We’ve all been there. What salon owner hasn’t had debt? Debt that has you burying your head in the sand and pretending it doesn’t exist. It might feel like a nightmare, but the struggle is real.
Are you drowning in bills? Wishing it would all just disappear on its own? It won’t! It’s up to you to start right now on a plan to pay it down.
To help you, here are my five sure-fire steps to clearing your dreaded debt … once and for all!
1. START WITH THE FACTS
You need to know what you’re dealing with, your numbers – what’s coming in and what’s going out. What can you achieve right now in your current situation? What disposable in-come do you have available to put towards your pay-itoff plan? Know the facts before you do anything else.
As I tell my coaching clients: It’s time to tip the contents out of your handbag and onto the table so you can really see what’s happening.
If you overcommit and pay off big lump sums off your debt, you risk putting your salon business under more financial pressure. If you can’t sustain it, you’ll max out your credit card again when the other bills keep rolling on in. Why set yourself up for failure? You’re much better to know what’s possible and create a plan you can see through to the end.
2. MAKE A PLAN AND KEEP IT REAL
Don’t kid yourself. You need to be absolutely realistic about how much you can devote on a regular basis to paying down your debt. And you must set a timeframe.
Make a list of what you owe, the bills that are weighing you down and any outstanding longterm or short-term accounts. Then:
- Set do-able goals to pay back these amounts
- Identify weekly money coming in and going out
- Consider what you have committed or promised to pay back with creditors or suppliers
- Stop impulse buying; learn self control and educate yourself about money to avoid looping back into the debt spiral (refer Step 5)
No one’s born with money management skills. It’s like learning to drive a car or mastering a musical instrument. When you don’t know, you can feel frustrated and disappointed in your-self.
But when you put intent towards learning, you can make progress fast. It’s never too late.
3. BUDGET IT, TRACK IT, PAY IT OFF
Identify your salon’s weekly income and plan a budget knowing your incomings and outgoings. Budget is not a dirty word. It’s a roadmap, a plan for your spending that allows you to make smart choices with your money. Our “tap + go” society makes it far too easy to spend hun-dreds of dollars without thinking about it. A budget can keep you on the path.
To prepare your salon budget, total your annual salon costs and divide by 52 to give you a weekly figure. Then review your weekly spending to track how you’re doing. Consider hav-ing a conversation with your landlord about paying rent weekly instead of monthly. Look into making similar arrangements for power and phone expenses.
When additional debts crop up, break them into bite-sized pieces and set a goal date to pay them off.
Finally, set alerts on your phone to remind you to prioritise and analyse your budget progress weekly, monthly, quarterly and annually.
4. BE ACCOUNTABLE
Who’s keeping you accountable for your break-free-of-debt plan? Who’s going to check in on you and give you a nudge when you’re struggling? No one said it would be easy, but having someone asking “How’s it going?” can really help.
It needs to be someone who you can trust to call you out on your BS excuses. For my coaching clients, that person is me. And for me, when I have a goal to achieve whether it’s to work with a certain number of clients, to present
on stage or even to lose those extra few kilos that seem to find you in winter, I share my plans with someone I trust. It’s easier to let yourself down than that other someone.
5. THINK BEYOND SO HISTORY DOESN’T REPEAT
What’s your big picture? When speaking to my coaching clients on this topic, I always stretch their thinking beyond the point of when the debt’s gone. There’s nothing better than having a clear vision of what a debt-free you feels like. Write a list of your ‘definition of done’. Read this to yourself and sense what it will be like to no longer fret about debt:
- I only order what I need in regards to stock. No dust gathered.
- I don’t use credit to pay for bills, food, clothes, botox, ANYTHING!
- I have a buffer in my account equal to at least one week’s turnover.
- I don’t let large purchases damage my account.
- I plan for the unexpected. No nasty surprises.
Maintain true change by forming healthy habits. Sure, change moves you beyond your comfort zone, but it will never be as uncomfortable as being stuck in debt.
Every day, ask yourself this: What got me in debt in the first place? What do I need to do to prevent it ever happening again?
As Suze Orman says, “Bad debt is sacrificing your future day NEEDS for your present day DESIRES”.
By putting good habits in place you’ll never have to fret about debt again.
Marie is a specialist ZING salon coach. For more salon wisdom, email ZING at firstname.lastname@example.org , visit the website, find video tips on YouTube or read ZING leader Lisa Conway’s 3 books – The Naked Salon: an essential guide to time, team and money for salon owners , Your Salon Team: the salon owner’s guide to finding, motivating and keep-ing great staff and the latest release Your Salon Retail: the no-nonsense, nohype guide to kick-arse retail in your salon business. www.thezingproject.com.au