Intro: Do you feel like you were meant to have a kick-ass career as a hair stylist? Like you got into this industry to make big things happen?
Maybe you’re struggling to build a solid base and want some stability. Maybe you know social media is important, but it feels like a waste of time because you aren’t seeing any results. Maybe you’ve already had some amazing success but are craving more. Maybe you’re ready to truly enjoy the freedom and flexibility this industry has to offer.
Cutting and coloring skills will only get you so far, but to build a lifelong career as a wealthy stylist, it takes business skills and a serious marketing strategy. When you’re ready to quit just working in your business and start working on it, join us here where we share real success stories from real stylists.
I’m Britt Seva, social media and marketing strategist just for hair stylists, and this is the Thriving Stylist Podcast.
Britt Seva: What is up and welcome back to the Thriving Stylist Podcast. I’m your host, Britt Seva, and this week is another podcast by request. I got a really great DM coming in saying, “Britt, I’m a salon owner. I’m feeling like we’ve capped out our revenue coming into the salon. And I’m personally not capped out on the income I’d like to make. What are my options, other than taking more services myself, seeing more clients, raising my own prices because that’s very incremental, right?”
When you look at any given business that is being run by a solo service provider in the service industry, we are limited by our physical capability, right? You are one person doing clients, one to one for the most part, and there’s only so much volume you can do, and so it creates a limit. So we get to this point where it’s like, “Okay, well, I can raise my prices,” but you can run the math on that. It ends up being fairly incremental when you do a price increase because you still aren’t shifting the volume of what you’re serving.
For the most part, incremental increases are great. I’m not shaking a stick at it, but when we’re looking at—okay, if you’re a business owner and we know that healthy businesses are increasing revenue by minimum 15% a year and ideally more like 40% a year, often, there’s a disparity. It’s like, well, our income increased by 7%. That is survivable, but it’s not considered healthy by most economists’ standpoints.
When we’re saying, “I’m a salon owner and I’m feeling really capped. Do I have options?”, I say, yes. So what I’m going to do is rattle off a ton of different ways that a salon owner could increase revenue. Please don’t try to do all these things. You’ll create a mess, and then you’ll message me and say, “Why do I hate my salon company? Why has it become so overwhelming?” And I’m going to say, “Oh my gosh, because you tried to do eight new things in a year. I don’t know why you did that.” Don’t do all these things.
What I want to do is brainstorm with you. Imagine that we’re sitting here over a cup of coffee and you’re like, “Okay, what can I do?” And I sit down and I take out a notebook and I’m like, “Let’s just brainstorm.” That’s what we’re doing here.
I’m going to throw a ton of ideas at you. Some of them, as I’m talking, you’re going to shake your head and be like, “Nope, that would never work for me.” Just stay open-minded with me. Just do the dance for a minute and think about it over the next week or so, and then come back and maybe listen to this podcast again and just think open-minded, like, “Huh, if I wasn’t attached to the current vision of my business, if I wasn’t limited by my own experiences in the salon, if my current viewpoint and my current situation wasn’t the only reality that could possibly exist for me as a salon owner, what could be possible? Just be open-minded with me on this one.
The first thing that you can do if you need to increase your revenue, and this would be for those of you who have employee-based salons, would be to review your payroll. When I say this, I don’t need all the stylists of the world to come at me and say, “Hey, what are you talking about?” Because I’m very much of the mindset that your stylists need to be incredibly well paid. Great, great employees should be paid well. Employees who are not great shouldn’t be a part of your salon company. They should be fired. So there isn’t anybody who shouldn’t be paid well. Everybody should be well compensated.
In Thriving Leadership. I share an innovative compensation structure that I’ve never seen anybody in the industry talk about, and it’s called profit of profit. The way that it works is the stylist always keeps the lion’s share, no matter how you slice it.
There’s three different models. There’s a 20% PFP, 25% PFP, or 30% PFP. What that means is the stylist is either keeping 80, 75 or 70% of the profit produced from the services that they provide, okay? So never less than 70%.
Now, for those of you who are like, “Wait a minute, I’m only making a 40% commission,” I’m not talking about commission structure. I’m talking about profit of profit and the reason why I set up my comp structure that way is because so many salon owners are in the blind. They’re running the salons in the red because they’re not factoring in the cost of running their business. So when they come to their stylist and they’re like, “I’m sorry, I can only offer you a 40% commission,” rhen the stylist starts to tell the story of “You’re keeping 60% of my money” when the reality is the salon owner might be making $0 because there is no profit because of the way their business is being run and managed.
When I say, “review your payroll”, what I mean is, are you creating a profit margin? How did you decide your compensation structure? Did Janet just say he’s not going to work for you for less than 60%? So you’re like, “Okay, Janet, here you go.” Or were you like, “Honestly, you know the value of your time is $25 an hour.”
How was that determined? Did you make smart decisions when you created your comp structure or did you just wing it because for many salon owners with employee-based salons, you’re losing your margin completely in your payroll and may be sorry for that at the end. Maybe you are paying too much for your lease, right? I mean, it’s totally possible. There’s all these other things that could be too.
But often when we go into the payroll, we can find little things that were not done correctly. So I invite you if you’re like, “Something’s not right with the profit,’ which comes to the revenue, look at your payroll and just see do you know what you’re doing? Or is that something that needs a little love?
Okay. That’s number one.
Number two, hire more stylists is always a way to create more revenue whether you have employees, whether you have booth renters. More booth renters means more rents being paid. And then if you have more employees, it’s more producers.
I was on a coaching call actually before I recorded this podcast. It was really poignant and really fascinating, actually. I was talking to somebody about the future of the industry and talking about the reality that Gen Zs don’t want to work like millennials and Gen X is dead. And I know as I say that, ‘m a millennial too and we roll our eyes, ‘cause it’s so irritating. Too bad, too bad. You don’t have to like it. You have to accept it because it’s the reality.
I do think the future of salons, not right now, I said the F-word, the future of salons will mean having more staff who work flex hours. I really do. I think that’s what it’s going to look like. I think we’ve finally realized in this industry, “Oh my gosh, I don’t have to work 12 hours a day. I don’t have to work five days a week. I can actually have the life balance I thought was possible when I joined the industry.”
And because a lot of the new generation and even those of us who are millennials and Gen Xers, coming out of the pandemic are like, “Mm, I think I want to live a higher quality life,” and so our working needs and our desired schedule has changed.
That doesn’t mean you can have open chairs in your salon. That is a stupid business model. You should still have all your chairs filled. “Here’s the deal, Sarafina. If you only want to work three days a week, that’s cool, but I’m going to rent out your chair the other four. You can’t be queen of this chair. Nathaniel is going to come in and he’s going to be here two days a week. Then Brooke is going to come in and she’s going to take the other two days and you’ll keep your stuff at a locker in the back.” So Sarafina, you can have your custom three day schedule and Nathaniel’s going to have his two, Brooke’s going to have her two. No one’s going to own this station. I do think that’s the future of the industry.
Now I know, as I say right now, people are getting really uncomfortable. They’re squirming in their car seats because they’re like, “I don’t know if I like that. I don’t want to share my station.
This is my stuff.” You can’t have your cake and eat it too. If you don’t want to work full time, I respect that. I don’t either. I hear you, but there has to be an exchange because your owner still has to make money.
So what is your solution? Are you going to pay seven days’ rent? If you’re going to pay seven days’ rent, honey, you can own the chair. I won’t put anybody there, but I need seven days’ worth of rent from you.
This is the thing too. Those of you who have booth rental salons and you’ve charged a weekly rental rate, you’ve hosed yourself unless that weekly rental rate is for seven days’ rent. If you’re like, “Well, we’re only open for five,” I would change your rental agreements at the expiration, which please tell me your rental agreements expire after six months or a year. Please tell me they do. They’re not endless.
So with the next expiration, you change it to be “This is valid for five days,” “Valid for four days,” “Valid for three days,” whatever. I coach to the 2, 3, 4 mode. Nobody ever works more than four, but you do what you do, but there is no you “own” this chair. You got to work backwards out of that because coming up in a couple years, that model’s going to really struggle.
With that, I layered on double shifting. Double shifting is something that has historically made this industry very uncomfortable, but it’s ironic because most other service industries do double shift. Anybody ever worked in a restaurant? I did. I worked PMs when I first got started and I switched to AMs as soon as I could ‘cause I already had a young child at home and I wanted to be there with her in the evening for bedtime and all the stuff. But PMs was where you made more tips and money, right? But AMs worked better for my life.
I’ve done both. In most service industries, that’s what it looks like. There’s mornings, there’s noons, there’s nights, sometimes there’s overnights. That is normal in an executive office. Yeah. Everybody just works the same. Maybe the office is open from eight to eight and you’re either coming in for a little while in the morning or at night or whatever.
But even if you go to a store at the mall, people are coming in at all different times, right? Someone starts at 10, someone starts at four. Double shifting is normal in most smart businesses.
And so when we think about the future of the industry, maybe doesn’t want to work 40 hours a week, which more power to you. I don’t either. Do we do maximum six hour shifts, but the salon is open eight hours a day? How many of you with young families are like, “Hmm, I could do an eight to two shift, be home to pick up the kids after school, cook dinner and stuff like that?” How many of you—like my daughter? My daughter would take the two to eight PM, thank you. She would love to have that. She wants to sleep in. By 8:00 PM, she still went out to dinner with her boyfriend. She’s happy.
Then it allows your more senior people to work the shifts they want to and it allows your newer people to take the prime shifts that they need to build on, right?
Start thinking a little creatively. I’m just trying to open your mind. Like I said, nobody has to do any of these things today or tomorrow, but when we’re saying, “How do I hire more stylists? How do I create more capacity?” I think you can do it in a way that is win-win for everybody. So just something to think about.
Next, increase the number of days the salon is open. If we were to hire independent business valuators—not evaluators, it starts with a letter V. There are professionals who actually come in and will value a business.
So your business, my business have a value. Our emotional value that we put into our business is like two or three times more than it would ever be ever be actually valued at because we layer in things like, “Oh, I’ve got a great team.” “I’ve got this book of clients.” Yeah, a valuator is not going to see that as actual value. They see it really differently, but a valuator would come in and be like, “Time out. You have six chairs here that clients could be seen at, but for two days a week, they sit empty.” A valuator is going to deeply devalue your business based on that. They’re going to be like, “Oh my goodness, you could have 12 producers essentially,” right? Six and six. Six on Sunday, six on Monday, doing a full day of clients, and instead you have lights off and no one’s here. You’re missing out.
The other thing is too, we did a really fun exercise when I was the salon director. I had my front desk team, which shout out to the front desk squad, man. I had a powerhouse team. We asked them over a period of six weeks. I said, “Every time a client calls in, I want you to make note of what day and time they request to come in.” It was simple. It was like morning, midday, evening, and then all the seven days of the week, and then they were just doing tally marks. It wasn’t highly specific. It was like morning, mid, nights, and then all the seven days of the week on a chart. And they would do a little tally of when people called in.
What do you think was the most requested day? Saturdays, Thursday evenings—for us—and Mondays. Mondays, Saturday, Thursday nights. And any time on a Monday. Do you know why? Because 90% of our industry is closed on a Monday, but me, somebody who worked in the service industry, I never had weekends off. When I was working in the restaurant, never. I always had to work those days. I was always off Mondays and Tuesdays, so if I could get in somewhere on a Monday, that was huge for me.
And I’m not the only one who has a schedule like that, right? A lot of estheticians are off Sundays and Mondays, like so many businesses work a similar schedule to us that if you open up on those days where clients can’t get in other places, it’s a landslide victory. Something to think about.
Next, we have get stylists producing at a higher level. Iit was funny, from time to time I do on my Instagram one of those—I’m not going to lie, it’s a new app that came out where people can submit anonymous questions to you on the ‘gram. Okay, so a couple times I’ve put it in and it is interesting. I do get really deep questions in there. It’s fascinating. And couple times people would come in with questions and they’d be like,”My salon owner’s really holding me back. I’m not making the money that I want to,” or salon owners will come in and be like, “My stylists are just completely under producing. I’m super frustrated,” and I’ll always turn around and ask poignant questions.
To the stylist, who’s like, “My salon owner’s not paying me enough,” the questions I always ask are, “Are your books full? How many referral requests are you receiving a month?” Right? “When’s the last time you had a price increase? How does your social media look? What are you doing to market yourself?” And it’s always crickets “cause they’re like, “Well damn it. She got me.”
Same to the salon owner who’s like, “My stylists are all lazy. I wish they would do more to market themselves,” and then I look at that salon’s Instagram, if they’re not anonymous, and it’s like, “Oh my gosh, you haven’t posted in four months. So you don’t want to do the marketing. But then you’re pissed that your stylist won’t do it either. You’re not a leader, you’re an owner. I can’t help you there.”
And so when I say get stylists producing at a higher level, if you’re not doing it, you can’t expect anybody else to do it.
How many of you as parents or as kids were told by your parents, “Listen in the morning, when you get up to go to school, you make your bed.” In my house, that was a requirement, there’s a lot of strict rules. That was one of them. And my mother also always made her bed every day. Now, if she was like, “Well, I’m not going to make my bed, but you better make yours,” I would have a lot of resentment about it, but she was just trying to create good habits for me, right? She was trying to teach me to be tidy. I had chores every day, like normal things. My children have chores every day that they have to do and they don’t get paid for. It’s just part of living in our house. But that was modeled to me. I also do chores in my house every day. It’s modeled. If me and my husband didn’t do anything around the house and expected our kids to maintain it, how resentful would they be? They’d be pissed and they’d probably be talking “s” about us to all their friends. They’d be like, “Our parents are lazy.”
What do you think your stylists think if you are not showing up on social, if you are not learning marketing, if you’re not learning innovative compensation structures, if your website is dated, if you don’t know what culture means, if you’ve not taken an education curriculum intensive in three years? What do you think your stylists are saying about you? They’re saying you’re lazy. They’re saying you’re out of touch. They’re saying you’re taking advantage of them. Just like my kids would say about me if I wasn’t showing up to my family. They’re saying that about you and I’m not lying ‘cause they’re hitting me up in the DMs and they’re talking about you behind your back, so I know that they are.
If you want to get your sales producing at a higher level, you need to be motivating, inspiring, demonstrating, bringing in more referrals organically for the business.
One of the things I talked about on a podcast—it was a while ago—is the new generation of stylists do expect the salon owner to market more. That’s on you. So figuring out how to do that, it’s going to be critical.
If your stylists are producing more, even if you are a booth rental salon owner, you’re going to attract more booth renters because there’s a high volume there. And if you’re a commission salon owner and if you’re a commission salon owner or an employee salon owner, you’re naturally going to be making more money. They win, you win, right?
Next, we have selling more retail or products of any kind. I have podcasts dedicated to this in full. I’m of the mindset that retail is not dead. It just needs to be restored. I think that the way of selling retail in the past is dated.
I can remember stylists in my salon walking by the retail shelves and saying, “Did you need anything today?” Or “You didn’t need anything today?” Or “It’s been six weeks since you bought a shampoo, should I get that lined up for you?” That’s not how we sell retail right now. You also don’t say, “…and this is the thermal protectant I’m using on you. I’m going to rub it through your hair, mid shaft to the ends, and then at the end, I want you to see how your hair feels. Did you want to take this home?” None of that is modern. You can leave that all in 1999 where it belongs.
If your retail sales strategy sucks, then yeah, retail is dead. If you know what you’re doing, retail is alive and well. So figuring out how to sell retail, figuring out better product positioning could be a huge opportunity for you.
For those of you who are like, “That’s nice. There’s no money in it,” again, I just question why for you? Why is there no money in it for you? Have you not set it up so that—it’s not that people don’t shampoo their hair anymore. It’s that you’ve not set yourself up for success. So it’s just an area to look at.
Next, adding a new service offering. In this, I want you to really be smart about this. I think it’s really reckless when we’re like, “Oh, it’s trendy to do hair tinsel, so let’s all do it.” Do you really want to do that? Does that make sense for your brand, your target market? Do you want to learn a new skill or are you just grasping at cash? ‘Cause if you’re just grasping at cash, you don’t bother. I don’t want you doing that.
But if you’re like, “We’ve been thinking about doing this thing. I think our market could really use it. We could use some new energy,” explore it because sometimes introducing something new brings in new energy to a salon space. There’s a lot of potential there.
And then lastly, getting creative and looking at additional revenue sources. I know some great salons who set themselves up for education every Monday or a couple Mondays a month where it’s not just their salon team. They invite others from the greater area, they bring in educators. They sell tickets. Sometimes the educator makes money. The salon makes money. You can have your team internally training. There’s a lot of different things that you can do with your space to create additional revenue.
One of the things that we did that worked well for us, we called them “Ladies’ Night Out” and they were blow dry parties. Sometimes there’d be a whole group of friends that would come in. Sometimes it was pairs of people who would come in, you know, I’d come in with my friends. Somebody else would come in with their friend, whatever. They’d come in and do these blowout parties and we had it really minimal cost. I break down how to do this in Thrivers, but really minimal cost.
But what would happen is pretty much everybody would walk out with like 200 bucks in retail. They’d spend so much in retail, so we’d make like $2,000 in a night. Now our profit on that was much less. We’d make maybe like $350 in profit. However, because we set it up so that a client would bring a friend, our stylist would get referrals on the flip side, so we did it as a marketing promotional thing more than anything. Exposure. We got social content, all the stuff, but thinking about how else can we put ourselves out in the market? How else can we put ourselves out in the community to create additional revenue?
I want to close by asking you some questions, just some thinkers that you can run home with. Could your salon be open for business seven days a week if it’s not already? And don’t say things like, “Wow, we don’t have the front desk for it.” Forget all that. Forget all the logistics. Could it happen?
Could you add more styling chairs to expand your income-producing space? Do you have dead space in your salon that could be used otherwise? Would double shifting work for you? How many of your stylists are truly engaged and producing at a high level? For those who aren’t, do they need mentoring, guidance, or are they just not a fit?
Is there a service that’s popular in your market that your target market clients might enjoy seeing available in the salon? And are there any other ways you can increase revenue by partnering with a local business, expanding your offerings, or expanding your space?
I hope this is a little food for thought. As always, if you have more questions, please leave me a rating or review on iTunes with your questions and the comments. I get to as many as I possibly can here on the show and you’re always keeping me inspired there.
As I always like to say, so much love, happy business building, and I’ll see you on the next one.
