Turnover is Vanity, Profit is Sanity, But Cash Flow is King—Here’s Why

Cash Flow is King: The Key to a Stress-Free Salon Business

You’ve probably heard the saying: “Turnover is vanity, profit is sanity, but cash flow is king.” And when it comes to running a salon, this couldn’t be more true. Many salon owners focus on how much money is coming in and how much profit they’re making, yet they still find themselves stressed about paying wages, VAT, and other bills. The reason? They haven’t planned and managed their cash flow properly.

Why Cash Flow Matters More Than Just Profit

It’s easy to look at your sales and think, “My salon is doing well.” But cash flow is what truly determines whether your business is financially stable. Without it, even a profitable salon can struggle to keep up with wages, VAT payments, rent, and other expenses.

Do you know when your VAT needs paying? Have you set aside funds for staff holidays or prepared for the quieter months of the year? These are the things that can cause financial stress if they’re not planned for in advance.

How to Take Control of Your Cash Flow

The good news? Managing cash flow doesn’t have to be complicated—it just requires a system. Here’s what I teach my salon owners to make sure they stay on top of their finances:

• Pay Your VAT as You Go – Instead of waiting for the VAT deadline and facing a huge bill, set aside your VAT payments weekly as soon as the money comes in. This way, you’re never caught off guard.

• Plan for Expenses Weekly – Every week, allocate money into separate accounts for things like wages, rent, supplies, and other business costs. This helps you see, in real time, how much your business is truly making.

• Include Your Salary in Your Pricing – Many salon owners only take what's left after expenses, but this isn’t a sustainable way to run a business. When pricing your services, factor in your own salary so that the business remains profitable whether you’re working behind the chair or not.

• Prepare for Seasonal Highs and Lows – Every salon has busy and quiet periods. Make sure you’re setting aside money from your peak months to cover the slower ones. Planning ahead will stop you from feeling cash-strapped when business dips.

The Benefit of Weekly Cash Flow Management

I personally pay my VAT weekly and allocate all other business costs into separate accounts every week. This simple system allows me to see exactly how my business is performing week to week, without any financial surprises

By managing cash flow effectively, you’ll:

• Reduce financial stress – No more panic over VAT, wages, or unexpected bills.

• Make smarter business decisions – You’ll clearly see where your money is going.

• Build a profitable business – One that doesn’t rely on you being on the salon floor to survive.

Final Thoughts: Stay in Control of Your Finances

A profitable salon is great—but a salon with strong cash flow is what truly gives you financial security and freedom. By planning ahead, managing expenses weekly, and making sure your pricing supports both your business and your salary, you’ll set yourself up for long-term success.

Are you managing your cash flow effectively, or are you just focusing on sales and profit? A small shift in financial planning could make all the difference!