|Click Here to Download PDF|
Accounting for Hairdressers & Barbers
As you know, hairdressing is a super competitive industry with competitors in every strip shopping centre. Running a salon is challenging and you have to be skilled in time management plus you may have to manage and motivate staff. Of course, you also have to satisfy the styling needs of fussy and difficult customers not to mention the occasional Bridezilla!
Operating in such a crowded market means you have to work on your marketing to attract and retain customers. In fact, your marketing could be the difference between boom, doom and gloom. In one of our recent webinars we revealed there was more than 25,000 monthly search queries on Google for 'Barber Shop in Parramatta'. This search excluded 'hair salon' or 'hairdresser' so it was just people specifically looking for a barber shop in Parramatta. Huge numbers and in your industry, your local search marketing could be the difference between boom, doom and gloom
To maximise the profitability of the business you also need to get your product retailing right. On an operational level, there are occupational hazards with many hairdressers and barbers complaining of musculoskeletal problems caused by long hours of sitting or standing. Let's not forget the products and chemicals that when inhaled can cause serious respiratory diseases or skin related ailments because of contact with chemicals and products.
Running a hairdressing salon or barber shop is hard work and having an accountant who understands the industry can give you a serious competitive edge. Over the past two decades our team of accountants have helped dozens of hairdressing salon owners get their business off to a flying start and our marketing skills distinguish us from other Geelong accounting firms. To help you, we invite you to book a FREE, one hour introductory consultation to discuss your business needs. You can expect an hour of practical business, tax, marketing and financial advice that could have a profound impact on your future business profits. To book a time, contact us today.
Over the past decade, our team of accountants have mentored dozens of hairdressers and barbers through the various stages of their business
life cycle from start up right through to sale. We bring years of experience, technical knowledge and most importantly, an
intimate understanding of the hairdressing industry to your salon or barber shop. Using industry benchmarks we can analyse the performance
of your hairdressing salon and compare it against your competitors so you know what is working, what isn't working and what areas still
need working on.
THINKING OF STARTING A HAIRDRESSING SALON?
Hairdressers and barbers are one of our specialist client groups and over the years our team of accountants have helped dozens of hairdressing salon owners get their business off to a flying start. We have also mentored hundreds of business owners through the start-up phase and along the way we have built a reputation as business start-up specialists.
If you are looking to start a hairdressing salon or buy into an existing barber shop, there are numerous issues to consider starting with your choice of business structure. You need to complete tax and GST registrations, arrange insurances, select an accounting software program and possibly explore your finance options. It can be a maze of issues but as accountants and business advisors we can assist you in all of these areas plus provide advice on the preparation of a business plan, marketing plan and cash flow budget. If you are contemplating employing staff we can also assist you with the various human resource issues including employment agreements, payroll, WorkCover and your superannuation guarantee obligations.
Starting a business is a bit like building a house that requires solid foundations. In a business sense these foundations include the right tax structure and accounting software, adequate and appropriate insurances together with a marketing plan and a lead generation website. Your choice of business structure is absolutely critical and there are a number of different options including sole trader, partnership, company and trust. When selecting the most appropriate structure for your business we always recommend you ‘start with the end in mind’ because Australian tax laws are complex and changing your business structure at some point in the future can trigger a capital gains tax event that could prove very costly.
Whenever we provide advice on business structures we always take into account:
- Income tax minimisation
- Maximise asset protection
- Allow for the admission of new business partners or investors
- Comply with all legal requirements in your industry
- The risk profile of your industry
- Consider future entitlement to discount Capital Gains Tax Concessions
As a consequence, we often find the business structure is a compromise based on the relative importance of each of these issues.
Another brick in your business foundations is your choice of accounting software. Poor record keeping is one of the biggest causes of business failure in this country and up to date, accurate financial records let you to make informed business decisions. The wrong choice of software can be catastrophic and too often we find business owners produce what we describe as ‘computerised shoebox’ records that cause frustration, waste time and create additional fees. This conflicts with our mission of helping you slash the time and cost associated with bookkeeping and GST compliance.
Here at Scotts Chartered Accountants, we want to be your accountants and business advisors, not just a bookkeeping service. We do more than ‘keep the score’ for our clients and when selecting the most appropriate accounting software for your business we always recommend you match your business needs with your level of accounting skill. You’ll find we support a range of different software options but we do have a preference for cloud based solutions like Xero because you can access your financial data via the internet and invite your accountant or bookkeeper to view your accounts at the same time. This means you can get bookkeeping support and valuable advice in real-time. You can also log-in anytime, anywhere on your Mac, PC, tablet or smart phone to get a real-time view of your cash flow. Your data is automatically backed up and users have access to the latest version of your financial data plus you never need to worry about installing software or program updates.
build a house you also need the right tools and when 'constructing' your business we have developed a number of tools including a start-up
expense checklist broken
down into various categories including:
- tools and equipment
- professional advice and software
- information technology costs – software and hardware
- marketing and signage
- vehicle and trailer costs
This checklist will help you identify all your potential establishment costs and these figures then feed through to our cash flow budget template and allow us to produce a projected profit and loss statement for your first year of trading. These reports can also tuck neatly into our business plan template that is designed to help you secure funding from external sources like a bank. Another useful tool is our business start-up checklist that walks you through key business registrations you might require, insurance options, legal issues, branding and domain name registrations for your website
In summary, if you're contemplating starting a business you don't need to reinvent the wheel as we have all the tools and resources to help you get off to a flying start. In fact, that’s just the beginning because as accountants we can do some financial modelling and prepare some ‘what if’ calculations based on different price points so you know your business’ best and worst case profit scenarios.
MARKETING YOUR HAIRDRESSING SALON
Accountants also operate in a very crowded market and recognise the importance of marketing. While we have a small firm personality, we have big firm capabilities. One feature that distinguishes us from other Geelong accounting firms is our marketing expertise.
Most hairdressers rely on their reputation and referrals to grow their business. While these ingredients certainly remain important, in the digital and social age you need to shift your marketing focus online. Increasingly local searches like ‘Hairdressing Salon Newtown’ are driving traffic to your website which is often the first touch point with a potential new customer. As you know, in business, you only get one chance to make a good first impression and your website is your 'online shopfront' and silent sales person working 24/7 to promote your salon or barber shop.
Over the past few years we have worked with dozens of clients to help them create quality, affordable lead generation websites that are responsive to smart phones and tablets. We can help you plan and build your website, optimise it for Google and the other search engines plus assist you with your content creation including video production and digital publishing. If your website is missing features like lead magnets, calls to action or landing pages we'll help you build them plus we'll also introduce you to strategies like re-marketing and search engine optimisation to drive more traffic to your website.
Your brand should resonate with your target market and we can assist you with the development of your business name, logo and slogan and corporate brochure plus help you write blogs and newsletters. In addition, we can help you harness the power of social media to win more referrals. If you aren’t using some of these marketing techniques your business probably won't reach its full profit potential.
We will help you understand the four ways to grow a business plus identify the key profit drivers in your business. We can walk you through a number of profit improvement strategies and even quantify the profit improvement potential in your business. Our role is to make sure you know your numbers and don't leave any profit or tax savings on the table.
If you're an ambitious business owner looking to fast track your business success, the team at Scotts Chartered Accountants offer you a range of accounting, taxation, marketing and business coaching services including:
- Start-Up Business advice for Hairdressing Salons and Barber Shops
- Advice regarding the Purchase or Sale of your Hairdressing Salon
- Tools including the Start-Up Expense Checklist and Templates for a Business Plan, Cash Flow Budget, Letterhead and Business Card
- Advice and Assistance with the Establishment of Your Business Structure - Company, Trust, Partnership or Sole Trader
- Tax Registrations including ABN, TFN, GST, WorkCover etc.
- Preparation of Business Plans, Cash Flow Budgets and Profit Projections
- Accounting Software Selection and Training – Bookkeeping, Invoicing, Quotes & Payroll
- Preparation and Analysis of Financial Statements
- Preparation of Finance Applications - Loans to Buy a Business, Expand, Franchise Fees
- Bookkeeping and Payroll Services - MYOB, Cashflow Manager, Xero, Reckon & Others
- Tax Planning Strategies
- Assistance with your Marketing including your Branding, Corporate Brochure etc.
- Advice and Assistance with your Website Development - Content, Videos, Blog Posts and SEO
- Wealth Creation Strategies and Wealth & Retirement Planning Services including Transition to Retirement & SMSF's
- Industry Benchmarking and Management of Key Performance Indicators (KPI's)
- Vehicle & Equipment Finance (Chattel Mortgage & Lease)
- Advice & Assistance with Pricing your Services and Claiming Motor Vehicle Expenses
- Recession Survival Strategies
- Advice regarding Employee Relations and Workplace Laws
- Business & Risk Insurances (Income Protection, Life Insurance etc.)
- Business Succession Planning
In summary, we are not just tax accountants. We are business and profit builders who strive to deliver practical, cost effective advice that could give you a serious competitive edge in your industry. Our marketing skills distinguish us from other Geelong accounting firms and hairdressers and barbers have become a niche area within our firm.
If you're a committed and ambitious salon owner looking to accelerate your success we invite you to book a FREE, one hour introductory consultation to discuss your business. You can expect an hour of practical business, tax, marketing and financial advice that could make your business more profitable, valuable and saleable. To book a time, contact us today.
Scotts Chartered Accountants - Infinite Possibilities