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salaries of your skilled therapists to the cost of luxurious oils , calming music and tranquil lighting . These also include rent for your serene location , utilities that keep the ambiance just right , marketing efforts to attract new clients and administrative costs that keep your business running smoothly .
Expenses can be compared to the soothing ingredients in a treatment : necessary for the experience but with a cost that must be managed carefully .
l Net Income : The wellness outcome The net income is the money that remains after all the spa business expenses have been paid . It ’ s commonly referred to as the bottom line . The goal of any spa business is for the bottom line to be positive . While occasional losses can occur due to unexpected circumstances — such as during the Covid pandemic — sustained losses over time are a warning sign that adjustments may be necessary to restore financial health .
Similar to how you assess the effectiveness of a treatment by the guest ’ s response , you evaluate your spa ’ s financial success by reviewing the net income on your income statement . A positive net income indicates your spa is thriving , while a negative one signals the need to reassess and adjust your offerings , pricing or cost management .
Just as a client feels rejuvenated after a series of transformative treatments , a positive bottom line signals a financially healthy and thriving spa .
PRACTICAL USE OF THE INCOME STATEMENT l Comparability : Like how a spa professional evaluates a client ’ s past skincare concerns to craft a tailored treatment plan , the income statement provides spa owners a
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FINANCIAL STATEMENTS ARE THE CULMINATION of the accounting cycle . Once all financial data has been identified , recorded , analyzed and summarized , these statements are prepared to provide a clear picture of the business ’ s financial status .
The Income Statement overviewed here is one of four basic financial statements for any business . Learn more about another of these important reports , the Balance Sheet , in the September issue of Pulse . Watch for future reviews of the Cash Flow Statement and the Statement of Retained Earnings .
18 PULSE n OCTOBER / NOVEMBER 2024