Every startup has to face a difficult battle to survive. It is estimated that as much as 80% of all small startups collapse in 18 months.
There are many reasons why they do not succeed, such as financing problems, external market conditions (like an unexpected increase in the business cost or new competition), poor planning, tax-related issues, and mismanagement.
When it comes to new beauty salons and day spas, some of the most common reasons they fail include the following:
- Insufficient cash reserves. It is essential to have cash reserves for at least six months to support you until your business starts generating money.
- Not being able to clearly understand and define your market, your clients, and the possible services you can provide.
- You are not pricing your services and products correctly. For instance, you can either provide the best services or the cheapest; trying to do both is bound to lead to failure.
- You are not able to adequately anticipate cash flow. Immediate payment is required from new businesses by certain suppliers, which can cause your cash reserves to deplete rapidly. Furthermore, having to wait for months to reimburse things sold on credit can lead to you getting cash-strapped severely.
- Not being able to react to any change in the market, such as technology and competition, can be easy not to notice and be aware of any changes when you get busy because your work is demanding. However, only catering to a trendy, young crowd that is aging is the easiest way to land your business in trouble.
- Thinking you will be able to do everything on your own. This is maybe the most significant challenge faced by entrepreneurs. It is essential to realize that you cannot handle everything yourself and rely on professionally qualified people and much better at handling the task or responsibility. Considering how, similar to the owner of any business, salon owners should spend most of their time directly dealing with customers. Instead of trying to manage everything from the services to financial responsibilities, outsource your bookkeeping and give yourself a break. No matter what kind of salon you have, a bookkeeper can handle all your bookkeeping work, saloon book, and back-office processes to support your business.
So what should an inexperienced salon owner do? Firstly, they should employ the professional help of bookkeepers, attorneys, and business managers to properly manage and operate their business. Because regardless of how passionate, knowledgeable, and intelligent a person may be, it is impossible to be an expert in every area and field. Even though at the start paying the fees for getting things done professionally may feel like a burden, it will prove to be extremely beneficial sooner or later because getting help will let you pay more attention to the things at which you excel.
It would also be a good idea to learn and take courses concerning business management because if you know the basics of accounting, marketing, and finance, you can make more fruitful decisions down the line. Understanding business better rather than only having industry-specific knowledge can be extremely beneficial. It is always better to have a general education regarding business principles, so your success is planned and not only a matter of luck.
One huge benefit a potential small business owner has is that they can depend on all experienced business owners’ expertise and insight. Without a doubt, any individual who has launched their own business as a small startup can give you a wide range of entrepreneurship advice. What’s more, other beauty salons and day spa owners can provide you with a treasure chest of wisdom. So it would be a good idea to join an association in the industry and create networks at its regional meetings or conventions. You will eventually realize that even the owners who are incredibly successful now were in your position at once time and used to have similar concerns as you do now.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.