Podcast Length: 1hr 7min | Date Published: 2nd August 2022
The sustainability of a business is dependent on profit, yet many businesses operate on a tiny profit margin. Ultimately, that is why only a very small percentage of small businesses reach their 10th birthday.
Most business failures can be attributed to a lack of financial awareness and understanding of how to manage finances. Too many salon owners operate on the basis of “work hard, pay my bills, and what’s left over is profit.”
However, that way of thinking is fundamentally flawed because, in case you haven’t noticed, there is usually very little left over!
So instead of the traditional accounting method of ‘Sales minus expenses equals profit,’ we should be turning this on its head and running businesses on the ‘Profit First’ principle; ‘Sales minus profit equals expenses.’
If you’re confused, stick around because my guest on today’s podcast is Ronit Enos, Author of the book ‘Profit First for Salons.’
In today’s podcast, we discuss:
- Profit margins in salons today
- The steps to increasing profitability
- The ‘Profit First for Salons’ book…
And lots more!
In this Episode:
[03:55] Ronit shares what drew her to the salon industry in Israel at the age of 16.
[08:58] Why Ronit decided to open a salon in the United States, and the rollercoaster of highs and lows that followed.
[17:32] The final triggers that motivated Ronit to transform her life.
[22:27] What Ronit believes to be the biggest mistake that salon owners make with regard to their finances.
[27:03] The book that changed Ronit’s perspective on money.
[33:11] Sales minus profit equals expenses; exploring the profit-first approach to business.
[43:22] Ronit explains the process she went through to test out the profit-first approach.
[48:13] The percentage of small businesses (including salons) that are profitable.
[50:06] Profit margins that salon owners should be aiming for when they adopt a profit-first mindset.
[54:14] Advice on how to reduce your expenses.
[57:33] Why time is the most valuable resource.
[59:46] Ronit shares a personal story which highlights the importance of being independent, as well as some encouraging words to do what you love and surround yourself with people who bring out the best in you.
Thanks so much for joining me this week. If you enjoyed this episode, please leave a review. Ratings and reviews are extremely helpful and greatly appreciated!
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Special thanks to Ronit for sharing her insights with me for this week’s episode.
Until next time!
Links and Resources:
Grow My Salon Business
Profit First for Salons