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Examining Critical and Essential Expenses

Anthony Silvestri May 2011 issue of Skin Inc. magazine

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In today’s economy with increasing expenses, high unemployment and turnaround uncertainty, all businesses are looking for ways to cut expenses. However, even in a good economy, improving your sales-to-expense ratio is critical for long-term success, enabling you to weather present and future financial storms.

A firm understanding

The first step in establishing cost-cutting measures is to have a firm understanding of your spa’s finances. Preparing a monthly, quarterly and yearly cost-of-operations and revenue report will let you see exactly where your revenue is being spent by expense type. Leave nothing out of this report; the more detailed the better.

Hone in on critical and essential expenses, and search for room to reduce them. Set expense-reduction goals, then seek out methods for reduction.

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