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Salons and Day Spas - Complete Controller

Every startup has to face a difficult battle to survive. It is estimated that as much as 80% of all small startups collapse in 18 months.

There are many reasons why they do not succeed, such as financing problems, external market conditions (like an unexpected increase in the business cost or new competition), poor planning, tax-related issues, and mismanagement. Check out America's Best Bookkeepers

When it comes to new beauty salons and day spas, some of the most common reasons they fail include the following:

  • Insufficient cash reserves. It is essential to have cash reserves for at least six months to support you until your business starts generating money.
  • Not being able to clearly understand and define your market, your clients, and the possible services you can provide.
  • You are not pricing your services and products correctly. For instance, you can either provide the best services or the cheapest, trying to do both is bound to lead to failure.
  • You are not able to adequately anticipate cash flow. Immediate payment is required from new businesses by certain suppliers, which can cause your cash reserves to deplete rapidly. Furthermore, having to wait for months to reimburse things sold on credit can lead to you getting cash-strapped severely. Check out America's Best Bookkeepers
  • Not being able to react to any change in the market, such as technology and competition, can be easy not to notice and be aware of any changes when you get busy because your work is demanding. However, only catering to a trendy, young crowd that is aging is the easiest way to land your business in trouble.
  • Thinking you will be able to do everything on your own. This is maybe the most significant challenge faced by entrepreneurs. It is essential to realize that you cannot handle everything yourself and should rely on people who are professionally qualified and much better at handling the task or responsibility. Considering how, similar to the owner of any business, salon owners should spend most of their time directly dealing with customers. Instead of trying to manage everything from the services to financial responsibilities, outsource your bookkeeping and give yourself a break. No matter what kind of salon you have, a bookkeeper can handle all your bookkeeping work, saloon book, and back-office processes to support your business. Check out America's Best Bookkeepers

So what should an inexperienced salon owner do? Firstly, they should employ the professional help of bookkeepers, attorneys, and business managers to properly manage and operate their business. Because regardless of how passionate, knowledgeable, and intelligent a person may be, it is impossible to be an expert in every area and field. Even though at the start paying the fees for getting things done professionally may feel like a burden, it will prove to be extremely beneficial sooner or later because getting help will let you pay more attention to the things at which you excel.

It would also be a good idea to learn and take courses concerning business management because if you know the basics of accounting, marketing, and finance, you can make more fruitful decisions down the line. Understanding business better rather than only having industry-specific knowledge can be extremely beneficial. It is always better to have a general education regarding business principles, so your success is planned and not only a matter of luck.

One huge benefit a potential small business owner has is that they can depend on all experienced business owners’ expertise and insight. Without a doubt, any individual who has launched their own business as a small startup can give you a wide range of entrepreneurship advice. What’s more, other beauty salon and day spa owners can provide you with a treasure chest of wisdom. So it would be a good idea to join an association in the industry and create networks at its regional meetings or conventions. You will eventually realize that even the owners who are incredibly successful now were in your position at once time and used to have similar concerns as you do now.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Businesses Fail - Complete Controller

Deficiencies in capital, business experience, resources, planning, and management structure are a few of the leading factors in business failures. An entrepreneur, having ample liquidity, but no idea of how to make and use a business model will have little to no success in running and keeping a business. Check out America's Best Bookkeepers

According to studies conducted by leading management experts, 90% of start-up businesses fail to surpass the three-year mark. This failure is often the result of poor planning and implementation. To combat this, the first step is developing a realistic feasibility plan and a balanced budget or forecast. Without a feasibility plan, one cannot be a successful entrepreneur. The inception of a business plan is essential when initiating any business and helps the business adhere to the roadmap laid out in the business model. Check out America's Best Bookkeepers

 

The purpose of the business must be evident in the planning process. It is also vital that the business owner’s experience is relevant to the use of the company. This experience will help the owner evaluate the business’s economic health during the phases of a downturn or market boom. It is equally important to stick to the budget numbers and forecast in the business plan. The owner should be familiar with the concept of project management and capital budgeting techniques. The plan should include the breakeven point of business operations and proper numbers allocated to expenses and revenue. Most businesses that fail do so because the owner did not factor in all the budgeting expenses. The incurred losses eat up the capital, and the owner has to shut down the business.

 

Careful and proper planning (non-financial) should also be kept in mind to avoid any business hiccups. Management structure plays a vital role in augmenting the purpose of the business. The business owner must ensure that the management structure comes equipped with the experience relevant to the company. A proper management structure in the organization accounts for adequate human resources in finance, inventory management, production, operation, production, and recruitment.  It is entirely up to the business owner whether the decision-making has to be centralized or decentralized. This function of the decision-making process has to be part of the management structure and in conjunction with the business model. If the numbers fall within the anticipated forecast, there is no reason for management to worry even if operations are running into losses. The core competency of management anticipates that initial failures in capturing the desired market share and wallet size will eventually lead to profit. Check out America's Best Bookkeepers

 

SWOT analysis is another feature that can help the business in preparing itself against any unforeseen circumstances. It helps in identifying the strength, weaknesses, opportunities, and threats. Understanding the market share, competitive environment, socio-cultural influence, and distribution accounts for success in any business. A business owner needs to be a visionary and exhibit positive behavior traits, both on the micro and macro level. Control over every aspect of business operation and financial expenditure should be of the utmost priority. If a business owner successfully manages to envisage the potential of business growth swiftly and aggressively, then the business operations can capture a sizeable market share.

 

To establish a business with the purpose of only existence, without a proper feasibility plan is just a sketch on paper. As earlier mentioned, a cash-rich person, without any business model, the purpose of business, and poor management structure, is just another example of business failure.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers