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Go With the Flow

Julie Sturgeon March 2007 issue of Skin Inc. magazine

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Most spa owners credit their great hands and people personalities as the tools to success in the professional spa industry. Business experts take a different tact: You need cash in your register today before you can pay your bills—and unlock your door—tomorrow.

“People think in terms of profits: It costs $X to offer a service, so if they sell for $Y, they’ll survive,” says Tim Berry, president of Palo Alto Software in Eugene, Oregon. Unfortunately, when it comes to the bricks-and-mortar reality, complications such as assets and principal loan repayment don’t appear on that blueprint.

It’s a problem Alice Magos, an analyst with Commerce Clearing House in Chicago, runs into, and her advice cuts to the chase. “A small-business owner has to stop worrying about profit and loss, and start considering cash flow the lifeblood of the business. You can be terribly unprofitable and still survive as long as your cash is flowing,” she assures.

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