The Benefits of Charging a Retainer for Your Services: Why You Should Consider Doing It!

Are you currently providing services to clients but not requiring a non-refundable, non-transferable retainer? Are you worried that it might deter clients from booking with you? If you answered yes to both, fear not! Charging a retainer for your services can actually benefit both you and your clients. In this blog post, we'll discuss why you should be charging a retainer the benefits of this policy, and how to transition your clients into this new way of booking appointments.

1. Secure Your Schedule: Charging a non-refundable, non-transferable retainer can help you secure your schedule and prevent cancellations at the last minute. By requiring a retainer, clients are acknowledging their commitment to the appointment. The retainer acts as a guarantee that the client will show up and that their time slot will not be wasted. This way, you can avoid the situation where someone cancels at the last minute, and you can't fill the time slot with another appointment.

2. Protect Your Income: Charging a retainer not only secures your schedule but also helps to protect your income. As a business owner, you invest time, money, and other resources into providing services to your clients. If they cancel at the last minute or fail to show up, you lose income and may not be able to recoup the losses. Requiring a retainer ensures that you get compensated for the work you do, even if they end up canceling.

3. Weed Out Time Wasters: Clients who are willing to pay a retainer are more serious about booking an appointment. They have a higher tendency to show up on time and are less likely to cancel at the last minute. In contrast, people who are noncommittal tend to be time wasters. They may book an appointment but end up not showing up, which can be frustrating for you and a waste of time.

4. Increase Your Professionalism: Charging a retainer also helps you appear more professional. It shows that you take your business seriously and expect the same from your clients. This expectation of professionalism can help you build a better relationship with your clients by setting clear expectations from the get-go.

5. How to Transition Your Clients: If you have been hesitant to charge a retainer but are now considering implementing it in your business, the transition can be smooth if you follow a few steps:

- Give clients plenty of notice: Announce your new retainer policy at least a few weeks in advance, so clients have time to adjust their expectations and prepare for the change.

- Explain the benefits: Outline the benefits of requiring a retainer, such as those listed above, to help clients understand why this policy is in place.

- Be flexible: Recognize that some clients may be hesitant to pay a retainer and be willing to work with them to find a solution that works for both of you. For example, you may allow them to pay a smaller retainer or waive the retainer if they provide a valid reason for cancelling.

- Reinforce the policy: After announcing your new policy, remind clients of the retainer requirement when booking an appointment or service, and make it clear in written communication. This will help avoid confusion and ensure that clients are aware of the policy.

In conclusion, charging a retainer for your services can benefit you and your clients in various ways. From securing your schedule, protecting your income, and weeding out time wasters, to appearing more professional and building a better relationship with your clients. The key is to communicate effectively with your clients and outline the benefits of this policy. By doing so, you can ensure that your clients are committed to their appointments and that your business is running efficiently. Remember that change can be challenging, but by taking the time to communicate effectively, you can implement this policy with success.

Understanding Your Product Margins as a Business Owner

As a business owner, you need to understand your margins on all the products and services that you sell. Knowing your margins helps give you an understanding of how much money you can spend on other areas of your business and what type of products or services you should invest in that will help increase your profits. Let's discuss what a product margin is and the best ways to calculate it.

What Is a Profit Margin?

A profit margin is the amount of money left over after all expenses are paid. It’s also known as "net profit" or "gross profit". A good profit margin is one that provides enough funds to reinvest back into the business, pay employees, and cover overhead costs like rent and utilities. Depending on your industry, an acceptable profit margin can range from 6-20%.

How to Calculate It?

In order to understand your margins for the products and services that you sell, there are three things you need:

  1. gross profit (the total revenue minus cost of goods sold)

  2. operating profit (the total revenue minus operating expenses)

  3. net income (the total revenue minus all expenses)

To calculate these yourself, here are the standard formulas:

  • Gross Profit Margin = Gross Profit / Revenue x 100

  • Operating Profit Margin = Operating Profit / Revenue x 100

  • Net Profit Margin = Net Income / Revenue x 100.

If math isn't your strong suit, no worries! There are plenty of free calculators available online such as The Omni Calculator, Calculator Soup, The Calculator Site, BKL Oberlo Shopify Bidwells NCalculators Bankrate etc., which provide easy-to-use tools to calculate these figures for you.

As a business owner it's important to have an understanding of your product margins so that you can make decisions about pricing strategies as well as investments in new products or services that will help increase profits. Knowing how to calculate these figures is key but if math isn't your thing then there are plenty of free online calculators available to help make this process easier for you. Comment below with any questions that you have about calculating product margins for small businesses!

Tax Write-Offs for Beauty Professionals: What You Need to Know

It’s that time of year again when beauty professionals start thinking about taxes. As a beauty business owner, there are certain write-offs that you need to be aware of. From advertising and marketing expenses to equipment purchases, here is a breakdown of what you can and cannot write off for your beauty business.

Advertising & Marketing Expenses

Any expenses incurred from advertising and marketing your business are generally tax deductible. This includes things like website design and hosting fees, social media management services, SEO services, print and digital ad campaigns, promotional materials such as flyers or brochures, etc. When filing your taxes this year, make sure to keep track of all receipts related to these expenses so that you can deduct them on your taxes.

Equipment & Supplies Purchases

The cost of equipment and supplies used in connection with your beauty business may also be deducted from your taxes. This includes anything from makeup brushes and lash lift kits to salon chairs and skincare products. Just make sure to save all purchase receipts so that you have proof of the expense come tax time.

Travel Expenses

If you travel for work purposes (like attending industry conferences or workshops), those associated expenses may also be deductible on your taxes. Make sure to document any travel costs such as airfare, hotel accommodations, meals while on the road, transportation costs (Uber/Lyft rides or rental car fees). All receipts should be kept handy in case the IRS requests them during an audit.

Car Expenses and Mileage

If you use your car for business purposes, such as running errands or going to appointments, then you can deduct those expenses from your taxes. You can either track the actual cost of gas and oil used in your vehicle, or you can use the IRS standard mileage rate (57.5 cents per mile in 2020). In addition, depreciation (or lease payments), tires, repairs and maintenance, insurance payments, registration fees, loan interest, property tax, parking fees and tolls are all considered deductible car expenses.

Meal Expenses

Meals are a great way to network and build relationships with clients and other professionals in your industry—and luckily they're also tax deductible! However, you must be able to prove that these meals were necessary for conducting business. To do this, make sure to keep detailed records of who was present at the meal and what was discussed during it. You should also keep receipts so that you have proof that these meals were actually purchased by you.

Home Office Expenses

Doing part or all of your work out of your home? Then there are several expenses associated with running a home office that may be deductible on your taxes. These include things like rent or mortgage payments (if using a designated space in your home exclusively for business purposes), utilities (such as electricity, water and internet) as well as furniture (desks, chairs etc.) used in the home office space. Make sure to document these costs carefully so that they can be deducted on your taxes!

Depreciation (or lease payments)

If you own any furniture or equipment used in the running of your business, such as desks and chairs for a salon suite or lash kits for a lash tech, then you can deduct the depreciation on those items from your taxes.

Self-employed health insurance deduction

Self-employed individuals who purchase health insurance may write off 100% of premiums paid

Childcare

Individuals who need child care while providing their services – like needing someone else watch their kids during appointments – may deduct up to 35%

Professional Service Expenses

Any fees paid towards professional service providers like accountants & lawyers which help keep one's books organized & advise on legal issues pertaining to one’s business may be deducted

Startup Costs

Initial costs associated with launching a new venture – like rental deposits & licensing fees – can often be written off

Business-Related Education

Tuition & materials associated with taking courses geared towards increasing knowledge within one’s field may be deducted. This means that all of the courses that you take with The Annex to continue your education can be written off.

Business Interest & Fees

Payments made towards interest accrued via loans taken out by businesses & associated bank fees may be written off

Business Insurance

Premiums paid towards insuring businesses against potential risks – like theft protection – can often be deducted

With so many deductions available specifically tailored toward Beauty professionals , it behooves entrepreneurs within this sector understand what deductions apply. Not only will taking full advantage of all applicable deductions save money come tax season, but it will also ensure compliance with all applicable laws . Being aware of what is allowable when filing taxes helps make sure that each person involved stays ahead financially. As always, seeking guidance directly from qualified professionals either at financial institutions or Certified Public Accountant offices remains highly recommended. That said, knowing which deductions pertain specifically toward Beauty Professionals provides entrepreneurs within this space additional leverage when they speak with financial advisors. Armed with this detailed knowledge should ensure every entrepreneur takes advantage of every available opportunity when filing their yearly returns. Keeping track of all applicable deductions throughout the year simplifies preparation come April 15th ! Having accurate records allows entrepreneurs within this space maximize their return on investment come tax season! Good luck!

Please comment below with anything that I missed to help your fellow beauty professionals!