Being a successful celebrity stylist is more than just having a flair for fashion and an eye for trends. It also requires a solid financial understanding to ensure your business runs smoothly and successfully.
Speaking with Jyotisha Bridges, Celebrity Stylist, who built her business with particular attention to how she managed her money, we look at the critical elements of financial planning that all freelance celebrity stylists should consider when starting their own business.
Bridges leaves you with these financial tips when you are building a freelance business:
1. Cash flow management
When running your own business, cash flow management is essential. The goal should be to keep enough cash in the bank to cover unexpected costs or fluctuations in income to cover expenses. It’s not uncommon to pay upfront on a client’s behalf but it may take time to receive payment from the client. You need to plan for this.
To do this effectively, try keeping close tabs on your outgoings—including rent, taxes, insurance and other expenses—and ensure they are always paid on time. You’ll also need to create invoices promptly after projects have been completed and consistently follow up on unpaid invoices as soon as possible.
2. Secure financing
Once you have created your budget, it’s time to start thinking about financing your business. You may need financing to purchase materials or hire additional employees if needed. Several options are available for funding a small business, such as taking out loans from banks or other financial institutions or crowdfunding campaigns. When seeking financing for your business, ensure that you understand the terms of the loan so that there are no surprises later on down the line.
3. Investing wisely
As well as managing day-to-day finances carefully, it’s essential to think about long-term investing, especially if you want your business to grow over time. Investing in resources such as staff members or new equipment can help make specific processes more efficient and increase client satisfaction; however, these investments must be thought out carefully before being made. You don’t want to unnecessarily drain resources from other areas of the business. Making sure that each investment is worthwhile can help ensure tremendous success for your freelance business.
4. Plan for taxes
In addition to understanding your budget, it’s also important to understand tax regulations for freelancers in your area. In some countries or states, freelancers may be required to pay estimated taxes throughout the year rather than when filing annually. It’s also important to know whether you are considered an independent contractor or an employee, as this could affect how taxes are filed and the amount owed each year. Ensure you keep track of all tax-deductible expenses, such as travel costs related to specific jobs or supplies purchased for styling clients, so they can be deducted when filing taxes. Work with a tax professional to get the right guidance.
The bottom line is that running any small business requires understanding financial matters. However, this is especially true for freelance celebrity styling businesses due to their unique nature and potential for success. By taking the time upfront to set up your businesses correctly, manage your cash flows and invest wisely, freelancers can put their businesses on the path towards long-term growth and success—and hopefully, become one of the most sought-after celebrity stylists.