If you don't know exactly where every dollar in your business is going, you're probably leaking money in places you don't even realize, and it's costing you the growth you've been working so hard for.
In this episode, Heather, Jess, Sam, and Mallory break down how to build a real budget for 2027, starting with how to set month-by-month revenue targets instead of throwing out a random percentage and hoping for the best.
You'll learn the three pillars of revenue growth: hiring, price increases, and utilization, and why knowing which one your money is coming from is the difference between hitting your goals and falling short. The team also digs into the critical skill of discernment around spending, how to evaluate whether a flashy investment is actually going to deliver a return, and why "it's a write-off" is one of the most dangerous phrases a business owner can say.
Mallory shares how teaching your team basic financial literacy, like understanding where payroll percentages actually go, creates buy-in that helps everyone hit the goals together.
This episode is packed with practical takeaways for salon owners, beauty professionals, and any small business owner who wants to stop shooting from the hip and start making disciplined, informed financial decisions that compound over time.
HERE ARE 5 MAIN TAKEAWAYS FROM THIS EPISODE:
Takeaway #1: Set Revenue Goals Month by Month, Not as One Number for the Year
Jess has been working with her bookkeeper on forecasting for 2027, and the first thing she does is break the goal down by month. Many owners tell her their goal is to “survive,” or that they’ll just do 10% better than last year. Her spreadsheet starts with what the salon did each month in services and retail, then sets a growth percentage for each month. January is always busy for her salon, so she might push 15% on services and 10% on retail, and then drop to 10% and 5% in February. The goal is to make yourself reach without setting a bar so high that you constantly feel defeated. A flat 10% across the board also undershoots in busy months like October through December, when you could have grown 15 or 20%.
Takeaway #2: Know Where the Revenue Will Come From, and Leave Room for Magic
When someone asks Heather whether next year’s goal should be 10 or 20%, she asks where that money is going to come from. She looks at who was on the team last year versus who’s on it now. She then maps out the three ways revenue grows, which are hiring new people, price increases, and utilization. Hiring brings most of the growth, but you won’t see the results for at least four months, so a January hire won’t add $5,000 in February. She suggests putting the past two years of hires into Claude to see when they started producing. Sam pointed out that this also helps you diagnose things later, because at month four or five you can check whether you hired, raised prices, and worked on utilization. Heather also shared Amy Porterfield’s habit of projecting revenue for each product and leaving “a little room for magic.” Porterfield projected $7 million and ended up with something like $11 million.
Takeaway #3: Be Choosy About What You Spend Money On
Heather got a message about a webinar for a content program with photographers and videographers. Content creation is something she’s working on right now, so it was tempting. She realized that in our vulnerable spots, we see something that could help and want it right away. Before spending, she asks whether she’ll get a return on investment, and whether that return will be big enough. Photographers and videographers are expensive, so it has to be. Jess added that you also have to know you’ll put in the work, because it’s much easier to click “pay” than to sit down and use the thing. If you can’t say how you’ll make it work, it’s likely wasted money.
Takeaway #4: Teach Your Team Where the Money Goes and Track Every Dollar
Mallory has spent two years building financial literacy with her team. Many stylists wonder where the other half of their commission goes, and they’re shocked to learn that 50 to 53% of a healthy salon’s revenue goes to payroll. Once they see what goes into marketing, education, payroll, and benefits like health insurance or an IRA, they have more skin in the game on hitting the goals. Heather added the spending side. She had three people on her team with company cards and a rule that anything over $500 went through her. When the budget got tight, she sometimes had to message her leadership team to stop ordering pizza and coffee. Eventually they tracked every dollar in a spreadsheet, noting who spent it and what it was for. That way the bookkeeper never had to ask, “What was this?”
Takeaway #5: Profit and Cash Flow Tell Different Stories
When Jess meets with her bookkeeper, she asks where they can improve, and her bookkeeper tells her they’re already running pretty frugal. Before any bigger purchase she emails her first, and she’ll admit she’s sent the same question about advertising about 500 times. It’s not about permission. She wants to avoid shooting the salon in the foot when she looks at the P&L in February or March. Heather said those habits compound, and that small things add up, like $17 here and there over a quarter. Jess also pointed out that an expense is not a write-off. Your profit margin might look good, but after you pay yourself and any loans or interest, your cash flow can dwindle quickly. Swiping the card because it was a good month is how that happens.
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