Brandi Fulton, CEO and founder of Fulton's Accounting Services, discusses how keeping up with your finances can affect your taxes and long-term goals.
As a beauty professional, your passion lies in making clients look and feel their best. However, running a successful beauty business requires more than just talent and creativity—it demands financial responsibility. Keeping up with your finances is crucial for managing taxes, staying compliant with the IRS, and achieving long-term financial stability. Whether you are a spa or salon owner, an independent stylist, or a freelance artist, understanding the importance of financial management can set you up for success in both business and life.
One of the biggest challenges beauty professionals face is tax season. Many stylists and salon owners fail to track their earnings and expenses throughout the year, leading to a last-minute scramble to gather receipts and documents. This can result in missed deductions, filing errors, and even penalties for incorrect reporting. Not to mention you feeling overwhelmed, frustrated, or might even brush your taxes off completely.
By maintaining accurate financial records, you can ensure that your tax returns are completed correctly and on time. Keeping detailed records of business expenses—such as supplies, rental fees, and continuing education—allows you to maximize your deductions and reduce your taxable income. This, in turn, helps you keep more of your hard-earned money. Without proper financial tracking, it’s easy to underestimate how much money you’re making or spending. Many beauty professionals struggle with cash flow management, not realizing that high earnings don’t always mean profitability.
By consistently monitoring your income and expenses, you can pinpoint areas where you may be overspending or identify opportunities to increase revenue. Are you spending too much on product inventory? Are there services you offer that bring in little profit? Having a clear financial picture allows you to make informed business decisions and adjust your pricing, services, or spending habits accordingly.
Without a solid understanding of your finances, securing a business loan or buying a house can be difficult. Lenders want to see proof of steady income, responsible financial management, and a clear plan for growth. By keeping up with your finances, you demonstrate that you are serious about your business and capable of managing its expansion. Many beauty professionals work as independent contractors or self-employed individuals, meaning they don’t have employer-provided retirement plans or health benefits. This makes financial planning even more critical.
By staying on top of your finances, you can start setting aside money for retirement, health insurance, and emergency savings. Contributing to a retirement account, such as a SEP IRA or Solo 401(k), can also offer tax advantages while securing your future. Additionally, keeping up with taxes ensures you avoid unexpected liabilities that could jeopardize your financial stability.
Financial stress is one of the leading causes of anxiety among small business owners. Not knowing where your money is going or fearing a large tax bill can be overwhelming. However, by developing good financial habits—such as maintaining organized records, setting aside tax payments, and creating a budget—you can gain control over your financial situation and reduce stress. When you understand your finances, you feel more confident in your business decisions, allowing you to focus on what you love: making people feel beautiful.
Keeping up with your finances is not just about taxes; it’s about building a strong foundation for long-term success. By tracking your income and expenses, staying organized for tax season, planning for business growth, and securing your financial future, you empower yourself as a beauty professional. Remember, financial success isn’t about how much you make—it’s about how well you manage what you earn. Start today by implementing smart financial habits, and watch your beauty business thrive for years to come!
Brandi Fulton will be teaching a class at IECSC New York, "Beauty & the Tax Code: Simplifying Taxes for Your Beauty Business" on March 24, 2025. To attend this class and learn about the other classes offered at the show, be sure to register here to attend IECSC New York from March 23-25, 2025. What's more, use code AMERICANSPA to get 20% off education classes.