As part of our Burning Questions series, we gathered our readers' pressing business questions and raised them to industry experts. Here, Tom Kuhn, Qnity Founder/CEO and CEO of the 2to10 Project, addresses the tough topic of finding financial security in times of crisis.
SALON TODAY: With the industry changing and uncertainty, how do I ensure I am actively preparing financially for what's next?
Kuhn: I’d like to break this down in three general buckets:
1. Find the silver linings.
Find opportunities to become stronger, to implement new practices that put you in a better place than you were before. In my work as a turnaround specialist and during times of financial turmoil, I teach several practices that help find and create silver linings. ‘Push the Pulse’ has you take the things that you previously did once a month and transition to doing them weekly, and things that you used to do weekly, you now do daily. For example, projecting cash flow. ‘Daily Cash Flow Tracking’ is a vital practice to implement. Tracking your cash flow monthly is too long. Weekly is too long. You need to do this daily, and we have a great tracker template in our Plan for Profits program.
Another practice is to have a ‘Name to Every Number.’ For every line item on the P&L, make sure it’s clear who is accountable for each number. Is it the owner, manager, education leaders? This process is also a great practice to spread out accountability for profitability.
2. Recognize revenue vs. profitability.
Don't assume that a drop in revenue equates to a drop in profitability. Salons that are down 20+ percent in revenue are actually up in profitability. Many businesses have used the pandemic as an opportunity to adjust their cost structure, better utilize technology and address flaws in the business model that otherwise may not have been addressed – and it’s showing in their profits.
3. Stay connected.
In times of crisis and hardship, it’s critical to stay connected with others in the industry, your community and with experts in business, finance, innovation, etc. We have seen the power of community through our weekly ‘Financial Roundtables.’ We’ve hosted a weekly ‘roundtable’ for the past 21 weeks. We bring together experts, owners and leaders and discuss timely actionable ways to survive and thrive in business and life. We’ve had many participants tell us this community and information is what got them through the pandemic.
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