If you were able to take advantage of the multiple loan and tax credit initiatives available to small businesses during the pandemic, you may have found yourself with excess cash. For many salons, spas, barbershops and schools, PPP Loans and ERC Tax Credits left Cash Reserve accounts with more money than they have ever had. Minerva Beauty and Summit Salon Business Center have partnered up to help you figure out what to do next for your beauty business.
As it has become abundantly clear in the last couple years, having a minimum three months of operating reserves is definitely a priority. You never know when you may need to cover expenses if there is an interruption to your business.
However, as the Consumer Price Index (CPI) continues to rise with the rate of inflation, the cash we have on hand buys us less and less. So, while it is important to take advantage of fully funding your cash reserve and gift card accounts, there may also be some very good reasons to re-invest some of that money back into your business.
So, what should you do with your excess cash? First things first – you should talk to your accountant and your Summit coach.
“Everyone is coming out of the pandemic short-staffed, and now is the perfect time to invest in training, hiring additional associate as and replenishing the staff,” remarks Dave Kirby, Senior Director of Training for Summit Salon Business Center. “Invest in creating culture, retreats, social gatherings, outings – remind staff that there is an employee experience that is just as valuable to the company as the guest experience.”
“Many salons are going to be receiving large checks from the IRS for the employee retention credit (ERC) in 2022, and the salons that are strategic about how that money is spent are going to be in a great position to thrive in the future,” says Chris Wittich, partner at Boyum and Barenscheer CPA and Business Advisors. “ERC is truly a once in a lifetime opportunity for salons to invest in their business with cash that has no requirements on how the money is spent. The money from ERC can be spent on anything, which includes upgrading or expanding the physical space of a salon.”
When it comes to upgrading the interior of your salon, spa, barbershop or school, Minerva Beauty has you covered. Summit Salon Business Coaches frequently recommend Minerva Beauty equipment to their clients for remodels, updates, and additional location build-outs. With Minerva Beauty’s newly renovated showroom at almost 25,000 square feet displaying a vast selection of premium salon, spa, and barbershop furnishings, you’ll discover a variety of styles and color options to suit every aesthetic. You can also shop the Minerva Beauty website to browse our entire collection of over 15,000 products including salon seating, styling stations, shampoo systems, pedicure chairs, massage equipment, and more.
“We know many beauty professionals took the challenges of the pandemic in stride and utilized that time to plan a renovation of their existing business or open a new space altogether,” says Megan Ferlito, Director of Marketing at Minerva Beauty. “Now is the time those plans come into fruition, and everyone here at Minerva Beauty is eager to help turn those salon, spa, or barbershop plans into action. There is so much to be gained by reimagining your business aesthetic; customers are eager to spend time and money where they can feel and see the value.”
Whoever said “cash is king” was right; it’s extremely important to have cash on hand, and many of our salons, spas, barbershop and schools are in a very healthy place right now. But at the same time, you don’t want to keep too much cash on hand. By employing the right strategies, you can give yourself security set your company up for long-term success.