“A BUDGET IS TELLING MONEY WHERE TO GO INSTEAD OF WONDERING WHERE IT WENT.”
-- DAVE RAMSEY, HOW TO GET OUT OF DEBT GURU
Money, money, money, mo-ney! Back when we were just babies in the nail business, we really struggled with managing our money. Come to think of it, we really didn’t know what money was or what to do if it did come through the door. Running a business, especially a small family one, has been one heck of a ride. We started at the bottom, strapped in, and held on tight when things got bumpy. So here we are with a few lessons learned about money management.
Find a way to be ok in the middle space that exists between the ups and downs. Joy, pain, financial growth or pitfalls do not exist in a perpetual state of being. Things always change. They come and go; transient and impermanent. No need to panic. It’s going to be ok if you take the right action.
EARN MORE. SPEND LESS.
There is one truth about money that you need to really commit to memory. “What comes IN must exceed; what goes OUT.” If you’re just starting out or a die-hard in the business, if you earn more than you spend (no matter what state the world is in) you are in relatively good shape. Of course, this was far from where we were financially. Our family faced a crazy mountain of debt and had just a trickle of income. We were living the exact opposite of what needed to be done. We had to make a hard U-Turn in the way we lived, in order to right the financial chaos that was burying us alive. We had to bring in more money, increase our sales, and figure out the bare minimum we needed to survive. Do you know how much money you have in the bank? Do you know how much income you brought in last week or even last three months? Know your totals.
How do you manage money if you are in debt? Take it one day at a time. Your debts did not accrue in a single day. It arrived gradually in boxes from Amazon and bags from Target. It was that boozy girls weekend, extravagant holiday gifts, a quick run for lipstick at Sephora, weekend brunch out, a daily Starbucks habit, and the occasional parking ticket. So don’t expect it to disappear magically overnight either. Debt is financial death by a million $10-$25 impulse buys. The first step to financial well-being is a clear idea of where your money is running off to. It is called a spreadsheet. Make a promise to be aware of where your money goes. Track every single cent. It’s not going to be a perfect accounting the first time out. The point is just to start. Go over your bank and credit card statements. You can begin by tracking all your fixed expenses for your business: rent, utilities (electricity/water), telephone, cable, internet, transportation (car payment/gas/registration/insurance), taxes, healthcare, nail products, cleaning products, laundry, and education. P.S. It’s also super helpful to do this exercise for your personal finances, too. See where you can trim a few expenses back to the essentials. Know your own bottom line.
The steps above will show you whether you can afford to live the life you are currently living. If you can’t afford it, now would be a good time to come up with a few more ways to earn. We took on various side hustles while trying to get Young Nails off the ground. We did whatever we had to do, even move back in with our parents in our twenties. This will take serious discipline, so that you can use some of your new revenue to slowly pay off the debts and pay your bills to keep your business afloat. It’s scary but we believe in you. We know you can do it. Cut down expenses and start paying down debts. This is reality. It’s basic and simple sacrifices. There isn’t a magic pill.
Like the wise and all knowing Snoop Dogg states, “Laid Back...with my mind on my money and my money on my mind.” Wrap your brain around how you deal with money. How you treat your money. Be aware of your daily bank balances. This is not intended to scare you. It’s like the gas gauge in your car or how much battery you have left on your iPhone. You just need to know how much you have so you don’t run out when you need it the most. When we talk about money now, we always want to ask where we need to be in order to break even? Take a look at all the costs involved. Can we afford this? This is a basic exercise. What are your expenses and what do you need to earn just to break even? You need to have an idea of what that dollar amount is. For a long time we had no idea about anything. We’ve been there. There is no room for shame here; just the honesty. There are a lot of nail pros in this exact situation. Maybe you consider yourself a creative type with no aptitude for accounting. Just like everything else, it’s a muscle you can build. Being too busy to get a handle on the numbers is a myth. You can make time for what you decide is important; even if it’s just 10 minutes everyday. We were there but we decided to make a change. It’s the only way you can grow. It’s the only way to stay sane. It’s always important to focus on growing clients. What takes priority over that part of the business is having control over your finances and what you spend. It’s simple planning, really and nothing too intimidating. Take things slow. You can always ask us for help. And it is ok to have days where there is no “going out” money right now; so you can focus on your vision and how to build your business.
**This is an adaptation from our YN Biz Talk playlist on YouTube, “BIZ TALK: HOW TO SUCCESSFULLY MANAGE YOUR MONEY”.
***Follow our YN YouTube Channel and click here to watch the full discussion here: