KEY TAKEAWAYS: An emergency fund is a must for your beauty business for many reasons. From protecting your livelihood in unforeseen circumstances to replacing equipment unexpectedly, your emergency fund is there for you when you need it most.

Many factors play a role in helping your beauty business thrive. From your education and experience to marketing savvy and customer relations, your personal skills are a big part of finding beauty biz success.

As wonderful as it would be to base your entire beauty pro career around your creativity and relationships with your clients, the financial aspects of your beauty business also matter. Whether it’s streamlining your taxes or perfecting your budget, the money side of things matters.

That’s why your beauty business needs an emergency fund. Read on for more about why establishing and growing an emergency fund is essential.

Your Beauty Business Needs an Emergency Fund 

Emergencies Happen–It’s Best to Be Prepared

The world is an unpredictable place. Sometimes, the unthinkable happens, leaving small businesses to deal with the fallout. Facing emergency situations when you’re prepared and have an emergency business fund to fall back on is the best way to deal with these challenges.

While we all hope that such events rarely (if ever) happen, the reality is that you are likely to face difficulties in your journey as a beauty pro. From economic downturns to health issues, emergencies can take many forms–an emergency fund helps you be ready for them.

Some examples of emergency situations you might encounter are:

• Pandemics
• Economic recessions
• Legal issues
• Property damage
• Natural disasters
• Health problems
• Theft

Any of the above emergencies can cripple a small business, especially if it is unprepared and unfunded. An emergency fund is a safeguard against such situations, buying time and helping you keep afloat as the issue resolves.

Don’t Let Debt Get You Down

Some debt is normal, and there is nothing wrong with responsibly using business credit cards or business loans. When leveraged correctly and with discernment, they can be tools that help you build a thriving business.

However, they are still debt. When emergencies occur, those manageable debts and monthly payments can suddenly become overwhelming, causing your debt to snowball. From missing payments to using debt financing, you can quickly find yourself in a daunting hole.

An emergency business fund helps you both reduce your dependence on debt and prevent the snowball effect from happening if hard times do happen. With the financial flexibility, confidence, and safety net provided by your emergency fund, your beauty business can endure financial hardship without going deeper into debt.

Be Prepared to Pounce on Opportunities

Hard work, talent, perseverance, and more are all invaluable characteristics to have as a beauty pro and a business owner. There is another key element of success that is a little harder to come by sometimes, and that is opportunity.

Many successful people will tell you that their big break came as a result of saying yes to the right opportunities at the right times. Sometimes, this requires nothing more than a commitment, but more often than not, it also requires the financial ability to take those chances and run with them.

Ideally, your emergency fund will remain funded for emergencies (groundbreaking stuff, we know). However, there is a fringe benefit to having resources on hand, including the ability to embrace opportunities that are time-sensitive and require financial investment.

Having capital on hand to expand your business when the opportunity arises is a huge benefit. From investing in new services to opening a second location to meeting increased demand for retail products, having funds available is a must.

Protect Your Beauty Business and Assets

When disaster strikes, your beauty business could be left picking up the pieces. For the more unfortunate small businesses, they may never recover.

Not only is this a horrible outcome for your beauty business, but it also affects your employees, your personal assets (if you signed a personal guarantee with your business loan), your credit score, and so on. In other words, the repercussions of being unprepared for emergencies can ripple throughout your life and your community.

An emergency fund helps you offset or eliminate these dire outcomes by temporarily covering your essential expenses–such as payroll and loan payments–until the situation passes and your beauty business bounces back.

In addition to your business emergency fund, liability insurance is an absolute must for protecting your assets, livelihood, reputation, and future. From slip-and-fall accidents to allergic reactions to skincare products, legal problems can arise from the most unexpected places.

Protecting your beauty business with general and professional liability insurance helps you avoid the devastating consequences of these scenarios without dipping into your emergency fund. Think of beauty pro insurance as another layer of protection between you and disaster when emergencies happen.

If you want to see your beauty business thrive, you’ll want to subscribe to Elite Beauty Society and visit our blog. With fantastic tips, tricks, and insights for beauty pros, you can keep up with the latest trends, expand your marketing skills, and otherwise enjoy valuable industry resources with the click of a button.