11 Reasons You Need a CFO for Your Spa and Salon Bookkeeping

Your shelves could be lined up full of shampoo that is not selling properly, but that bottle of moisturizer your customers want is out of inventory again! We can tell you why it happened and how to avoid similar scenarios.

Welcome to the piece we wrote specifically for spa and salon owners to communicate how proper bookkeeping for spa and salon owners can not only keep you away from missing sales but can actually help you rake in those profits and grow!

The number of people who come to your spa and salon, the products they purchase, the services you sell, and the ROI (Return on Investment) your business makes in every transaction goes to your bookkeeper. They could be overlooking the importance of this data.

We, on the other hand, can use this data to forecast your current positioning. We will also predict upcoming trends, so you never have to miss an opportunity to make a sale again!

How Spa and Salon Bookkeeping Can Help Your Business Grow?

The Profit is in the Details

When calculating income and expenses, inevitably, every purchase or sale made in your business is recorded. But if you keep using it just to do your taxes, that is a lot of data going down the drain. It is not being used to its fullest capacity.

You can use this spa and salon bookkeeping data to analyze the product you are selling the most, the service that is not going well, and/or the employees doing the most profitable jobs consistently in your business. These details can then help you decide what to promote, what to cut out and where to focus all hands on the ship (no, it’s not AI, just a weird analogy)

Spa and Salon Bookkeeping can Increase Your Customer Retention

During bookkeeping, your accountant writes down the services you sell to your clients on a daily basis. Why not use that to see which service makes people return for more? Which service is not doing so well?

As a spa and salon owner, you have to be cognizant that if you do not sell your clients an impressive service on their first visit, they are most likely not returning!

Therefore, you need to form your relationship with your new clients using the best service you offer. Identifying the said service in the first place is the job of your CFO. When an experienced CFO does your bookkeeping, he or she can identify trends and patterns in that daily sale/purchase data.

These patterns can then guide you on which service to focus on for new clients. And that is not it. Identifying the highest-paying service or product also helps you focus your marketing budget as well! How? Keep reading!

Pinpoint your Target Audience and Service

If a particular service is working really well in your spa and salon business, making sure you have everything to provide that service in your inventory is not enough. You also have to make sure that the clients who get this service keep coming back to you.

Furthermore, you have to ensure that new clients looking for this service also come to your salon from amongst the competition in your area. This would ensure that your marketing targets only the right clients and maximize your Return on Investment (ROI) on the marketing budget.

Such a level of analysis is possible only if you have a financial expert doing your bookkeeping.

Make Sure You Never Lose Opportunity to Make Sale

Predicting when you will be able to make the highest sales on a particular service is not easy. (Except if you are a psychic, in which case, you do not need us:).

Using your bookkeeping data, we can predict when you will make the highest sales. This is done by analyzing when and why you made the highest sales in the previous year. Efficient bookkeeping ensures you are always ready for the holiday and off-season.

After you successfully run the marketing campaign, orders could very well pour in. But do you have enough resources to meet those appointments?

Do you have enough space and staff? Are your production lines able to handle a successful marketing campaign? These are all the things that a CFO, who’s also your bookkeeper, can consider. We can also implement solutions before your success in one department becomes a disaster in the other one.

One key opportunity that small businesses often need to improve their cash flow is landing a huge sale. If your small business is not financially organized, it will not be operationally prepared to take advantage of such opportunities. Bookkeeping for Spas and Salons must be handled efficiently to help your business scale as soon as possible.

Managing Account Receivables

Having a virtual CFO manage your account receivables ensures that you get your money back from your clients on time, every time. Thus, your cash flow will continuously improve.

At the same time, someone who is already handling the finances of spa and salon businesses across Canada and the USA can easily gauge when your customers are going to pay and when that money will hit your bank account. Our industry experience, combined with our knowledge of spa and salon businesses, makes Tangent Consulting the best Virtual CFO provider for spa and salon businesses in Canada.

With our expert financial support, you will be able to collect amounts that your customers owe politely yet swiftly. Everything you collect will be tracked to ensure you are charging the right amounts to the right clients and receiving money on time.

Spa and Salon Bookkeeping can Reduce/Remove Hidden Costs

Sometimes, it feels like you are selling the regular amount of services, paying the same amount of people, and there is no other tangible increase in your material costs as well.

But … your profits are diminishing. Hidden costs in your spa and salon business are usually the responsible party in these scenarios. These could be subscriptions that you are still paying for that are not actually being used, overpriced vendors that you might want to get rid of, overstocked inventory equipment etc.

When doing your bookkeeping, your CFO will ensure that these payments are being tracked. They’ll proactively work to reduce the costs of each of these payments. This will enable your small business to provide your customers with a market-competitive price. Thus, your ROI for every offered service/product will increase.

Help Introduce Loyalty Programs and Discounts.

While your current bookkeeping might show you the appointments you make every day, an expert CFO from Tangent Consulting Services can go beyond recording this appointment data.

We will identify patterns in your clients’ frequency, preferred services, and most booked times. Using this, we can proactively suggest targeted loyalty programs or discount packages. These packages will incentivize repeat business and help you scale your small business.

Increase Client Lifetime Value

Some clients are worth more than their weight in facemasks! These are your VIPs—the clients who consistently book time at your spa and salon business. Your CFO can help you identify and nurture these VIPs, maximizing their lifetime value (LTV) and boosting your spa or salon’s ROI.

We will divide these VIPs into segments, separating the ones who are your regular customers and those who come rarely to get the most exclusive treatment.

Then, we will implement personalized rewards for these clients. This will give them a sense of privilege and specialty. It will make them your regular clients AND do your marketing the most organic way, that is, by word of mouth!

Use Dynamic Pricing Strategies

An expert CFO will have the data in front of them to see when the highest and lowest busy time for your spa and salon business is. They can then use this data to help you increase your sales. Time or day-based pricing is becoming popular.

This can eventually help you tap into an untouched market to attract more customers. It will also ensure that you are efficiently keeping your staff busy. A quick and obvious example of this is introducing off-peak-hour discounts so you can attract customers who do not work 9-5.

It will increase your earnings AND give you a completely new set of customers, increasing your sales and competitive advantage.

Reduced Material Costs & Faster Delivery

Anything that you buy for use in your business is recorded via your bookkeeping. Have you ever thought about what would happen if your bookkeeper was actively invested in making sure you are paying the least possible amount for quality products? That is one of the ways you can start saving money regularly.

Your CFO can ensure that you source your expenses from the nearest, most affordable vendor offering the quality of products you are looking for. This not only lowers your business costs but also helps your business grow exponentially with a local-first approach. Communities love it!

Planning Your Next Big Move

An expert CFO for spa and salon businesses can identify when it is time for your spa and salon business to expand. Guesswork goes out the window. When it is the right time to open another branch or offer more services, you can count on us as your CFO team to cue you. That is not it, though.

As your CFO, we will also help you identify the most appropriate and relevant investors for your business. We will ensure your data is squeaky clean to pitch for any external grant/funding. We will always be with you throughout the entire process, right up to the point where you land the investment.

With a free consultation call, we can help you decide if hiring a CFO will benefit your business and whether it will actually increase your profits!