Profit First Will Keep You Poor

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We bust the myth of bragging about salon value and reveal why cashflow is the only number that truly matters for salon owners seeking freedom in their business.

• Value equals ego – what your salon is worth on paper doesn't pay your bills
• Equity equals potential – what's left after subtracting debt, but you can't spend it without selling or refinancing
• Cashflow equals freedom – the money that actually lands in your pocket monthly after expenses
• Profit First works like training wheels but doesn't create true financial freedom
• Like the Savannah Bananas baseball team, focus on creating exceptional experiences for people first
• Systems that create consistent, predictable cashflow are what truly build wealth and freedom
• Many salon owners chase impressive-sounding numbers instead of setting up cashflow systems
• Inside Salon Business School and Million Dollar Beauty Pro, we teach how to build these systems

Share this episode with another salon owner who's chasing numbers that don't matter. Until next time, remember: create the people, and the people will create the profit.

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Episode Transcript

Speaker 1 (00:02):
Hey salon owners, welcome back to the Salon
Success Secrets Podcast, wherewe cut through the noise and
give you the real strategies tobuild wealth and freedom in this
industry.
And today we want to bust amyth that so many entrepreneurs,
especially in the beautyindustry, fall for.

(00:23):
It's the bragging game.
So maybe you've heard it mysalon is worth a million dollars
.
I own millions in real estate.
Sounds impressive, right, buthere's the truth.
Those numbers don't matternearly as much as what people

(00:43):
think, and in fact, they cantrick you into thinking you're
rich when you're not.

Speaker 2 (00:50):
There's only one number that truly buys freedom,
and today we're going to showyou what it is.
And you know now you'veprobably heard of profit first.
You know everybody's talkingabout it, whether it's right now
or you know.
Over the last couple of yearsit's just kind of been a buzz in
our industry and basically it'sthe envelope system your

(01:14):
grandma used.
You know you split your moneyinto jars like once for profit,
once for you, once for expenses.
And listen, it's smart.
If you don't understand moneyyet you know it works like
training wheels.
It keeps you from tipping over.
But the truth is trainingwheels don't win races.

(01:37):
And if you're building a salonyou don't want a balance.
You are sorry, you don't justwant to balance on that.
You know.
On that bike you want to befree.
And freedom.
It does not come from value onpaper.
You know freedom doesn't comefrom equity just in theory, but

(01:59):
freedom comes from true cashflow.
So let's break this down foryou guys.
Are you ready to dive into someprofit first?

Speaker 1 (02:08):
magic, perfect, oh right, it looks like some profit
first magic, all right.
So think about it like this wayIf you have some pen and paper,
this is definitely a writerdowner.
So, if you write three columns,think of one column as value,
one column as equity and onecolumn as cash flow.
Now here's what each of thesemean Value equals ego.

(02:31):
Let me say that again Valueequals ego.
This is what your salon or yourreal estate or any other
business is worth on paper.
Right, it sounds nice, it looksgood on Instagram, but it
doesn't pay your bills.
Equity equals potential, soequity is equal to potential.

(02:53):
This is what's left after yousubtract your debt.
It's better, but you can'tspend it unless you pull it out
or you refinance it or you sellit.
Now, cash.
Cashflow, on the other hand,equals freedom, so cashflow is
equal to freedom.
This is the money that actuallylands in your pocket every

(03:14):
single month after expenses, andthis is the number that matters
most.
So, uh, you know, uh, anexample of this would be let's
see, let's say, you own like $4million in real estate.
That sounds really big.
You're like okay, cool, jen,you own $4 million in real
estate.
Feels good to say, but that'sjust the value.

(03:34):
Like the equity, the part Itruly own is better, but again
it's locked up, unless I sell orpull it out or do something
else with it.
The thing that changes my lifein this instance is the cash
flow that hits my account everymonth, and that's truly what
freedom buys.

Speaker 2 (03:55):
Yeah, Jen, impressive real estate portfolio that you
have, and I love the way thatyou broke that down.
And now let's dive into theSavannah Bananas.
Maybe you've heard of thembefore.
I don't know if you know themor not, but they're a minor
league baseball team and theyflipped the entire game on its
head.
So, instead of focusing onwinning championships or

(04:19):
boasting about their stadiumvalue, they obsessed over one
thing people.
They created a fan experienceso outrageous, so joyful, that
games literally sell out monthsin advance.
You know the players dance, thefans sing.
Truly, every moment is a show.

(04:40):
You know, and here's the lessonIf you create the people, the
people create the profit.
And too many salon owners arebragging about their million
dollar value, which is waydifferent than actually doing
over a million dollars in sales.
There's so much confusionaround that in our industry
right now.

(05:01):
I think that so many people youknow project things and they
imagine things you know.
But, like the bananas, if youfocus on creating an experience,
building trust and taking careof your, your customers truly
Like, those are the people thatreally matters.

(05:22):
Your team, of course, to thecashflow follows the freedom
follows.
That's the real win, yeah.

Speaker 1 (05:33):
So if you think about it like, what does this look
like as um, as a salon owner?
So let's say salon owner, let'scall them a.
Says well, my salon is worth amillion dollars, that's value.
It feels good to brag about it,but it doesn't give you a
paycheck, like Lindsay wassaying.
We hear this all the time.
Or I remember once upon a timeeven my dream was to be a

(05:53):
million dollar salon owner and Ididn't realize.
I was just looking at the valueof it, right, without
understanding all the otherparts that went to it.
Let's say salon owner, let'scall them B.
Says my salon pays me $20,000 amonth and I don't even have to
work behind the chair anymore.
See, that's truly cash flow.
So when you think about that,which one do you want to be?

(06:13):
And this is where we see somany salon owners get stuck.
You know they chase numbersthat sound good, but they don't
set up the systems forconsistent, predictable cash
flow, just like Lindsay wastalking about the Savannah
bananas.
And when we set up thosesystems for consistent,
predictable cash flow, that'swhat truly creates freedom and

(06:36):
that's what pays for vacations,for doing more things, buying
more assets, your retirement, itcould be whatever's most
important to you.
So you know true freedom iscalm comes from consistent,
predictable cash flow.

Speaker 2 (06:53):
Yeah.
And so here's the bottom lineProfit first is fine if you need
training meals, but if you wantto win the wealth game, you've
got to think in cashflow.
You know, because, like Jensaid, value is ego, equity is
potential and cashflow isfreedom.
And when you build your salonaround people, your guests, your

(07:16):
team, your community, you'llnever have to worry about those
big numbers again.
You know, because the rightnumber, the cashflow, it will
always follow.
You know, and that's what weteach inside a salon business
school it's how to turn yoursalon into a cashflow machine
that gives you freedom.
You know, and and truly insideof of salon business school, our

(07:40):
newest program that we're soexcited about, million dollar
beauty pro, that's reallyputting in the systems that are
needed, because that is thebiggest struggle.
You know, so many people arelike, wow, I want more profit.
You know we hear that fromsalon owners all the time.
I want more profit.
And so if you were going tosomebody who didn't understand

(08:01):
business, they would say well,you need to do a profit first.
You know they would slap thesetraining wheels on and they'd be
like good luck out there.
You know, hop on that littletricycle and go to town.
You know, but the truth is likewe want to get you on that
balance bike and have you takenoff into a future of freedom.
And we know it's almost likepeople inside of our industry

(08:23):
We've we've got a podcast on itthat's called which came first,
the chicken or the egg where wetalk about.
You know that the one of thebiggest problems that salon
owners think they have in ourindustry is they don't have
enough clients, but the truth isthey're not keeping enough of
the clients that they get.
Same with this.
So many salon owners think theywant more profit, but the truth

(08:44):
is they don't have the systemsto keep the people coming back,
and so if profit is first andpeople aren't first, you're
never going to win at the salonbusiness game Pro.

Speaker 1 (08:58):
it was so fun to hear the salon owner say last week
that she's seeing growth in herteam what normally would take at
least three to four years.
She's seeing it, and was it sixto eight months?
She said I can't.
Yeah, it was so, so, soincredible.
So, honestly, you guys, thankyou for hanging out with us
today.
You know, if this resonatedwith you, feel free to share

(09:19):
this episode with another salonowner who's chasing numbers that
don't matter.
And so let's help more salonowners step into a real freedom.
And until next time, remembercreate the people and the people
will create the profit.