Is your Business Sustainable?
by Laura O’Hagan
When you hear the question ‘is your business sustainable?’ your mind likely jumps to environmental and social sustainability. There is however, another core component of business sustainability that can be overlooked by spa and wellness industry business owners when they're caught in the daily operations of running their business. That is financial sustainability.
Let’s explore the question, is your business financially sustainable?
Getting crystal clear answers on the business performance is key to long term sustainability, financial reward and achieving your business aspirations. It's easy to prioritise other business activities, before clarity on the financial performance, especially when those numbers seem complex, overwhelming or ‘out of your comfort zone’, however to ensure that your business is here for the long term, it’s vital.
What is a financially sustainable business?
If you want to be in business for the long term, delivering amazing experiences to your clients and guests, the following must be considered and prioritised for financial longevity
Paying a consistent living wage to the owner for their work in the business.
Cash profits that are set aside and available to return to the business owners.
Continuously improving and innovating to drive growth or maintain a mature business.
Clarity
To ensure ongoing sustainability, increased financial reward and the achievement of business goals clarity is required. An understanding of the current financial performance compared to benchmarks and targets that the business could be achieving is key to moving from good to great and fulfilling the potential of your wellness business.
This process highlights areas that are performing well, identifies areas for improvement and forms a plan to move the business to ultimate financial strength and performance. Many owners fear this means cutting back and compromising on the client experience. Improved financial and business performance is quite the opposite, it’s a harmonious balance between the drivers for profitability, growth and client experience.
Common areas of focus that can improve financial performance for spa, health and wellness business owners are:
Pricing study ensuring that every service is priced to be profitable
Expense review to ensure each expense is adding value to the business or client experience
Services evaluation to assess potential eliminations or expansions to the menu of services
Time standards and ensuring all staff are operating efficiently
Increase capacity through improved utilisation of time, team and space
These are a great starting point to review as you assess the gap between current performance and the future state goals you have for your business.
Cashflow management
A clear cash management process is crucial to the ongoing sustainability of a business, with cashflow being one of the common causes of business stress. There is a proven simple cash flow process used by thousands of businesses world wide that ensures owners are managing the money in their business efficiently and effectively. Once established cashflow management provides insight into where the business is financially at any point in time.
Cashflow management helps business owners to track income, profit and expenses on a week to week basis while also ensuring funds are set aside for taxes and the owners salary - two areas that are frequently missed, which cause stress at a later point in time.
A business that is clear on its financial performance, has a plan to achieve its ultimate goals and is managing cashflow is one that is set for financial sustainability. If you’re looking for assistance in assessing your business, managing cash flow and improving financial performance then Laura O’Hagan is a Profit and Growth Consultant who can help you.
Spa and Wellness and Laura O’Hagan have come together to share this information with you so that financial strength and sustainability is built into our community’s businesses. We want to ensure not only is your business here for the long term and delivering exceptional services to clients but that you too are seeing the financial rewards of your business personally. You can schedule a complimentary consultation with Laura here to chat about how she can support you on this journey to business sustainability and improved financial reward from your business. Schedule your call today.
