I think we can all agree 2020 has been a very trying year. But even though 2020 brought a lot of struggle, it also allowed us to take a breath, look at our businesses, look at our lives, and really prioritize what’s most important.
For some, that’s meant cutting back hours and no longer allowing their clients to dictate their schedule. For others, it’s meant rising prices after three years of not having an increase. Or maybe you dove deep into your numbers and really took a hard look at the financial future of your business. (On a personal note, I think 2020 allowed us all to really open our eyes to what’s most important in life. I believe most would agree that means health and family.)
Since we’re winding down and will likely have some downtime over the next week, I wanted to share some ideasa on how to end this year in a very positive way.
Whether that means setting yourself up for success in 2021, focusing on the last few days of revenue for your business, or just celebrating your wins this year, you deserve to end this year on a high note. Here are some ways to do just that.
Reflect and Give Yourself Recognition (30 Minutes – 1 Hour)
Grab a notebook and write out at least three wins you’ve had this year. This could be both personal or professional. And remember, it doesn’t matter how big or small. It could be you have been selling more retail, gaining more new guests, taking more time out for self-care, finally putting that time aside to spend more quality time with loved ones. What were your wins? Write them out and find a way to celebrate them. You truly deserve it.
Get a Head Start on New Year’s Resolutions (1 – 3+ Hours)
Start to make a list of some of the goals you want to achieve in 2021. Maybe you want to move into a larger suite. Maybe you want to dedicate 30 minutes a day to reading or take an early morning walk three times a week before fully diving into work. Maybe you want to start to calculate what it would take for you to make more revenue in 2021.
This week, brainstorm a few goals and write them down, so you’ll be ready to start strategizing when we’re back to work in January. If you have more downtime than expected over the next few days, you can also start to set up a strategy on how you are going to make those goals happen. Goal-setting is one of the keys to success. I think it’s a great idea to start jotting some ideas down now to get a head start.
Do Some Financial Grunt Work (a Few Hours – a Few Days)
My last tip is to really hunker down on your bookkeeping for the year. Bookkeeping is one of those things that we can sometimes push off until the last minute. But I really want you to create some consistency before you move into 2021.
My friend and licensed CPA, Michelle Cook, always has the best advice. She works with stylists and owners across the country and is my go to for all things taxes and bookkeeping. Here are her top tips:
Categorize and Reconcile All Transactions
We all know we should be doing our bookkeeping every month, but let’s be honest: Sometimes, it’s easy to let it slide for two or three, or even 12 months. The problem is that if you wait until the last-minute to get it done, you have lost out on the opportunity to maximize your tax deductions. Set some time aside to categorize all your income and expenses. And don’t forget to reconcile, which is a fancy accounting word that means “make sure you didn’t miss any transactions or accidentally enter one twice.”
Double Check Your Tax Savings
Now that all your income and expenses have been categorized, you know how much profit you made. Yay! As a general rule of thumb, you should save 30% of your profit for income taxes. Make sure you have enough saved up. January 15th is the deadline for fourth quarter estimated taxes. Sure, paying taxes isn’t sexy, but it’s way better than a payment plan.
Invest in Your Business
Do you have some extra cash in your business? Have you been saving to purchase any upgrades? If you haven’t yet, consult with your accountant and decide if you’re better off buying now or waiting until the New Year.
(Don’t beat yourself up if it’s too late to sort this out for 2020, either. Set a calendar reminder for late 2021 to make sure you don’t miss the chance next year!)
A W-9 is the form you have a business fill out so that you have the information to issue the 1099. Anytime you pay a business more than $600 through cash or check for services or rent, you need to issue a 1099. They’re actually super easy to do, especially if you use QuickBooks. 1099s are due on January 31st, and I promise you don’t want to stress about chasing down the information close to the deadline.
One commonly misunderstood fact: booth and suite renters should be issuing their salon owners a 1099 for the rent paid. Here’s a link to the W-9 form you can give to the salon owner to fill out.