Profit First Will Keep You Poor

We bust the myth of bragging about salon value and reveal why cashflow is the only number that truly matters for salon owners seeking freedom in their business.

• Value equals ego – what your salon is worth on paper doesn't pay your bills
• Equity equals potential – what's left after subtracting debt, but you can't spend it without selling or refinancing
• Cashflow equals freedom – the money that actually lands in your pocket monthly after expenses
• Profit First works like training wheels but doesn't create true financial freedom
• Like the Savannah Bananas baseball team, focus on creating exceptional experiences for people first
• Systems that create consistent, predictable cashflow are what truly build wealth and freedom
• Many salon owners chase impressive-sounding numbers instead of setting up cashflow systems
• Inside Salon Business School and Million Dollar Beauty Pro, we teach how to build these systems

Share this episode with another salon owner who's chasing numbers that don't matter. Until next time, remember: create the people, and the people will create the profit.

Do you have a question for Salon Success Secrets Podcast?

Send a text or leave a voicemail at (469) 283-5590 or send us an email to hello@salonbusinessschool.com. We would love to hear from you.

Start growing in business and leadership with powerful tools, advice and resources in your inbox every week:

Learn more about Salon Business School Events:

Upcoming Events | Salon Business School

Learn more about Salon Business School Coaching:

https://keap.app/contact-us/4732115411329800

Learn more about Salon Business School for Salon & Spa Owners:

https://keap.app/contact-us/8468267787462617

Are you ready to go all in? Join Salon Business School:

Apply to Join Us! | Salon Business School

Listen to all the Salon Success Secrets podcasts anytime, anywhere here:

Podcast | Salon Success Secrets

Chapters

• 0:41 Busting the Bragging Game Myth
• 1:36 Value vs. Equity vs. Cashflow
• 4:41 The Savannah Bananas Lesson
• 6:12 Creating Systems for Predictable Cashflow
• 8:07 People First, Not Profit First
• 9:49 Episode Closing and Call to Action

Transcript

Speaker 1: 0:22

Hey salon owners, welcome back to the Salon Success Secrets Podcast, where we cut through the noise and give you the real strategies to build wealth and freedom in this industry. And today we want to bust a myth that so many entrepreneurs, especially in the beauty industry, fall for. It's the bragging game. So maybe you've heard it my salon is worth a million dollars. I own millions in real estate. Sounds impressive, right, but here's the truth. Those numbers don't matter nearly as much as what people think, and in fact, they can trick you into thinking you're rich when you're not.

Speaker 2: 1:09

There's only one number that truly buys freedom, and today we're going to show you what it is. And you know now you've probably heard of profit first. You know everybody's talking about it, whether it's right now or you know. Over the last couple of years it's just kind of been a buzz in our industry and basically it's the envelope system your grandma used. You know you split your money into jars like once for profit, once for you, once for expenses. And listen, it's smart. If you don't understand money yet you know it works like training wheels. It keeps you from tipping over. But the truth is training wheels don't win races. And if you're building a salon you don't want a balance. You are sorry, you don't just want to balance on that. You know. On that bike you want to be free. And freedom. It does not come from value on paper. You know freedom doesn't come from equity just in theory, but freedom comes from true cash flow. So let's break this down for you guys. Are you ready to dive into some profit first?

Speaker 1: 2:28

magic, perfect, oh right, it looks like some profit first magic, all right. So think about it like this way If you have some pen and paper, this is definitely a writer downer. So, if you write three columns, think of one column as value, one column as equity and one column as cash flow. Now here's what each of these mean Value equals ego. Let me say that again Value equals ego. This is what your salon or your real estate or any other business is worth on paper. Right, it sounds nice, it looks good on Instagram, but it doesn't pay your bills.

Speaker 1: 3:08

Equity equals potential, so equity is equal to potential. This is what's left after you subtract your debt. It's better, but you can't spend it unless you pull it out or you refinance it or you sell it. Now, cash. Cashflow, on the other hand, equals freedom, so cashflow is equal to freedom. This is the money that actually lands in your pocket every single month after expenses, and this is the number that matters most. So, uh, you know, uh, an example of this would be let's see, let's say, you own like $4 million in real estate. That sounds really big. You're like okay, cool, jen, you own $4 million in real estate. Feels good to say, but that's just the value. Like the equity, the part I truly own is better, but again it's locked up, unless I sell or pull it out or do something else with it. The thing that changes my life in this instance is the cash flow that hits my account every month, and that's truly what freedom buys.

Speaker 2: 4:15

Yeah, Jen, impressive real estate portfolio that you have, and I love the way that you broke that down. And now let's dive into the Savannah Bananas. Maybe you've heard of them before. I don't know if you know them or not, but they're a minor league baseball team and they flipped the entire game on its head. So, instead of focusing on winning championships or boasting about their stadium value, they obsessed over one thing people. They created a fan experience so outrageous, so joyful, that games literally sell out months in advance. You know the players dance, the fans sing. Truly, every moment is a show. You know, and here's the lesson If you create the people, the people create the profit.

Speaker 2: 5:09

And too many salon owners are bragging about their million dollar value, which is way different than actually doing over a million dollars in sales. There's so much confusion around that in our industry right now. I think that so many people you know project things and they imagine things you know. But, like the bananas, if you focus on creating an experience, building trust and taking care of your, your customers truly Like, those are the people that really matters. Your team, of course, to the cashflow follows the freedom follows. That's the real win, yeah.

Speaker 1: 5:53

So if you think about it like, what does this look like as um, as a salon owner? So let's say salon owner, let's call them a. Says well, my salon is worth a million dollars, that's value. It feels good to brag about it, but it doesn't give you a paycheck, like Lindsay was saying. We hear this all the time. Or I remember once upon a time even my dream was to be a million dollar salon owner and I didn't realize. I was just looking at the value of it, right, without understanding all the other parts that went to it.

Speaker 1: 6:20

Let's say salon owner, let's call them B. Says my salon pays me $20,000 a month and I don't even have to work behind the chair anymore. See, that's truly cash flow. So when you think about that, which one do you want to be? And this is where we see so many salon owners get stuck. You know they chase numbers that sound good, but they don't set up the systems for consistent, predictable cash flow, just like Lindsay was talking about the Savannah bananas. And when we set up those systems for consistent, predictable cash flow, that's what truly creates freedom and that's what pays for vacations, for doing more things, buying more assets, your retirement, it could be whatever's most important to you. So you know true freedom is calm comes from consistent, predictable cash flow.

Speaker 2: 7:12

Yeah. And so here's the bottom line Profit first is fine if you need training meals, but if you want to win the wealth game, you've got to think in cashflow. You know, because, like Jen said, value is ego, equity is potential and cashflow is freedom. And when you build your salon around people, your guests, your team, your community, you'll never have to worry about those big numbers again. You know, because the right number, the cashflow, it will always follow. You know, and that's what we teach inside a salon business school it's how to turn your salon into a cashflow machine that gives you freedom. You know, and and truly inside of of salon business school, our newest program that we're so excited about, million dollar beauty pro, that's really putting in the systems that are needed, because that is the biggest struggle. You know, so many people are like, wow, I want more profit. You know we hear that from salon owners all the time.

Speaker 2: 8:15

I want more profit. And so if you were going to somebody who didn't understand business, they would say well, you need to do a profit first. You know they would slap these training wheels on and they'd be like good luck out there. You know, hop on that little tricycle and go to town. You know, but the truth is like we want to get you on that balance bike and have you taken off into a future of freedom. And we know it's almost like people inside of our industry We've we've got a podcast on it that's called which came first, the chicken or the egg where we talk about. You know that the one of the biggest problems that salon owners think they have in our industry is they don't have enough clients, but the truth is they're not keeping enough of the clients that they get. Same with this. So many salon owners think they want more profit, but the truth is they don't have the systems to keep the people coming back, and so if profit is first and people aren't first, you're never going to win at the salon business game Pro.

Speaker 1: 9:18

it was so fun to hear the salon owner say last week that she's seeing growth in her team what normally would take at least three to four years. She's seeing it, and was it six to eight months? She said I can't. Yeah, it was so, so, so incredible. So, honestly, you guys, thank you for hanging out with us today. You know, if this resonated with you, feel free to share this episode with another salon owner who's chasing numbers that don't matter. And so let's help more salon owners step into a real freedom. And until next time, remember create the people and the people will create the profit.