Beauty Industry Update Regarding PPP Loans

IMAGE Studios Beauty Industry Updates

There’s a lot of news out there right now, and it can be overwhelming during these uncertain times. IMAGE Studios is sorting through the noise to help you understand what it means for you & your business.

More PPP funding expected: Apply to be first in line

The government is expected to pass a new stimulus package this week which includes an additional $310 billion for the Paycheck Protection Program (PPP), providing more sole proprietors, independent contractors, self-employed, and small businesses with the opportunity to receive the forgivable loan. With a high demand for PPP funds, it is likely that the additional funds will be distributed quickly. Many applications are already lined up to receive the next round of funding, so it is recommended that you apply as soon as possible to get your application in line. It’s highly recommended that you apply through your bank, as people with accounts get preferential treatment during this process.

What is the PPP?

PPP loans are part of the COVID-19 government stimulus program (CARES Act) and are made to help sole proprietors, independent contractors, self-employed, and small businesses cover payroll and other business expenses like rent and utilities. The original funds were quickly exhausted, and more are expected to be distributed soon. This includes payroll for yourself, even if you have 0 employees. When used for qualifying expenses, you may be eligible for a 100% forgiveness grant, meaning you wouldn’t need to pay it back if you meet their criteria (find more info here).

Am I eligible for the PPP if I don’t have any employees?

Yes, you can still apply for the PPP. Even if you’re a sole proprietor, independent contractor, or self-employed, and have no employees, you can apply. Your own net earnings count as qualifying payroll costs, which you can find on your 2019 Form 1040-C.

How do I prove my payroll costs?

Depending on your type of business, you can use your 2019 Form 940/941, 1040-C, K-1, tax returns or W-2 statements (if you issue them).

What To Do Now

Step 1: Gather Your Info

Here’s our complete list of business info you’ll need when it’s time to file the PPP application. When you access the application below, you’ll be walked through how to submit it.

  • Payroll records: you will need payroll tax forms (i.e. Forms 940 and/or 941) from January 1, 2019, to the most current filing. Note: You will need to be able to identify any employees paid over $100K. Sole proprietor or independent contractor? Get your 2019 1040 Schedule C too.
  • Tax returns: for the last two years. If you haven’t been in business that long, all tax returns you have.
  • 1099-Misc (if applicable): If you have filed form 1099-Misc and are counting contractor compensation as part of your average payroll, you will need to provide this form.
  • Copies of driver licenses: for business owners with ownership stakes of 20% or more
  • Voided check: from the account where the loan will be deposited.
  • 6months of bank statements: from your business accounts for the most recent six months of business.
  • PPP Worksheet: Download and fill out the PPP worksheet here. Watch this video for a step-by-step on how to fill it out.

Step 2: File Now

Apply now directly with your bank. Don’t delay. Even though funds have run out for PPP, it’s expected more money will continue to open up so it’s important to get your application in now to secure your position in the queue. If you do not have a banking relationship that you prefer to use, we recommend Cross River Bank.

Our partner, GlossGenius, is working with SBA approved Cross River Bank and they are continuing to accept applications ahead of the anticipated funding (even if you’ve never banked with them before). While they can’t commit to providing loans until the government approves the additional funding, it’s best to apply now so you’re first in line. Watch this video if you want help walking through the application and this video that will show you how to fill out the spreadsheet that is part of the application.

Please note: As of April 20, Cross River is still reviewing and accepting PPP applications, however, the funds allocated by the government for the PPP have run out. If additional funding is authorized, it may be helpful to apply now and get in line.


Step 3: Help Others 

There’s a lot going on, but thankfully there’s a lot of help. If you know other business owners struggling, please send this page to anyone you think should be applying for PPP.

Overview of SBA’s Economic Injury Disaster Loan (EIDL) Relief Package for Image Pros


The Small Business Association Economic Injury Disaster Loan Program (EIDL) is a program in response to natural disasters that has been expanded to include the COVID-19 pandemic. The EIDL program provides small businesses like yours with working capital loans that can help you pay expenses during the time of temporary loss of revenue you are experiencing right now. You can apply for an EIDL advance of up to $10,000, which is a grant and you do not have to repay. It’s important to understand that under the new guidelines for EIDL you can apply for $1,000 per employee, up to $10,000 max for the portion of this loan that is a grant and is not owed back. If you find this program is right for you, then we recommend completing this application as soon as possible.

Click here to apply online.

Below is a video that outlines the process of applying for an EIDL loan on SBA’s website.


Salon Expense Calculator

To help you understand what you expenses are we’ve created this nifty expense calculator. Just enter your actual expenses to see what your daily, weekly and monthly break even is.

Estimating Your Taxes

The end of the year is nearing and as a salon owner you will want to make sure you budget your finances properly so you don’t get stuck with a tax bill on April 15th. Hopefully, you have kept records of your sales for the year, and equally important you’ve kept meticulous records of your expenses in order to write these off as part of the cost of doing business. If you have not, now is the time to start collecting your bank statements for the year so you can total up your revenue for all sales and services you performed as well as categorizing each expense you incurred during the year so they can be properly expensed. Using accounting software will help with this process, I recommend using Wave Accounting, its an online accounting app that works in all major browsers (Firefox, Chrome, Internet Explorer, etc) and best of all, its FREE. This accounting software lets you enter your revenue, enter your expenses into different categories that they have put together already (which you can further customize), and it syncs with your bank accounts online so once you go through the initial setup everything is then sent automatically to Wave and all you have to do is assign categories for your expenses and income. This is an excellent way to do your accounting because most of you don’t have the time to dive into a new software program and spend countless hours trying to learn how it works. Wave Accounting will have you up and running in under an hour. To sign up for their free service go to

If you are not comfortable using Wave Accounting and you have your own method of tracking your income and expenses then definitely keep using it. My general rule of thumb is if something is working for you, keep doing it! Everyone has a different style of doing things and that is ok.


Believe it or not most business owners don’t know their actual income until the end of the year, sometimes not even until the beginning of the next year. Knowing your income is valuable because you can plan much better for your salon, purchase equipment, advertise and market more, or if need be, cut expenses if your income isn’t what you thought and your expenses are more than you had hoped for.

To start calculating your gross income (before expenses) you will need to go through all your bank statements for the year and total up all your deposits for services & products that you sold. If you have other sources of income through your salon then go ahead and add them to the list. Be sure to add up everything you have taken in as revenue for the year to come up with your total. If you use Square, Paypal, or any other point of sale software you can also run reports within that system and compare to your bank statements to ensure everything matches.


This is an area that you definitely want to keep perfect records for because most (if not all) of your business related expenses can be written off at the end of the year as a cost of doing business. Here are some examples of things that can typically be expensed (within the allowed limits by the IRS) at the end of the year for your hair salon that a lot of people forget about:

  • Education Classes
  • Rent
  • Business Cell Phone/Landline
  • Insurance policies, business licenses, health department licenses, etc.
  • Bank Charges
  • Supplies
  • Color and backbar
  • Interest on business loans and credit cards
  • Vehicle mileage to and from your salon (or your vehicle lease, but an accountant can give you the pros and cons of each scenario for this)
  • Tuition and fees

NOTE: These are not the only things that you can write-off at the end of the year but are someof the most common items you will want to be aware of and keep track of so you can claim these at the end of the year. Consult a professional tax accountant to ensure you get the maximum allowable write-off for your taxes at the end of this year.


At the very minimum you should expect to pay about 16%-25% of your income in federal income tax to the IRS at the end of the year. Based on your tax bracket/earnings you may be higher or lower than this. A good rule of thumb is to set aside at least 20% of your monthly revenue into a savings account that you can use to pay taxes from, and hopefully be left with some left over cash at the end of the year if you keep track of everything. This will set you up with a fairly good amount of tax money to use to pay Uncle Sam and if you owe more than you set aside you will at least have a head start on what you have to come up with out of pocket.

If you wait to file your taxes at the end of the year you may also be charged a penalty by the IRS for not filing quarterly, so make it a habit to keep track of your expenses monthly so you can file a quarterly tax return throughout the year and avoid additional penalties and interest from the IRS.

*It is important to consult a licensed tax professional to understand your actual tax liability and exposure. This blog is for information purposes only and is not meant to substitute as advice from a professional. All reasonable means were used to compile the information.

Calculating the Lifetime Value of a Client

Do you have clients who have been coming to you for years, and then have other clients who come for a couple of appointments, only to never be seen again? Most of us shrug it off as no big deal, but when you realize the value of a lifetime client (the actual $$$ that client brings to you over their lifetime with you), it may make sense to reach out to past clients you haven’t seen in a while to try and get them back in.

To calculate the value of a lifetime client you would do the following:

  • Estimate how many times one client visits you per year on average (EX: 5 times per year)
  • Estimate what your average ticket is (EX: $75.00)
  • Estimate how long you typically retain clients (EX: 4 years)

So if a client with an average ticket of $75 visits you 5 times a year, then that single client brings in about $375. If you typically retain clients for an average of 4 years, multiply $375 per year X 4 years and you get $1,500. This would be your typical lifetime value of one client. ONE. It’s a little scary to think what you lose when a client stops coming!

With that said, what discounts or special offers would you do to gain just one more retained client? What could you do to contact them to get them back in? Do you know when their birthday is? How about their anniversary? If you have no client info records, that is a whole other topic, and will be addressed in an upcoming blog.

Reactivating old clients and getting them back into your schedule is also the cheapest way to build your business quickly and effectively. They already know who you are, they’ve been to you before, all you need to do is figure out how you can get them back in your chair!

Think of it this way – they are sitting in someone else’s chair. Why? If they are going to sit in any chair, it needs to be yours! Start today with an action plan on how you can make this happen. Your wallet will thank you!

Holiday Marketing Ideas

Are you looking for some marketing ideas this holiday season? Take advantage of the busiest time of the year and generate more sales and revenue to help make up for the painfully slow months after the holidays are over.

Black Friday:

Use this day as a springboard to sell gift certificates at a discount or offer a discount to any current clients who book a future appointment in January/February. An incentive now will help motivate people to book that next appointment after the holidays which means you can be confident your schedule will stay booked solid, even after Christmas.

Cyber Monday:

This relatively new holiday has become more and more popular each year that drives people to find deals online. If you have a website or webpage (which everyone at Image Studios has already, contact us if you don’t know where to find it) you can post a deal online that offers clients a discount on product, a % off any gift certificate, BOGO offers, etc. You can have them call you to complete the purchase or you can use an easy-to-use online web form (100% free) called to create a form they fill out that will take them to a checkout page to purchase everything online. This takes about 10 minutes to do and all you need is a paypal account to accept payment. Don’t have a paypal account? It’s easy and takes 5 minutes to do, go here to sign up now.

CONTACT ME DIRECT if you want help setting up the Wufoo form and payment page. I would be more than happy to help you do this and you will find it an invaluable tool you can use for future offers down the road. Also, if you want to update your info on your webpage within the salon directory let us know immediately so we can update that for you in time for the holidays.

Christmas Gift Certificates:

This can be one of your most successful ways to sell gift certificates this holiday season. We have pre-printed blank gift certificates (Image Bucks) you can purchase here, or you can use your own. The purpose of this is to sell as many gift certificates during the holidays to your clients. Here is how it works:

  • You mail four (4) gift certificates to your client (or hand to them in person), each in its own envelope.
  • Three (3) of the gift certificates are blank except for the dollar value that you choose (typically $25 or $50 value), the fourth certificate is made out to your client for the samedollar value as the other three certificates.
  • Enclosed with the gift certificates is a letter from you with something like this:

Dear (Client):

The holiday season is coming up quick and I want to help make your gift giving a little easier this year. Enclosed are three gift certificates for $25 each(or $50, whatever you choose). These are for you to give as gifts to friends and family and can be used for (product, service, etc) at my salon. To show my appreciation for you I am giving you the fourth gift certificate (the one you made out in their name) to you free of charge. To purchase these certificates call me at (XXX) XXX-XXXX and I can complete the purchase over the phone. All gift certificates must be pre-purchased for the offer to be valid. HAPPY HOLIDAYS!

You will need to keep track of who calls and pays for their certificates to ensure none get used that were not paid for (since you are sending them blank ones with no names on them). Also, it is important that you make purchasing these gift certificates as easy and seamless as possible. You can take a credit card over the phone using Square or you can create an online form for them to go to where they can complete their purchase online through Paypal. Again, please feel free to contact me if you would like help doing this, it only takes a few minutes and once I walk you through the first one you will be set to do them on your own after that.

The idea of the gift certificate offer is to facilitate the hassle of buying gifts for so many people by putting them right in front of your clients. To show your appreciation for them you offer them a gift certificate of the same value at no charge for them to use. If you do the math you are giving 25% off all four certificates, or three at full price and one for free, whatever way you choose to look at it. Keep in mind that the three gift certificates they purchase to give to friends and family most likely will be new clients who have never been to your salon before. The value of a lifetime client is worth thousands and thousands of dollars, so never underestimate the cost or discount it takes to acquire just one new client. It pays for itself ten-fold.

In addition, these gift certificates will be given at or around Christmas time which means these recipients will be wanting to use them come January or February, typically the slowest time of the year for salon owners. This will help keep your books full after the holiday season. Best of all the gift certificates are pre-paid up front, so you get the money at the time of sale and can set this aside for the new year.

I highly recommend you take advantage of the holiday season to help generate more income for your salon!

Happy Holidays,

Jason Olsen

Salon Banking – 10 Helpful Tips

Small business accounting for your salon can seem like a daunting task, especially if cash flow is tight and you don’t think you can afford professional help. Here are 10 simple tips to help you keep track of your money and avoid being caught unprepared at tax time:

  1. Open a separate bank account for your salon. This will help distinguish between personal and business transactions and make tax filing less complicated.
  2. Organization is key. Consider a large binder, divided by months, to keep bank statements, receipts and deposit slips. This makes for easy referencing and will protect you in an audit.
  3. Avoid using cash. Cash is difficult to account for, track, and prove if the IRS wants documentation of what was purchased. My recommendation? Use business checks or your business debit card to make purchases. For example, If your Landlord ever says that you have missed a rent payment, it’s easier to look back through your bank statements than to search through receipts, if you remembered to get one in the first place.
  4. Save Receipts. Make sure you save all receipts! Let’s say you go to Costco and purchase ink, a garbage can and broom for your salon. Unless you have a receipt itemizing the business charges, the IRS may think you are purchasing personal items. It’s not enough to use a debit card or check to pay for purchases, you’ll need an itemized receipt as well.
  5. Record Deposits Correctly. Take a minute to notate on a deposit slip what checks are being deposited and the dollar amounts. Typically there are a myriad of deposits that happen within a business checking account: loans, personal transfers, income from services, income from product sales, etc. If the deposits are accidentally treated as income when they were actually a loan or a transfer from a personal account, you may pay taxes on more money than you made.
  6. Home Deductions. If you work from home, keep records of your personal expenses, you may be able to deduct a percentage of them as business expenses. These may include rent/mortgage payments, utilities, cell phones, paper, ink, etc.
  7. Keep a Mileage Log. If you want to deduct mileage on your tax return the IRS requires documentation. You cannot count miles driven to the primary work location, but miles driven from your first work location to a second work location are tax deductible. Consider a phone app to help keep track of miles.
  8. Don’t Use Credit Cards. Having credit available can be a lifesaver in an emergency, but according to a study by Dunn and Bradstreet (the #1 credit reporting bureau for businesses), credit card users spend 15-­‐18% more when using credit instead of cash. Early last decade when McDonald’s began accepting credit cards, they found the average transaction rose from $4.50 to $7.00.
    Bottom line? If you are using credit to earn a 1-­‐5% reward you are still overspending! If you are using credit to earn airline miles, Consumer Reports stated 75% of airlines miles are never redeemed. In addition, CardTrak reported 60% of people don’t pay off credit cards every month. So not only will you be overspending, you will most likely be paying interest on those charges! My recommendation, avoid using credit cards if at all possible.
  9. Save I recommend setting aside 20% of every dollar earned (gross amount) into your business savings account for taxes and future unforeseen expenses. This helps ensure you have money to pay Uncle Sam and avoid unforgiving government penalties and fees for missed or late tax payments. This money will also help you avoid using debt for future expenses. In addition, keep at least enough cash in your business checking account to cover one months worth of operating expenses (rent, supplies, anything that is a regular expense, etc). This will help you avoid bank overdrafts, insufficient fund fees, and save you in case cash flow slows for any reason.
  10. Easier to remember now. Go over your accounts at least on a monthly basis, making notes on bank statements, attaching corresponding deposit slips and receipts and filing them in your tax binder.

Many small business wait until the end of the tax year to organize their financial documents, and by then, are unable to remember many details. This hurried, generalized accounting can result in errors and lost tax deductions.

If you follow these 10 simple guidelines for small business accounting for your salon, your year end tasks will be less daunting, you will maximize possible tax deductions, and you will be better prepared to meet tax and other financial obligations.

Jennifer Groberg is a graduate from the University of Utah with a bachelors degree in Finance. She owns her own firm, BookSmarts Accounting, and is a certified QuickBooks Pro Advisor. Jenny’s expertise lies in small business accounting, bookkeeping, QuickBooks consulting, QuickBooks training & cleanup and financial advising.

For small business and salon accounting needs contact Jenny Groberg at(801) 979-9676 or email her at


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