Episode Title: Should You Own or Lease Your Cosmetology School Building? 3 Must-Haves Before Buying

Episode Number: 8

Host: Desarie Anderson, CPA

Episode Overview

Owning the building for your cosmetology school can be a game-changing investment, but is it the right move for you? In this episode of The Cosmetology School Accounting Podcast, host Desarie Anderson walks you through the critical factors you need to consider before making this major financial decision. Whether you’re currently leasing and thinking about buying in the future or you’re ready to take the plunge now, this episode will provide the roadmap to set yourself up for success.

Desarie reveals the three essential must-haves that every school owner needs before purchasing property:

✅ Good Business Records – Your school’s financial history plays a key role in securing a commercial loan and proving to lenders that you’re a responsible business owner.

✅ Money in the Bank – Cash flow isn’t just about making money; it’s about keeping enough reserves to cover down payments, unexpected costs, and financial stability during lean months.

✅ A Trustworthy Commercial Realtor – Finding the right building is about more than just location. A knowledgeable real estate professional can help you find a property that aligns with your business goals and budget.

If you’ve ever considered owning your building instead of leasing, this episode is packed with insights and strategies to help you make a smart, informed decision.

Why This Episode is a Must-Listen

• Understand the pros and cons of owning vs. leasing for your cosmetology school.
• Learn how good bookkeeping and financial records can make or break your ability to buy property.
• Discover why cash reserves are essential for securing a loan and covering hidden costs.
• Get insider tips on how to find the right commercial realtor who understands the needs of beauty schools.
• Walk away with a clear action plan to prepare your school for property ownership in the future.

Key Topics Covered in This Episode

1. Good Business Records: Why They Matter More Than You Think

• Your business records are like a report card—lenders want to see consistency, profitability, and financial responsibility.
• Work with an accountant who specializes in cosmetology schools to ensure your books are accurate and tax-compliant.
• Well-maintained records can help you spot financial trends in your business, such as enrollment patterns and seasonal expenses.
• Lenders will scrutinize your tax returns, profit & loss statements, and balance sheets—get them in order before applying for financing.

2. Money in the Bank: How Much Do You Really Need?

• It’s not just about how much you make, but how much you keep—saving is key to buying property.
• Establish a dedicated real estate readiness fund and contribute to it consistently.
• Cash reserves will help you cover down payments, closing costs, renovations, and unexpected repairs.
• Loan officers look for liquidity—a strong cash position improves your chances of getting favorable loan terms.
• Pro tip: Avoid financial surprises by planning fo

Introduction:

• Welcome and overview of today’s focus: optimizing cash flow management for cosmetology schools.
• Explanation of why effective cash flow management is essential for maintaining operations and funding growth, particularly given cyclical tuition collections.

Segment 1: Understanding the Importance of Cash Flow Management

• Definition of Cash Flow:
  • The movement of money in and out of your school, crucial for covering operational costs.
• The Challenge for Cosmetology Schools:
  • Income often comes in large sums at the start of a term, followed by lean periods.
  • Fixed outflows like payroll, utilities, and maintenance continue regardless of revenue fluctuations.
• Key Takeaway:
  • Effective cash flow management prepares your school for slow periods, avoiding the need for costly short-term borrowing.

Segment 2: Practical Techniques for Optimizing Cash Flow

• Develop a Detailed Cash Flow Forecast:
  • Use historical tuition collection patterns and vendor payment data to project monthly inflows and outflows for the next 12 months.
  • Regularly update the forecast to reflect actual financial activity.
• Implement Robust Accounting Software:
  • Leverage tools like QuickBooks to automate invoicing and expense tracking.
  • Use a dedicated student tuition management platform for detailed invoicing, then transfer key figures to your accounting system for high-level oversight.
• Streamline Tuition Billing and Collections:
  • Establish clear tuition policies, including due dates and payment methods.
  • Automate billing processes and integrate online payment systems to ensure prompt payments.
• Monitor and Control Expenses:
  • Regularly review expense accounts, identify cost-saving opportunities, and negotiate better terms with suppliers.
• Build and Maintain a Cash Reserve:
  • Set aside funds during high cash inflow periods to buffer against unexpected expenses or lean times.
• Accelerate Receivables:
  • Encourage early tuition payments with small discounts and use electronic invoicing to speed up collections.
• Regular Financial Reviews:
  • Conduct monthly reviews using financial statements (cash flow statements, profit and loss reports, balance sheets) to monitor cash movement and make timely adjustments.

Segment 3: Real-World Application and Examples

• Example Scenario:
  • A cosmetology school receives most tuition fees upfront but faces a cash gap mid-term due to fixed monthly expenses.
• Implemented Solutions:
  • Creation of a cash reserve during tuition collection.
  • Negotiation with vendors for more flexible payment terms.
  • Adoption of an automated invoicing system for additional revenue streams.
  • Offering discounts to accelerate tuition receivables.

Segment 4: Actionable Steps and Conclusion

• Recap of Key Actions:
  • Develop and maintain a cash flow forecast.
  • Invest in robust accounting software and streamline tuition billing.
  • Monitor and control expenses diligently.
  • Build a cash reserve and accelerate receivables.
  • R

Key Topics Covered:

1. Why Audit Reports Are Critical

   • Ensuring financial responsibility and compliance
   • Maintaining accreditation status and Title IV eligibility

2. Filing Your Tax Return After the Audit

   • How audited financials improve accuracy
   • Benefits of avoiding amended returns
   • Consistent data for lenders, regulators, and stakeholders

3. Filing an Extension

   • How and when to file an IRS extension
   • Why you still need to pay estimated taxes on time
   • The advantage of aligning audited numbers with your tax return

4. DOE Deadlines for December 31 Year-End

   • Typical June 30 submission requirement for the audit report
   • Potential penalties for late submissions
   • Importance of scheduling your audit early to meet deadlines

5. Practical Tips for Timely Compliance

   • Coordinating with auditors and accountants
   • Managing both tax and DOE deadlines efficiently
   • Maintaining good recordkeeping throughout the year

Why This Episode Matters

• Accredited cosmetology schools face unique regulatory obligations.
• Proper timing reduces risk of financial penalties, amendments, and noncompliance.
• Good planning and communication streamline the audit and tax filing processes.

Action Items

• Start your audit process early—right after your fiscal year ends.
• Communicate with your accountant to align tax estimates with potential audit findings.
• File an extension if your audit report isn’t ready by the tax filing deadline, but remember to pay any taxes owed on time.
• Submit your audit report to the DOE by June 30 if your fiscal year ends on December 31.

Resources Mentioned

• IRS Extension Guidelines (check the IRS website for current deadlines)
• Department of Education (Title IV audit submission requirements)
• Professional accounting or legal counsel for personalized advice

Connect with Us

• Subscribe to the Cosmetology Insights Podcast on your favorite platform.
• Share this episode with colleagues who need help navigating audit and tax deadlines.
• Follow us on social media for more tips on running a successful accredited cosmetology school.

Thank you for tuning in, and be sure to join us for our next episode, where we continue exploring essential business and regulatory topics for beauty education professionals. If you found this helpful, please leave a review and spread the word to your network. Together, we’ll stay informed and compliant in the ever-evolving world of cosmetology education.

Email: desarie@andersonaccounting3.com

Phone: (404)300-3175

What You'll Learn in This Episode:

1. Why Tax Preparation Matters

• The importance of accurate record-keeping for tuition, salaries, and federal funding.
• How staying tax-ready ensures compliance with accreditation and audit requirements.
• Viewing tax season as a financial health check for your business.

2. Key Considerations Before Filing

• Organizing Financial Records: Tips for reviewing profit and loss statements and avoiding commingling personal and business expenses.
• Identifying Eligible Deductions: Common deductions like educational supplies, facility costs, and professional development expenses.
• Payroll and Contractor Payments: Ensuring compliance with issuing W2s and 1099-NECs.
• Depreciation and Assets: Handling fixed assets like equipment and facilities using Section 179 expensing or traditional depreciation.
• Deferred Revenue: Understanding its importance for tuition payments and financial statement accuracy.

3. Common Tax Season Pitfalls

• Misclassification of employees vs. contractors.
• Missing critical deadlines for filings and payments.
• Overlooking state-specific requirements like sales tax on student kits or tuition refunds.
• Ignoring tax planning opportunities for the upcoming year.

4. Pro Tips and Resources

• Leverage professional help from industry-specific CPAs.
• Stay audit-ready with proper documentation for both IRS and accreditation audits.
• Plan for future tax changes, including the 2025 tax law sunset.
• Resources like the IRS Small Business and Self-Employed Tax Center for additional guidance.

Key Takeaways:

• Preparation is key: Staying organized throughout the year is the secret to stress-free tax seasons.
• Leverage expertise: Collaborate with CPAs and tax professionals who understand the unique needs of cosmetology schools.
• Think ahead: Use tax season as an opportunity to evaluate your school’s financial health and plan for growth.

Resources Mentioned in This Episode:

• IRS Small Business and Self-Employed Tax Center
• Reach out to Desarie Anderson, CPA, for tailored guidance specific to your school's financial and tax needs.

Connect with Desarie Anderson:

• Website: https://andersonaccounting3.com/
• Email: desarie@andersonaccounting3.com
• https://www.facebook.com/profitandbeauty https://www.instagram.com/profitandbeauty/ https://www.youtube.com/@profitbeauty6974

Don’t forget to subscribe, share, and leave a review!

Help other cosmetology school owners by sharing this episode and spreading the word. Together, we can make tax season manageable and stress-free! 🎉

Episode Title: Budgeting Basics for Cosmetology Schools

Episode Highlights:

1. Why Budgeting Matters

   • Discover how a strong budget serves as a financial roadmap for your school’s success.
   • Understand the risks of not having a clear budget in place.

2. Step 1: Understand Your Income Sources

   • Learn to track income streams like tuition, retail sales, and clinic revenue.
   • Tips for projecting income conservatively and planning for seasonal fluctuations.

3. Step 2: Categorize Expenses

   • Differentiate between fixed and variable costs to prioritize your spending.
   • Pro tip: Build an emergency fund to cover unexpected expenses.

4. Step 3: Strategic Growth Planning

   • How to evaluate the return on investment for new expenses like upgraded student kits or marketing campaigns.
   • Avoid overspending by aligning growth with measurable outcomes.

5. Step 4: Track and Adjust

   • Treat your budget as a living document that evolves with your school’s needs.
   • Monthly tracking tips and tools like QuickBooks and Excel for efficient budget management.

6. Common Budgeting Pitfalls

   • Avoid underestimating small expenses, neglecting maintenance costs, and overestimating income.

7. Practical Tools for Budgeting

   • Recommendations for spreadsheets, accounting software, and visual reporting dashboards.

Key Takeaways:

• Always project income conservatively and categorize expenses accurately.
• Plan growth strategically with a clear return on investment.
• Track and adjust your budget monthly for maximum financial control.

Resources Mentioned:

• QuickBooks (Plus or Advanced versions for budgeting features)
• Excel for custom budgeting spreadsheets
• Reporting dashboards for visual insights

Actionable Tips:

• Set aside time monthly to review and adjust your budget.
• Build an emergency fund covering at least three months of expenses.
• Review quarterly expenses to identify unnecessary costs.

Connect with Desarie Anderson:

• Website: andersonaccounting3.com
• Instagram: @profitandbeauty
• YouTube: 

If you enjoyed this episode, don’t forget to subscribe and leave a review to help other cosmetology school owners discover actionable financial tips. Tune in next week for more insights to streamline your school’s financial management!

Overview

In this episode of the Cosmetology School Accounting Podcast, host Desarie Anderson dives into strategies that will help your cosmetology school shine in a competitive market. Learn why hosting local events and collaborating with high schools can significantly boost your school’s reputation. Discover how to streamline financial processes and maintain compliance to ensure your institution runs smoothly and effectively.

Key Topics Covered

1. Local Events & Community Engagement

   • Student Showcases: Host open houses and events that highlight student creativity and skill.
   • Joint Ventures: Partner with local salons, beauty supply stores, or makeup brands to attract a wider audience.
   • Community Workshops: Offer short classes and hands-on demos to establish your school as a go-to resource.

2. High School Outreach

   • Career Presentations: Attend high school fairs or speak in classrooms to introduce the field of cosmetology.
   • Scholarship & Shadow Programs: Provide scholarships and opportunities for potential students to experience a day in your school.
   • Building Trust: Strengthen community relationships while shaping your prospective student pipeline.

3. Streamlining Financial Processes & Compliance

   • Accounting Best Practices: Implement clear bookkeeping and budgeting systems to manage cash flow effectively.
   • Regulatory Compliance: Stay updated on industry regulations, licenses, and requirements to keep your school in good standing.
   • Efficient Technology: Explore software solutions for automated invoicing, student billing, and tracking educational expenses.

4. Maintaining a Solid Reputation

   • High-Quality Education: Continuously refine your curriculum to align with current beauty industry trends.
   • Highlight Student Success: Showcase alumni achievements to demonstrate the value of your program.
   • Monitor Online Presence: Respond promptly and professionally to reviews to maintain a positive image.

Action Steps

• Plan a Team Meeting: Gather your staff for a New Year’s strategy session, focusing on local outreach, high school partnerships, and financial compliance improvements.
• Schedule Community Events: Start reaching out to local venues and businesses for collaborative events and workshops.
• Review Financial Systems: Evaluate your current processes, software, and compliance measures to ensure efficiency and adherence to regulations.
• Track Progress: Set measurable goals and monitor results to continuously refine your approach.

Quote of the Episode

“By implementing these strategies, you’ll be on your way to a thriving cosmetology school that attracts high-quality students, maintains a solid reputation, and stands out in a competitive market.”
— Desarie Anderson

Connect & Support

• Subscribe & Review: Don’t miss out on future episodes of the Cosmetology School Accounting Podcast—subscribe on your favorite platform, and please leave a review.
• Share: If you know ot

In This Episode, You’ll Learn:

1. What is a 1099?
   - Explore the purpose of the 1099 form and why it’s essential for non-employee compensation.
   - Learn how the 1099-NEC (Non-Employee Compensation) replaced the older 1099-MISC for services.

2. Who Gets a 1099?
   - Discover which independent contractors and unincorporated vendors qualify.
   - Understand exceptions for corporations, law firms, and rental payments.

3. When to Provide a 1099
   - Get clarity on the January 31st deadline for sending 1099s to vendors and filing with the IRS.
   - Learn the importance of collecting W-9 forms upfront to avoid hassles.

4. Why Provide a 1099?
   - See how timely 1099 filings keep you compliant and maintain transparency with the IRS.
   - Understand how it helps vendors accurately report income and prevents disputes.

5. Consequences of Not Filing
   - Find out how late or missing 1099s can result in fines ranging from $50 to $280 per form.
   - See how audit risks and reputational damage can impact your school.

6. Best Practices for Managing 1099s
   - Use accounting software (QuickBooks, Xero) for automated tracking.
   - Stay organized with regular vendor payment reviews and proper record-keeping.
   - Partner with a CPA for guidance if you’re unsure about compliance.

7. Common Misconceptions
   - Clarify myths like: “I only paid them once,” or “They’re responsible for their own taxes.”
   - Understand how payments via PayPal or credit cards fall under 1099-K rules, not 1099-NEC.

8. Real-Life Scenarios
   - Guest instructors, IT consultants, and unincorporated landlords—all need correct 1099 treatment.
   - Learn from practical examples to ensure every eligible payment is properly reported.

9. Pro Tips for a Smooth Tax Season
   - Plan ahead, verify information early, and educate your staff on 1099 obligations.
   - Leverage technology to reduce errors and time spent manually preparing forms.

Host: Desarie Anderson, CPA

Episode Description: In this inaugural episode of "Cosmetology School Accounting," host Desarie Anderson introduces herself and outlines the podcast's mission to provide concise, actionable financial advice tailored for cosmetology school owners. Drawing from her extensive experience as a salon owner and Certified Public Accountant, Desarie aims to demystify financial concepts, empowering beauty education professionals to achieve financial clarity and success.

Key Topics Covered:

• Host Introduction: Desarie shares her journey from salon ownership to becoming a CPA, highlighting her dedication to assisting beauty industry professionals with financial management.

• Podcast Format: Explanation of the "nanocast" approach—brief, focused episodes ranging from 5 to 10 minutes, designed to fit seamlessly into the busy schedules of cosmetology school owners.

• Upcoming Topics: A preview of future episodes covering budgeting basics, tracking tuition payments, managing expenses, preparing for audits, and more.

Call to Action:

• Subscribe: Ensure you don't miss upcoming episodes by subscribing to the podcast.

• Engage: Share your questions and feedback to help shape future content. Connect with Desarie through the links provided in the show notes.

Closing Thoughts:

Desarie emphasizes the critical role cosmetology schools play in the beauty industry and expresses her commitment to supporting their financial well-being. She encourages listeners to focus on their passion for educating future beauty professionals, while she provides guidance on the financial aspects of their operations.

Outro:

Thank you for tuning in to "Cosmetology School Accounting." We hope today's insights help you navigate your financial journey with confidence. If you found value in this episode, please share it with your colleagues and leave us a review.

For more resources and updates, follow us on Facebook, YouTube, and Instagram @ProfitAndBeauty, and visit our website at andersonaccounting3.com. You can find the links in the show notes.

Stay tuned for our next episode, where we'll explore more topics tailored to the accounting needs of cosmetology schools.

Until then, keep thriving in your financial endeavors!

Connect with Us:

• Facebook: Profit and Beauty
• YouTube: Profit and Beauty
• Instagram: @profitandbeauty
• Website: Anderson Accounting