January 2011

Lisa Kind - Editor

Off the Top | by Kimberly Johnson

 

Create a Plan for Financial Success

Many individuals have found financial success behind the chair in the beauty industry; unfortunately, there are also many who have not. What is the reason for one stylist to have financial success and not another?

Does it come down to talent, hard work or a sprinkle of luck? Does it depend on the salon they have chosen or the town they live in? There is not one correct answer, but I do believe there are a few simple steps that can help you begin your journey to financial success.

Start by making a goal and writing down your desired annual salary (example: $40,000).

The next step is to understand how to make the goal realistic and attainable. For most, reviewing numbers in a linear fashion can get boring quickly. So let us start with an analogy from my own personal experience.

When I had my second child, Max, he was born at a whopping 11 pounds, five ounces. The baby was not the only one who had developed a hardy weight, as I was left with 50 extra pounds myself. I could not fathom how to begin to lose the weight, so I wrote out a weight plan that was attainable. After consulting with my doctor, we decided that a loss of two pounds per week attained through a good diet and exercise was realistic. I took the 50 pounds and divided it by two pounds per week: 25 weeks to achieve the desired outcome (roughly six months). Six months and back to my normal self? Okay, that sounds good.

You can conquer the same type of overwhelming feeling with your financial plan. Take the desired $40,000 annual income and break it down into a month, week, and day.

Broken down this way, it does not seem too difficult. Our next step: what are the critical elements needed to get to this success? With every goal, you have to identify and narrow down the two to three critical elements needed for success.

For my weight plan, the elements were caloric intake and daily exercise. With your financial plan, the elements will be guests and the service dollar (see chart). For this example, to achieve the daily gross pay, a stylist would need to service three to four cut / color clients per day. This is only 15-20 clients a week.

**Please note that the following assumptions are used for this exercise:  commission based at 40%, $40 haircut price (1 hour service time), $90 basic weave (1.5 hours service time), 5 day work week at 35 hours, not on a double booking scenario.

 

With a plan in place, it is important to stay on course. Let's go back to my 50-pound quest. After three weeks of sticking to the plan, I had only lost one pound per week and I felt exhausted. I had achieved very little success for a lot of work. At that time, I could have counted myself out and said the weight would never come off. However, through my tears, I dropped the brownie and continued through the following week, resulting in a three-pound loss. Success.

It is definitely not easy to build from a zero client base or to lose 50 pounds. However, to make the financial plan work (or lose the weight) the first time, come ready to participate and stay on course.

You do not have the luxury to choose to connect with only two out of the ten guests serviced that week, or you will be seeing the same dismal numbers six months from now. Write your goals today and outline your financial plan.

Your financial success will look different each day, week, month, and ultimately you will have the power to change your financial success on an annual basis. So, put down the brownie, pick up the scissors, follow the plan and celebrate your passion with a fiscally successful career.

Kimberly Johnson is a successful Cosmetology School owner in Portland, Oregon.  In addition, she serves as Director of Business Development, overseeing a local 12 million dollar salon spa operation with 250 employees with four locations.  To reach Kimberly email her at kimberly@avedapdx.com.

 

 

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