January - Stylist and Salon Newspapers

Ten Tips to Help Your Business Endure and Be More Profitable
Esthetic Endeavors
Judith Culp
People in the esthetics industry are drawn
to the aspect of helping people, the artistic
demands and the glitter of “owning your own
business.”
Many come to our industry either with
no business background or from a business
environment where they were employed. As
a result, it is common for estheticians, and
others in the cosmetology
industry to
participate in poor
business practices.
Small business
administration and
other studies reflect
that small businesses
are difficult maneuvers with high failure rates
that mostly stem from misinformation or lack
of business training. Start-up businesses are
much like raising a child from birth to adulthood
with all the stress and challenges.
Here are ten tips to help your business
endure and be more profitable.
1. Participate in accounting practices but
rely on a professional. While it is a simple and
important process to do the daily bookkeeping
and know what is happening in your business,
bypassing help with quarterly or annual
accounting and review can be disastrous.
Professionals in the accounting and legal
professions act in your best interest. They
have years of selective education. There are
thousands of pages of tax laws and legal implications
associated with running a business that
change frequently. You don’t want to be on the
wrong end of an audit, be charged with operating
illegally or miss out on all the legitimate tax
deductions due you.
2. Be cautious about who you go into
business with. Much has been written about
going into business with friends and family.
Crossing lines between personal and professional
relationships has proven to be detrimental
to many businesses and ruined many
friendships. There is an old saying that holds
true: the toughest ship in the world to sail is a
partnership.
3. Evaluate financial moves based on solid
knowledge. Owning and running a business
comes with risks that must be taken to succeed.
Even though risk-taking is never easy,
there are calculated risks that must be taken
to progress. The timing for business decisions
that may be deemed risky is rarely perfect. What
we have to do is evaluate the risk and make
plans for managing it.
4. Use market research based on your
unique business niche to determine the most
cost effective and business generating devices
to purchase. Technology can be a business
builder but over-purchasing can be a business
breaker. Instead consider using the profits
from one new device to nest egg and purchase
the next. Financing purchases can be a challenge.
Only use a credit card if you can pay it
off when the bill arrives. Otherwise look for
alternatives that involve lower interest rates.
Be aware of leasing and the long-term impacts
tied to this. Leasing is really long term purchasing,
not renting.
5. As a business owner the buck stops with
you. You can no longer call in sick, accrue vacation
time, or have an employer pay half your
SSI burden. You
are responsible
for all of it. If
you are sick you
should certainly
stay home, but
no one will pick
up the financial
loss. You are responsible for all outstanding
debts and making sure the lights will be on
when you arrive the next day. You’re in charge.
You are your own employer. Inconsistent
attendance at work, failing to file and pay quarterly
sales tax reports, ignoring big and small
bills until you get around to them all represent
a recipe for failure. You have the opportunity
to incur a profit or a loss. You are responsible
for daily marketing of your business and consistently
caring for it. Remember the analogy
between owning a business and raising a child.
You can’t neglect your business any more than
a child can be neglected.
6. A business plan is the heart of a successful
business and it must be tended just as
that child must be. It must be reviewed and
updated at least annually or if circumstances
dictate a change. Budgets for marketing, allowances
for reoccurring debts and projected
and realized income are all part of a plan for
success. A good business plan is s pathway to
reach your future goals. It can be modified
as times change, but just as we have to make
plans for a successful vacation, so we have to
make plans for a successful business. In either
case a lack of planning will probably mean we
end up staying home.
7. Dedicate yourself to continuing business
education. If you are going to run a company
and lack the appropriate educational credits
to do so securely, sign up for business classes.
Often the Small Business Administration or
your local community college can guide you
to an appropriate educational program. Having
a teacher in class to clarify issues and answer
questions is critical.
8. Tax-deductible activities require the
expenditure of money to gain the deduction;
they aren’t free. It is a common concept to
spend and deduct. Different activities are
deductible at different rates and you have to
Start-up businesses are much like
raising a child from birth to adulthood
with all the stress and challenges.
spend the money first regardless of the benefit
of a deduction. Evaluate the activities open to
you and select those that best match your goals
and personal commitments.
9. Continuing education counts. This is
one of your best investments. Continuing
education, and/or certification demonstrates
your commitment to your profession and is
becoming more recognized by consumers.
People who do not take additional classes to
hone their skills, or who do not belong to professional
organizations and acquire recognized
and respected credentials are more likely to
fail. Luck is rarely on the side of the entrepreneur.
Luck is on the side of the planner.
10. Follow all state and federal guidelines
for paying employees. Hiring office help
or other staff and paying them under the
table is a recipe for disaster. While it may
temporarily save you taxes, it only takes one
disgruntled employee to report you for illegal
business practices to the IRS so they can
obtain unemployment monies. Dealing with
the IRS for tax evasion can ruin a company
in short order and the liability for false business
practices is high.
Employ all of these business tips to move
your business safely forward and avoid the
all too common pitfalls based on lack of
information.
Judith Culp, a CIDESCO Diplomat has been in the esthetics industry since
1980. A CPCP permanent makeup technician for over 20 years she served a
4-year term as a Director for the Society of Permanent Cosmetic Professionals,
two years as their president. She is president of Culp Enterprises Inc. and
CEO of NW Institute of Esthetics. Judy Culp is available for consulting. For
more information visit www.estheticsnw.com.
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TEXAS STYLIST & SALON | JANUARY 2011 | 7