I think we all go into business with the hope and dream of creating something sustainable that enables us more freedom in our lives while paying our bills. I mean, I don’t know about you, but this is why I went into business.
But business is hard. It’s fun, but it’s hard, and it’s not for everyone.
Something I'm seeing more of are fly-by-night coaches profiting off of "6 Figure" coaching programs. If you don't know what I'm talking about, I am referring to this magical number that business coaches like to throw around, as if achieving $100,000+ is that simple, and honestly, as if it's enough.
Then you have estheticians who are posting content about their $10,000 months when in reality $10,000 and even $100,000 may not be enough to sustain your lifestyle and scale your business depending on your overhead.
For example, in my last studio space $10,000 in monthly revenue would have put me out of business. My rent was $2400, insurance $300, internet $80, car payment $600, parking $200, car insurance $250, Mortgage $1275, Groceries $600, Health Insurance $750, plus 30% of my profit goes to taxes … this doesn’t include savings, contributing to my IRA, things for my son….guys, I’m already in the hole.
So while achieving $100,000 in revenue can be a significant milestone for many businesses and entrepreneurs, the misconception lies in assuming that this revenue directly translates into substantial profit. This is the six figure illusion.
Now I’ll be honest with you - numbers are NOT my thing. I grew up without a lot of money, and I wasn’t taught financial literacy. Most of my life up until my mid-30s was living paycheck to paycheck and yes, I have paid my fair share of overdraft fees.
When I reflect, one of the BIGGEST mistakes I made was putting my head in the sand to avoid the reality and the work. I truly believed that I didn’t have enough money to strategize.
I’ll never forget the day I was going through my financials, (I’m using air quotes because I didn’t even know what I was really looking at) and fully realizing I needed help. Again, numbers are not my thing, but I knew they were someone else's, and I was going to find that someone.
I started with an accountant and then from there hired a money coach. This has been so pivotal in the success I have seen. When I had my consultation with my coach, I remember saying "I make too much money to be this fucking broke". And it was true. I made really good money and yet I never had any.
Through coaching it became clear to me that the reason why I felt like this was because I didn’t have any strategies in place. I was just throwing mud hoping it would stick and that’s the last thing you want to do with your hard earned money.
Through coaching I was able to understand where my money was going, and why $20,000 months seemed like a lot but it left me living paycheck to paycheck.
Now on to sharing some tips on how to get out of the mud...
First, go through all of your recurring expenses and cancel anything that is not critical to running your business. I know this seems obvious and possibly daunting, but it’s true that $5 here and $20 there add up. If anything it will make you accountable and it’s a good money management habit.
Second, think of ways to increase revenue. Sit down with a piece of paper and brainstorm. Maybe it’s raising your prices, or introducing a new service. Perhaps it’s starting an online shop to increase your retail sales - which should be at least 50% of your revenue by the way. Maybe it’s hiring employees (although that comes with it’s own list of to-do’s and potential problems). Examine what is working in your business and do more of it.
Third, face your financials straight on. Stop hiding and stop blindly using your credit cards in hopes that one day you’ll make enough to pay it back. That is not the way to start and scale a business. If numbers are not your thing - there is no shame in that. I spent a lot of my life feeling anxious with numbers and ashamed that I couldn’t understand basic budgets. Problem solving involving numbers is not my thing. Problem solving when it comes to marketing, totally my thing. And you have certain things you excel at too! So focus on what you're good at and from there hire out. I'm not necessarily talking about an employee. Before you take on that financial burden, try to find contract workers or get creative. Find an apprentice to help run your studio, contact a film school to find someone to film videos for you. Where there is a will, there is a way. Basically, focus on your genius, and get strategic about finding help.
Fourth, and so incredibly important, and maybe one of the most asked questions in our FB group Professional Korean Skincare by Kin is…..how much should I price my facials?
This is a loaded question and nobody in any facebook group can give you sound advice because we do not know your financials. We don’t know the cost of your rent, your insurance, debt, basically any of your overhead or what you need to pay yourself to take care of your family. These important details determine how much you should and need to charge. There are a couple of cost per service guides out there - one by Angela Green and one by Melinda Mine. I feel so passionate about this because under pricing services and the mismanagement of money is the death of a business.
