Running a wellness business comes with unique financial challenges. From seasonal shifts in client demand to managing variable income, it can be tough to keep finances steady. Financial health is essential for growth, stability, and peace of mind. This guide covers six actionable steps to keep your wellness business financially healthy, helping you plan, save, and thrive no matter what the future holds.
How Do You Keep Your Wellness Business Financially Healthy
Keep your wellness business financially healthy by creating a budget, managing cash flow, and separating personal and business finances. Reduce expenses, track records carefully, and build an emergency fund. These steps will stabilize income, control costs, and prepare your business for slower months or unexpected expenses.
Now, let’s look at how to put these tips to keep your wellness business financially healthy into action.
1. Create A Budget
Maintaining a budget is essential to keep your wellness business financially healthy. A budget helps you track income, expenses, and plan for growth. Wellness businesses often face variable income, so reviewing past months to find average earnings (and noting high and low periods) can help you prepare for slower times. Clinic management software for wellness businesses can simplify this process by allowing you to review past sales and calculate an accurate average for budgeting.
Start by listing every fixed and variable expense—such as rent, utilities, marketing, and supplies. Some costs, like advertising or wellness products, may change with demand, while others, such as big purchases or certifications, may be one-off investments to plan for in advance.
Having a clear picture of cash flow allows you to manage spending and save for slower periods. Regularly reviewing your budget, whether monthly or quarterly, lets you make adjustments as your business grows and evolves.
2. Cash Flow Management
Managing cash flow is essential to staying within your budget. Knowing your numbers is just the start; you need funds readily available, especially during slower months. Set aside savings when sales exceed targets, ensure your service pricing is both affordable and profitable, and establish sustainable pay rates or commission tiers for employees. Negotiating terms with vendors can also help balance wellness business finances.
Wellness business finances often fluctuate, so stay on top of current financials to prepare for a successful future. Automated savings, investments, and bill pay can ease cash flow management, but it’s still up to you to monitor where funds are coming from—and where they’re going.
3. Separate Personal & Business Finances
Many wellness business owners start as solo practitioners. Without a large team to manage, it might seem unnecessary to separate personal and business accounts, but it’s crucial. Whether you’re running a clinic or working solo from home, your business is its own entity, and needs its own bank account.
Separating business finances simplifies bookkeeping, provides a clear picture of your business’s financial health, and can make tax filing easier. Once your business bank account is set up, connect it with your credit card processor and link it to your billing and invoicing software to automate much of your bookkeeping.
4. Reduce Expenses
To make your wellness business more profitable, you have two main options: increase sales or reduce expenses. Sales growth often happens gradually, but small businesses can take immediate steps to control costs.
Start by reviewing your budget closely. Identify essential expenses versus those you could reduce or eliminate. Pay special attention to non-fixed costs like utilities, marketing, or supplies—these are areas where small businesses often have flexibility. By assessing where you’re overspending, you can create a targeted plan to cut costs and increase profitability.
5. Keep Records
The financial health of your wellness business relies on keeping detailed records. Every dollar earned, saved, and paid should be accounted for. If that sounds overwhelming, it doesn’t have to be. Bookkeeping software like Vyde can handle the work for you, simplifying tax time and ensuring you have confidence in your numbers month to month.
Using financial reporting for your wellness business is also essential, especially when integrated with your booking software. This combination ensures that every sale is automatically accounted for, with no manual entry. Record-keeping doesn’t have to be time-consuming—with the right software, you can automate most of it and keep wellness business finances organized effortlessly.
6. Emergency Fund
Ebbs and flows in demand for your services and products are normal, influenced by seasonality, economic shifts, and global events. Some months will bring in more revenue than others, making it essential to have a financial cushion so you don’t go into the red during a slow period—this is something you can plan and save for.
Sales fluctuations aren’t the only potential setbacks; unexpected expenses are part of business ownership. Equipment breaks, contract terms change, and unforeseen events happen.
An emergency fund is a savings account set aside specifically for unexpected costs. A good rule of thumb is to save 3-6 months of operating expenses to manage your finances securely. If you’re not there yet, review your budget and set aside a portion monthly to build up this fund. Prioritize this over upgrades or new certifications—it’s key to your business’s financial security and long-term health.
Whether you’re just starting as a sole practitioner or running an established wellness business, effective bookkeeping is the cornerstone of financial health. If you haven’t yet invested in software, consider a free trial of clinic management software designed specifically for wellness businesses.
Pairing your business management system with a payment integration and savvy bookkeeping will help you keep your wellness business financially healthy for years to come.
