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Financial Skills for the Entire Team

By: Greg Hagin
Posted: June 17, 2008, from the July 2006 issue of Skin Inc. magazine.

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Get the word out, or marketing costs. Brochures, Web site, advertising, marketing and promotion.

Have an office, or administrative costs. Telephone and fax lines, office supplies, computers, IT support, postage and shipping.

Educate the team, or training costs. Classes, tradeshows, associations, membership dues and subscriptions.

Meet payroll, or labor costs. Wages and salaries, vacation pay, bonuses, payroll taxes, workers’ compensation insurance, medical benefits and retirement plans. (These can be expressed in percentages, so that the actual numbers are less obvious.)

By now, your team will begin to get the picture that, in order for the spa to spend more, additional revenue must be generated. If revenue is lean, expenses must be kept to a minimum. Once they have grasped the general cost structure of the business, as well as the relationship between revenue and expense, they will be open to learning more.

Keep it real