A financial plan typically includes eight key components:

💸 Goal setting:

Identifying short-term and long-term financial goals, such as saving for retirement, purchasing a house, or starting a business.

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💸 Budgeting:

Developing a detailed budget that outlines your income, expenses, and savings goals. This helps you track your spending and ensure you're allocating your resources effectively.

💸 Emergency fund:

Establishing an emergency fund to cover unexpected expenses or financial difficulties, usually equivalent to three to six months' worth of living expenses. The pandemic taught us the importance of this! 😷

💸 Debt management:

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💸 Risk management:

Assessing and managing potential financial risks, such as health issues, disability, or unexpected events that could impact your income. This may involve purchasing insurance policies to mitigate risks.

💸 Investment planning:

Developing an investment strategy based on your goals, risk tolerance, and time horizon. This includes selecting appropriate investment vehicles such as stocks, bonds, mutual funds, or real estate.

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💸 Retirement planning: 

Setting a plan to save and invest for retirement, including estimating the amount of money needed and identifying retirement accounts.

For example, a few to choose from are Self Invested Personal Pension (SIPP), or State Authorities Superannuation Scheme (SASS) pension, 401k or Individual Retirement Account (IRA) and evaluating these investment options.

💸 Tax planning:

Eight ways to help you get started on your business's financial plan: 

💰Set clear goals: 

Define your financial objectives for your beauty business. Identify what you want to achieve in terms of revenue, profit margins, and growth.

💷 Annual

💷 Quarterly

💷 Monthly

💷 Weekly

💷 Daily

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💰 Create a budget:

Develop a comprehensive budget that includes all the expenses and costs associated with running your beauty business. This should cover areas such as rent, utilities, product inventory, marketing, wages, and any other operational costs. Be sure to also include an estimate of your expected revenue.

💰 Track your income: 

Implement a system to monitor and record all the income generated by your beauty business. This can include sales from services, retail product sales, and any additional income streams.

Some online booking systems have this integrated into them and make it easy to track the breakdown of types of treatments performed, by which therapist and products sold. 

📸 An example of a snapshot of treatments performed, this is similar for types of treatments, products sold, product categories to help you get an overview of your business - use a filter to hone in on specific aspects.

💰 Monitor expenses:

Keep a close eye on your expenses and make sure they align with your budget. Regularly review your spending habits and look for ways to reduce costs without sacrificing the quality of your services. 

💰 Cash flow management: 

Efficiently manage your cash flow by ensuring that your income exceeds your expenses. Consider implementing systems such as sending timely invoices, offering convenient payment options, and managing any outstanding payments.

💰 Pricing strategy

Develop a pricing strategy that factors in your business expenses while remaining competitive in the market. Analyze your costs, evaluate your target market, and understand the pricing structures followed by other beauty businesses within your area. Knowing your own numbers is key to pricing for profit.

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💰 Investment planning:

Identify areas where you may need to make investments to enhance your beauty business's growth and profitability. This could include equipment upgrades, staff training, marketing campaigns, or expanding your range of services.

At our annual general meeting AGM we sit as a team and discuss the treatments they'd like to offer, training they'd like to obtain and put a plan of action in place for their personal development.

We also look at each quarter and put together a treatment and product marketing roadmap. This helps with our budget and also if there are times of the year we need a cash injection we try to factor in a new launch to boost our profits.

💰Review and adjust:

Regularly review and analyze your financial statements, such as your profit and loss statement and balance sheet.

Assess your progress against your financial goals, identify any areas for improvement, and make adjustments to your financial plan as necessary. I do this daily, weekly, monthly, quarterly and annually to manage my projections against takings to help the business maintain and exceed the financial goals we've set.

Remember, it is always beneficial to seek the advice of a financial professional or accountant specializing in small businesses to help you in the process of creating and managing your financial plan. There are a few that specialise in our industry specifically and personally I've found them most helpful.

Financial planning is an ongoing process that requires regular review and adjustments as your financial circumstances and goals change over time. It helps you make informed decisions, prioritize your spending, and work towards achieving financial security and success.

📚 Books that have inspired me along my financial education 📚

📖 the more you read... the more you'll know 📖

Thank you for reading, if this was useful please 💖 and share if it could help someone.

Thank you ~ Diana x