How We Use Profit First Every Tuesday to Manage Cash Flow in Our Salon

When I opened Urban Betty, I thought that if we were busy, we were successful.

Spoiler alert: we were busy… and broke.

It took me eight years to realize that revenue doesn’t matter if you don’t have a system for managing your money. No one taught me how to read a P&L, allocate cash, or actually make a profit. I just kept working harder and hoping it would eventually work out.

Now, we use the Profit First system every single week inside our salon, and it has completely changed how we manage cash flow, payroll, and profitability across multiple locations.

This is exactly how we do it.


What Is Profit First and Why It Works for Salons

Profit First is a cash flow management system that allocates money to different accounts first, rather than spending and hoping there’s profit left over.

In a salon business, this matters even more because:

  • Payroll is one of your biggest expenses
  • Costs fluctuate week to week
  • High revenue does not always mean high profit

This system forces your business to operate within clear financial boundaries.


Step 1: Log in to the Bank Every Tuesday

Every Tuesday, we log into our bank accounts.

Not randomly. Not at the end of the month. Every Tuesday.

Consistency is what makes this system work. You cannot manage cash flow if you are only looking at your numbers once a month.


Step 2: Separate Income by Location or Business Unit

Each salon location has its own:

  • Income account
  • Operating expenses (OPEX) account

We do not combine locations. This allows us to clearly see how each one is performing and make better decisions.

We start by reviewing the total in each income account, leave a small buffer, and allocate the rest.


Step 3: Allocate Percentages Using the Profit First Method

Instead of spending first, we allocate first.

While every business is different, here are general target ranges we work within as a salon:

  • Payroll and payroll taxes: ~55% to 65%
  • Operating expenses (OPEX): ~10% to 20%
  • Rent and utilities: ~3% to 8%
  • Marketing: ~1% to 3%
  • Education: ~1% to 2%
  • Benefits and insurance: ~2% to 4%
  • Taxes: ~2% to 5%
  • Profit: Target 10%

These are not one-size-fits-all numbers.

Your percentages should reflect:

  • Your pricing
  • Your team structure
  • Your stage of growth
  • Your specific business model

The goal is not to copy someone else’s numbers. The goal is to create awareness and move toward healthier targets over time.


Step 4: Transfer the Money Immediately

Once we calculate the allocations, we move the money right away.

We transfer funds into:

  • Profit account
  • Tax account
  • OPEX account
  • Any additional operating accounts we use

If the money is not sitting in that account, it is not available to spend. This creates discipline and prevents overspending.


Step 5: Track Every Transfer Weekly

We use a simple spreadsheet and check off each transfer as it happens.

This turns Profit First into a repeatable system instead of something that only happens “when we remember.”


Step 6: Handle Payroll Taxes Every Two Weeks

After payroll runs, we set aside money for taxes.

We transfer a portion to a tax-holding account and then move the funds to a tax payment account. This keeps us from scrambling when tax payments are due.


Step 7: Take Profit Distributions Every Quarter

At the beginning of each quarter, we take a distribution from the profit account.

We move a portion out and leave the rest in the business.

This step is what reinforces that your business is actually working for you.


What This System Actually Does

This is not just about being organized.

It forces you to see the truth about your business.

If payroll is too high, you see it.
If profit is too low, you feel it.
If something is not working, it becomes obvious quickly.


The Reality: Your Numbers Will Evolve

Your percentages will not be perfect right away.

Ours weren’t either.

You may start with lower profit and higher expenses, and that is okay. The goal is to build awareness and gradually move toward healthier numbers, including a 10% profit target.


How to Start Using Profit First in Your Salon

If you are just getting started, keep it simple:

  • One income account
  • One profit account
  • One tax account
  • One operating account

Pick your percentages, move the money weekly, and stay consistent.


Final Thoughts on Salon Cash Flow

Most salon owners think they have a revenue problem.

In reality, they have a cash flow system problem.

Once you understand where your money is going and start allocating it intentionally, everything changes.

Profit First gave us that clarity, and it continues to shape how we run our salons today.