Just Opened Your First Salon...Now What?
It is the moment in your career you have been waiting for. From the brand-new twinkling lights to the fresh leather chairs placed in front mirrors. It’s the moment that you realize your dream has become a reality: you are now the proud new owner of your very own salon.
When thinking about what I wanted to write to new salon owners I knew that all I wanted to do was help from you making the same mistakes I have in the past. Most importantly I wanted to make you aware of what will happen and what to expect next in salon ownership.
First of all, I want to congratulate you on taking this huge risk and taking a chance on building your salon in the way you feel the industry should be represented. While a great accomplishment, it can be overwhelming when first starting out. You have all these questions like who to hire, when to hire, do we have money to hire? This is the moment where a very strong business plan helps. Don’t worry if you don’t have it dialed in - FYI most salons don’t.
Set aside one day a week to just focus on your operating systems: from education for stylists and managing your staff, to ordering and answering phones. This will save you a lot of time in the future before it becomes too late to implement newer processes. Most salons experience rapid growth in the first three years until the hype has worn out. This is the point that staff turnover happens, and you have to start your process all over again. Hire slow, fire quick and make your system transparent so others can help you grow the company. For example: When we train new stylists, we provide them with our training manual. It includes our company values and missions along with the bigger picture so they can help promote our brand because they feel more aligned with what our objectives are.
You have to trust your gut but also keep a close eye on finances. Most of us have a bookkeeper, an accountant or a family member doing our books as we were never inspired to read spreadsheets and create break-even analysis charts. I promise you, in year five you will be driven by these metrics so get familiar with them sooner than later. When it comes to taxes you cannot spend them: YOU HAVE TO SAVE THEM. This is the quickest way to spend years of your life working for free and hating every minute of it. Trust me, for the first few years of my company I went a little overboard and it took me four more years to get back on track (thank god). You are going to want to give your staff everything, and as much as they deserve it you are hindering your profits in the long run. Get creative - don't just give increases. You cannot afford to pay over 50% commission. I know some come with clientele, but your overhead will squeeze out the last 50% and in most cases, you may just break even on them. Knowing what your cost of goods sold and true expenses are absolutely necessary for success.
This is why is why I made SalonScale: to separate parts from labour. I still wanted my staff to make the same commission but needed to make sure all color was not coming out of my 50% portion of the color session; because, in most cases color was up to 26% of the bill and with overhead being 35% I was going in debt on most of these big color services. Once we knew how much the color charge was, we actually charged the CUSTOMER. At the end of the day, my stylists' commission was not affected but I still covered the cost of the color coming out of my back bar. We had a 30% increase in revenue shifting our charging to this method.
Enjoy every damn minute this will be some of the best years of your life. You’re going to screw up and make some mistakes. Some of your staff that you thought would never leave you will - and they will copy you and try to take your staff. And yes, things will get hard but at the same time, you will grow so much as a person. Your family will be proud and your friends may get distant but just remember you are taking a risk to better so many people! So never dull your light - remember why you started from the first place and do not EVER give up!
When you feel alone and need help I encourage you to reach out to other owners: I promise they are exactly like you. You will be shocked by how helpful and caring all salon owners are. After all, they chose to do the same thing as you and they probably have a ton of life hacks to get through the tuff times.
You Got this!