Money Talk for Stylists: Cash In by Understanding Your Profits

In this episode of the Independent Stylist podcast, host ⁠Jennifer Kenny ⁠discusses the importance of understanding profitability for business owners in the beauty industry.

She emphasizes the need for financial literacy and outlines the three key profit margins:

• Cost of Goods Sold (COGS)
• Operating Profit Margin
• Net Profit Margin

Jennifer also highlights the benefits of using QuickBooks to track these metrics and make informed decisions about pricing and services.

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Takeaways

• Profitability is crucial for running a successful business.
• Understanding your numbers is essential before making pricing changes.
• COGS represents the total cost of products used in services.
• Aim for a COGS profit margin of at least 80%.
• Operating profit margin is what's left after business expenses.
• QuickBooks can provide real-time insights into your profit margins.
• Net profit margin is your take-home pay after all expenses and taxes.
• Set aside 20-30% of income for taxes to avoid surprises.
• Categorizing services in QuickBooks helps identify profitable offerings.
• Focus on services that maximize your time and profit.