The Pressures and Worry of Financial Stress on Business Owners

Are you a salon owner feeling the weight of financial stress? You’re not alone. In this episode, we dive into the realities that many business owners face, particularly the emotional toll that financial challenges can create. Mental Health UK reported that over 80% of small business owners experience various mental health issues, often rooted in financial worries. We explore the underlying causes of this stress—from irregular incomes coupled with unchanging expenses to the dangers of underpricing services. We offer real, actionable strategies tailored to empower salon owners to take control of their financial futures.

Discover the five key pillars of financial stability: building a buffer, fair pricing, effective cash flow management, diversification of revenue streams, and forming strategic partnerships. These pillars are designed to transform how you approach money in your business. Additionally, we highlight the importance of recognising signs of burnout and prioritising overall well-being to ensure not only your business survives but thrives.

Join us to reclaim your confidence and create a roadmap toward financial freedom. Remember, small changes can create significant shifts in your financial outlook. Ready to make a change? Subscribe to our podcast, share your thoughts, or leave us a review! Your financial peace of mind is just a strategy away.

For more inspiration follow @nicoladcross on Instagram and LinkedIn.
nicoladcross.co.uk

Transcript

Introduction to Financial Stress in Wellness Businesses

Speaker 1 0:01

Welcome to the Profitable Wellbeing Podcast , the podcast dedicated to helping wellness business owners and entrepreneurs better understand their finances and increase profitability , Dream big and create meaningful business plans and plan exit strategies for long-term financial success . Now let me introduce you to your host , Nicola D Cross now let me introduce you to your host , nicola D Cross .

Speaker 2 0:35

Hello and welcome back to episode 24 of the Profitable Wellbeing Podcast , where we are looking into the root causes of financial stress , its impact on your business and your mental well-being and , most importantly , how to take control of your finances so you can create long-term stability and peace of mind . Have you ever felt like your business is running you instead of the other way around ? Or maybe you have that gut-wrenching panic at 2am in the morning , wondering how you're going to cover next month's rent ? Let me reassure you , you're not alone . According to recent studies from Mental Health UK , a significant proportion of small business owners report experiencing poor mental health , with around 80% stating they have symptoms of poor mental health , with common issues including anxiety , disrupted sleep and an inability to focus , often attributed to financial worries and the pressures of running a business . Many also experience depression and panic attacks . This week I had a client who was completely overwhelmed with financial stress . They had to take a week off due to illness their second virus this quarter and on top of closing their business for a full week at Christmas . This has left them juggling cash flow following a slow January . Without a buffer in place . They were left scrambling to make ends meet and the worst part they felt that they had no control over the financial situation . Yet again , can you relate to this ? Have you ever had to dip into personal savings or delay bill payments just to get by ? An increasing number of business owners use personal money or credit cards to pay business debt , especially when starting a business or in the early stages of business development . Especially when starting a business or in the early stages of business development , this can be a risky strategy and it's important to consider the long-term implications of adopting such a strategy . If you are feeling the financial pressures of running your salon , then this episode is for you . Grab a notebook , because I'm going to give you real , actionable steps to help you regain control and build financial confidence in your business . Before we dive into these strategies , I want to share a little bit about my personal journey with financial stress and how it's shaped my approach to financial coaching .

Speaker 2 2:59

A few years ago , I faced a chronic illness that forced me to step back from my business entirely for eight years . To be honest , I had always prided myself in having a solid financial buffer , but as the months passed , I simply wasn't well enough to return to work . All my financial plans and dreams of my forever home slipped away as I watched my savings deplete . It was terrifying . The stress of not knowing if I had enough to cover expenses kept me awake at night . Have you ever felt the same sinking feeling watching your savings disappear ? It felt like no matter how hard I worked in the past , it still wasn't good enough . Thankfully , my husband and I were in business together and he carried the financial burden whilst I spent time in rehab to recover . It was a sad time , as peers bought fancy cars and had exotic holidays whilst we were just getting by financially . But through this experience I learned a lot and I understood the importance of managing your finances and , the most important thing , of controlling your cash flow and implementing solid financial strategies . I developed a plan of nine financial strategies . Salam . Business owners need for financial confidence and freedom , one that allowed me to rebuild my own savings , manage my own business effectively by reducing the hours I was working to reduce my stress . Now my business runs smoother and I don't live in constant financial fear , and today I want to share those strategies with you .

Speaker 2 4:38

So why do so many talented salon owners find themselves trapped in this cycle of famine and feast and the burden of financial stress . Understanding the cause of this is the first step to solving the problem . I'm going to give you five common reasons why salon owners like you end up in cash flow crisis . Number one it's irregular income and fixed expenses . One week you're fully booked , running from client to client . The next week you're staring at an empty appointment book , wondering where everyone's gone Meanwhile . Your bills , your rent , your utilities , product costs and staff wages they all stay the same . How do you bridge the gap between slow weeks and high expenses ? Number two underpricing your services and offering discounts . Are you charging enough for your services ? Many salon owners undervalue their work out of fear that clients will leave if they increase their prices . But if your prices don't reflect your costs , you're going to set yourself up for financial strain and ultimate failure .

Speaker 2 5:46

Number three lack of financial tracking . Do you know exactly where your money is going ? If you don't track your income and expenses , financial problems can creep up unnoticed until they become full-blown crisis . Ask yourself does your accountant provide you with the financial data ? Do you know how much money to set aside for your taxes ? Have you adopted a cash pot system your accountant can offer and provide you with so much more support and advice to help you avoid cash flow crisis and financial burnout . And if they don't , you need to take action and find yourself one that does .

Speaker 2 6:28

Number four no emergency fund . Let's face it , life happens . We get ill , our equipment breaks and family emergencies can crop up and wipe out your cash flow savings overnight . Without a financial cushion , these unexpected events can leave you in survival mode and broken . And finally , number five over-reliance on seasonal income . Are you depending on Christmas and wedding season too much to carry you through the slumps and the rest of the year ? If so , what are your plans for those slower months ? So tell me , which of these do you struggle with yourself ? Be honest recognising the issue is the first step to fixing it . Now let me share with you some solutions , some tried and tested ways you can safeguard your salon business from financial stress .

Speaker 2 7:26

I'm going to share with you my Salon Safeguard Framework , the five pillars of financial stability . This model ensures long-term security and profitability by focusing on key financial and strategic areas . On the first pillar , we have buffer building a financial safety net . Establish an emergency fund to cover at least three months of fixed costs . Start small if needed , but make it a habit setting aside just five percent of your income monthly into a business savings account that isn't easy to access . Reduce your reliance on seasonal income by smoothing out your revenue fluctuations , and implement a robust financial plan that accounts for the unexpected downturns in the economy .

Speaker 2 8:17

Pillar number two has pricing written on it . Get paid what you're worth . Regularly review your pricing structures to ensure profitability and sustainability . If you're undercharging , you're just losing money . You're setting yourself up for burnout . Factor in all expenses , including your salary , before setting your prices . Use value-based pricing rather than cost-based pricing to reflect your skill and your expertise . Implement premium pricing strategies for specialised services . Analyse the current trend of pricing by the hour for your services . I know there are many mixed feelings about this approach , but before you dismiss it , get more information and see if it's going to work for you .

Speaker 2 9:10

Pillar number three we're going to write the word cash flow . Keep the money moving in and out of your accounts . Plan ahead by tracking expected income and expenses . This will help you anticipate slow periods and adjust your spending accordingly . Understand what cash comes into your bank account and what cash flows out . Understand what cash comes into your bank account and what cash flows out . Optimise debtor and creditor days to main a positive cash flow in your account . Keep money in your account for as long as possible . Speak with your accountant . There are so many excellent cash flow forecasting tools on the market that will sync in with your accounting software , like Xero . In fact , today I demoed this with a client and he was instantly addicted to the cash flow peaks and troughs in his business . Before he just thought they existed , but now he had the data to prove it . Remember , data is knowledge to act upon .

Speaker 2 10:15

So pillar number four is diversify and expand your revenue streams . You need to analyze if you could sell retail products within your salon or membership or online groups , tutorials or membership based programs . Having multiple revenue streams makes your business more resilient to change . Introduce tiered service levels to cater for different client budgets . Leverage digital marketing and social media to attract and retain new customers . And this is my top tip . If you do one of these things today , it is diversify your income streams to increase your turnover . And finally , pillow number five is partner . Strengthen your network . Collaborate with complementary businesses beauty therapists , wellness brands , fashion boutiques for cross promotions . Form strategic alliances with suppliers for better pricing and exclusive deals , and partner with a financial expert can help you plan for stability , optimise your pricing and ensure your business stays profitable . I believe all salon business owners need a financial numbers expert in their team .

Speaker 2 11:31

Ask for help if you're struggling to understand your finances . So tell me which one of these strategies would you be implementing today ? Remember , even small changes make a difference . But if you're feeling overwhelmed right now , here's where to start . I'm going to give you five practical steps that will help you regain a sense of control and move towards financial confidence . First of all , let's recognise the signs of burnout . If you're constantly feeling exhausted , stressed or resentful towards your work , these are financial red warning signs that you're already heading towards financial burnout . Pay attention to how your body and mind are reacting to financial stress . In a recent study , two-thirds of business owners reported problems with the inability to focus , anxiety and disrupted sleep . Almost a quarter of them were having panic attacks and more than a third experienced symptoms of depression . And , shockingly , four out of ten business owners put this down to the impact of financial worries of running their own business .

Speaker 2 12:40

Number two prioritize rest and well-being . Your salon cannot thrive if you're running on empty . Make self-care a non-negotiable . Taking care of yourself ensures you can take care of your business , your clients and your employees . I see so many business owners having health struggles due to work stress . I had one client whose IBS was flaring every few weeks , leaving her struggling to stand as she pushed through the day to keep her business ticking over . Now she's planning breaks and holidays every six weeks to mirror her child's school holidays . This is a tremendous transformation in just 10 months of working together .

Speaker 2 13:22

Time freedom from your business is key to holistic business well-being . Number three set boundaries and avoid overworking . Stop saying yes to late night clients or squeezing people in when you just don't have the time or the energy . Start putting yourself , your family and business growth first . Protect your time and your business will benefit .

Speaker 2 13:48

Number four seek professional guidance . You don't have to navigate financial stress alone . A numbers expert can help you create clear plans , identify problem areas and guide you towards stability . Your accountant needs to be a member of your inner team , someone you can speak to before making any financial decisions , to offer support and guidance before you act . And finally , number five make a plan for financial stability . Start small track every penny coming in and going out of your account . Build a buffer savings account and ensure your prices reflect your value . Invest in accounting software and financial education to get an understanding of your business finances . Leave the spreadsheets behind . You need real-time data to grow and transform your business .

Speaker 2 14:42

Even one small change can create a major shift in financial confidence . Which step are you going to take today ? Financial stress doesn't have to control your life . You can create financial stability and peace of mind , no matter where you are starting from . To help you take action , I've created a guide for business owners called Coach Financial Freedom . I've created a guide for business owners called Coach Financial Freedom . It's packed with the nine strategies you need to break free from financial stress and growing a profitable beauty salon . It's packed with the nine financial strategies you need to break free from financial stress and grow a profitable beauty salon . If you're ready to take control of your finances , dm me stability on Instagram at Nicola D Cross and I'll send you the guide , because we all deserve financial peace of mind .

Speaker 1 15:44

Thank you for listening to the Profitable Wellbeing Podcast . If you've enjoyed today's episode , don't forget to follow or subscribe , share this podcast and leave a rating and review To discover more about how you can better understand your finances and increase profitability , dream big and create meaningful business plans and plan exit strategies for long-term financial success . I invite you to book a discovery call with Nicola at nicoladecrosscouk . See you again soon .