This is not one where you solos can turn a blind eye. The last thing I'll say on the how is don't make this a once a year thing that you dread, where you hand a carrier bag of receipts to your accountant once a year and brace yourself for the verdict. Do it small, do it regularly, 10 minutes a month, sat down with a cup of tea, just looking at those three numbers. That's how we can start taking the fear away. And this starts being something that you know. Friendship with anyone or anything comes from spending a little bit of regular time together. Your numbers are no different. This is how we're going to make numbers, make friends with our numbers. So your gentle first step. And I want you to notice that I'm not asking you to fix anything in your business. It's just about making friends with the numbers. So this month, get one piece of paper or open a note on your phone and write down those three things. What came in, roughly what went out, if that's the best that you can do, and what's left. That's your entire job. Don't judge it. Notice the feelings while we go along. This is useful stuff for you to discuss with your therapist. You're not allowed to beat yourself up over it, though. You're just allowed to look. Notice how you feel. The way you'd look at a map before you start a journey. Whatever the bottom number is, good or bad, somewhere in between what you were expecting, not what you were expecting, at least now we're standing on solid ground. Maybe for the first time, because now you'll know. And knowing is always, always better than the fear of not knowing. So if you'd like a hand taking that very first look, I've made something for exactly this moment. It's called the 10 Minute Money Fix. It's a calm, no jargon way to just keep an eye on the money that's quietly leaking out of your salon. And 10 Minute Money Fix is all about maximizing the profit in your business. So it's not about growing your business. It's about keeping more of the money that you have earned. Each of the fixes takes under 10 minutes. There's five of them. The whole thing is just nine pounds. You can find it at 10minutemoneyfix.com. I'll put that link in the show notes as well. It's a friendly first conversation with your numbers with me sat next to you.

That's me done for this week. Just seven short days until I'm coming all over the internet again with another dose of my Wise Owl wisdom. If you'd like to reach out in the meantime and let me know how you're getting on in your business, Phil at buildyoursalon.com. Also reach out. I would love to get some proper salon owners talking about the money stuff on this podcast. Reach out if you'd like to be a guest on a future episode of the podcast. Also, if I could ask a small favor, if you're listening on Apple podcast, please give me a review. Takes you two minutes. It will make my day. And until next time, take care.