November - Stylist and Salon Newspapers

Prepare to Learn from the Best in BeautySet to take place January 31 to February 2, 2009 at the Long Beach Convention Centerin Long Beach, California, the West Coast’s largest beauty event, the International Salon andSpa Expo (ISSE), brings together the highest quality manufacturers, valuable educationalopportunities and a professional atmosphere—all under one roof.There is no better way to invest in one’s career than by staying current on the latesttools, techniques and practices that are shaping the professional beauty industry. The expowill offer beauty professionals the opportunity to learn everything from styling techniquesto how to run a profitable salon.With over 400 top quality exhibitors and a sold-out show floor, the expo guaranteesanother action packed event with industry leaders such as Martin Parsons, Kim Vo, OrlandoPita and T3 Micro, Karg and Blackwell, Charlie Price, Bennie Pollard, Sassoon Academyand the first ever Hiroshi and Mogi combined class to name a few. Complimentary educationclasses will cover everything from hair, nails, skin and business practices.The International Fashion Theater will have inspiring performances by some of theindustry’s most talented platform and in-house creative stylists from the U.S. and abroad.The Latino Fashion Group will present the Latino Fashion Theater, which will nowbe on the arena show floor. Additionally, the Professional Beauty Association has partneredwith the National Latino Cosmetology Association to give a voice and platform to theHispanic community, which continues to grow within the beauty industry.At the Technical Theater (some sessions require additional investment and there islimited seating), you will be able to watch the pros in action and learn new cutting andstyling techniques. These classes feature the hottest names in hair design showcasing theirlatest methods.New for 2009, Massage Wellness and Education will offer continuing education creditsfor licensed massage therapists.The International Salon and Spa Expo is produced by the Professional Beauty Association. For more information about the association, visit probeauty.org or call 800-468-2274. For a complete list of classes offered at the expo, visit probeauty.org/isse/education. Purchase tickets to the expo at probeauty.org/isse or at select authorized stores.Understanding ProfitabilityBy Ken CassidyIt’s not what you know… it’s what youdon’t know that can make the difference inhow successful you are in the beauty industry.Why is our industry afraid of its businessside, afraid of fully understanding ownershipor management? Could the fear of becominga businessperson be making us afraid of losingour creativity, which is the thing that has madeus successful to this point in our careers?The facts are the opposite of this fear;therefore, we must be willing to walk throughour fear. We need to gain understanding ofhow we can have a better business and enjoythe benefits of that business.A person can be just as creative in businessas in the services one provides—which givesyou the best of both worlds. So when youunderstand profitability, then the real value ofhaving a profit and loss statement becomesobvious to you.Such statements are part of the financialpicture of a business. A greater understandingof where income is generated and the cost toproduce that income becomes clearer whenan owner starts receiving their profit and lossstatements. This statement, if received at leasttwice a year, will serve as a tool to forecastthe temperature of the business. Is it runninghot, mild or cold? How good or bad is yourbusiness doing?A problem exists with the way mostpeople create a profit and loss statement. Toooften, they dump things into a single category.Therefore, most owners do not attain a realunderstanding of where their profits and lossescome from. This is especially true if you haveemployees or booth renters, or a combinationof both.For example, if there is a partnership andpartners produce revenue, each one shouldhave their own income category. This is a greatvalue to them, as it tracks partners’ value inthe partnership. Next all employees shouldhave a separate category to track their income,or perhaps a few categories to list each typeof income they generate. And if you havebooth renters, then you will have three newcategories to track income.Another problem many profit and lossstatements have is when all the retail income islumped together. Here it is good to have threedifferent categories: one for the owner’s retail,another for the staff’s and renters’ retail andone titled “other,” as in walk-in sales or noncommissionsales. Without receiving this typeof information more than once a year or afterthe year’s end, how can owners or managerscorrectly make good business decisions, or tryto forecast numbers into the future?For example, if we want to raise ourprices for haircolor, perhaps $3, what wouldthat equal in income at the end of the year?More importantly, how much would it reduceinventory expenses? And would it get usabove the inflation factor for the coming year?Without having this kind of valuable information,by having a well-designed profit andloss statement at your fingertips, how can onemake good business decisions to be profitable?We need the information that will allow us tomake decisions that help our companies grow.The cost of producing income is importantalso. Here again, too many things are lumpedtogether for any owner to make the rightmanagement decisions—whether it is a taxissue, cost issue or compensation issue. Theright information is essential to make the rightdecisions.You need to have a category for what itcosts to keep the door open, like accounting,insurance, supplies and all employee taxcategories.If you are still confused or intimidated bythe thought of trying to understand what mayseem to you to be impossibly complex data, it’simportant to get professional advice. A sampleprofit and loss statement is available by usingthe contact information below—includingthe best category information laid out the wayyou can understand it easiest—and furtherinformation and instructions on how to createand use your own.It is important to understand your business,just as it is vital to understand your craftand your creativity. By understanding profitability,you can better ensure your business’sfuture, and the future of all the people in yourlife who count on you to bring home theincome to keep their families fed.Ken Cassidy has been president of Kassidy’s Salon Management ConsultingCompany for the past 15 years. He is a licensed hairdresser, a salon owner anda licensed cosmetology instructor. For information, call 562-432-4462, fax562-439-6992, e-mail kassidy122@earthlink.net or visit www.kassidys.com. | NOVEMBER 2008 | NORTHWEST STYLIST & SALON