Running a successful hairdressing business involves more than just styling hair - it requires careful financial planning. Building a budget is one of the most important aspects of managing your business finances. A well-structured budget helps you track your income and expenses, control cash flow, and plan for future growth. Here’s how to create a budget for your hairdressing business that keeps you on track.

1. 1. Understand Your Income Sources

      The first step in building your budget is understanding where your income comes from. As a self-employed hairdresser, your primary source of income will likely be from client bookings. Track how much you earn from different services, such as braiding, wig installs, haircuts, colour treatments, or styling services. If you sell products, include those earnings as well. Understanding your income streams will help you forecast your monthly earnings and create a more accurate budget.

   2. Track Your Fixed Costs

      Fixed costs are expenses that stay the same each month. These might include:

      • Salon rent or studio fees (if you're renting space)
      • Insurance (business insurance, liability insurance, etc.)
      • Software subscriptions (like your FroHub booking system, marketing tools, or accounting software)
      • Wages (if you have employees or assistants) Tracking these expenses ensures that you don’t miss any regular payments and that they’re accounted for in your budget.

   3. Account for Variable Costs

      Variable costs are expenses that can change from month to month, such as:

      • Supplies and products (braiding hair extensions, hair dye, shampoos, conditioners, styling tools)
      • Marketing and advertising (social media ads, flyers, and promotions)
      • Utilities (electricity, water, phone bills)
      • Professional development (training courses, events, or workshops)

      Keep track of these costs so you can adjust your budget if needed. For instance, if you have a slow month and your product supply costs are lower, you may have more flexibility to spend on marketing.

   4. Set a Profit Margin Goal

      As a self-employed hairdresser, your ultimate goal is to make a profit. It’s essential to set a profit margin target to ensure your business remains financially healthy. Subtract your total expenses from your expected income to find your net profit. Your goal should be to keep your expenses low while increasing income. Once you’ve set a profit margin goal, keep track of your progress each month and adjust where necessary.

   5. Build a Savings Buffer

      It’s always a good idea to have a financial cushion for unexpected events. Build a savings buffer into your budget so you can cover any emergencies or lean months. Aim to save a portion of your profits every month, even if it’s a small amount. This will give you peace of mind knowing you have funds available for rainy days, tax season, or any business opportunities that come your way.

   6. Plan for Tax and Other Obligations

      As a self-employed hairdresser, you are responsible for paying taxes and national insurance. Include these expenses in your budget by setting aside a percentage of your monthly income. This way, when it’s time to pay your taxes, you’ll have the money ready. You can also plan for other obligations like pension contributions, loan repayments, or any business-related debt.

   7. Use Financial Tools to Track Your Budget

      To make budgeting easier, take advantage of financial tools and software that can track your income and expenses automatically. FroHub integrates with accounting software like Xero, allowing you to view and track your income from bookings, expenses, and financial goals all in one place. This connection ensures that you stay on top of your business finances without having to manually input everything.

   8. Review Your Budget Regularly

      Once you’ve created your budget, don’t forget to review it regularly. Your business will evolve over time, and so will your financial needs. Track your budget monthly or quarterly to ensure that you’re on track and make adjustments if needed. For example, if you’re earning more than expected, you might decide to increase your marketing budget or invest in new equipment. Regular reviews will also help you catch any discrepancies or overspending.

   9. Seek Professional Advice if Needed

      If you’re unsure about how to set up your budget or need help managing your finances, don’t hesitate to seek professional advice. A financial advisor or accountant can help you optimise your budget, reduce unnecessary expenses, and provide expert insights into managing your money.

Building a budget for your hairdressing business is a crucial step towards long-term success and financial stability. By understanding your income, tracking your expenses, setting profit goals, and using tools like FroHub to manage both your bookings and finances, you can create a budget that works for you and supports your business growth. Make budgeting a priority, review it regularly, and you'll be on your way to managing your finances with confidence.