Editor’s note: Part II of this column will appear in the January 2014 issue of Skin Inc. magazine, and will address using tools and systems for cash control, utilizing financial professionals, and the value of constantly evaluating and updating aspects of your business’s finances.
Is your business financially fit? If you are like most, your relationship with your skin care business’ financial aspects may raise more questions than answers.
Being financially fit is knowing where you stand in regard to your business’s financial matters and involves the following.
- You know how sales are trending compared to previous years.
- The direct percentage of what it costs to produce and sell products and services is known and managed.
- Monthly overhead expenses are clearly defined and constantly re-negotiated.
- Profit/loss is known, and there is a plan to improve it.
- The volume of sales required to break even is defined in terms of the number of services and products that need to be sold monthly and weekly.
- Procedures are in place to assist in decision-making and to help determine the financial impact relative to taking on debt or investing in new equipment.
- You have clear financial targets with plans, tools and systems in place to meet them