Do you feel like you were meant to have a kick-ass career as a hairstylist? 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. What is up? Welcome back to the Thriving Stylist Podcast.
I’m your host, Britt Seva. Today we’re talking about how salon owners stop taking clients and still make more money and don’t have a team who resents them for doing so, right? That’s like the little byline that I didn’t include in the title.
So this is something that we talked about a lot these last few weeks in the leadership trainings I’ve been hosting and exploring this concept of what does it look like when salon owners stop taking clients? How does their team feel?
What becomes possible? Why would a salon owner do it? We’re just exploring it.
I want to start right at the top in case a stylist is listening to this.
If you’re a stylist, the most ideal thing that could happen in the salon that you work at is that your owner stops taking clients, is still able to put food on their family’s table, and is able to lead and mentor your team full time.
When I see the happiest, fastest growing, most celebrated, most rewarded, most in abundance salon teams, it’s where owners have the capacity to lead.
And if you have an owner who’s taking clients, even two, three, four days a week, they’re still a human, and there’s not enough time to lead a business well.
It’s why you don’t see, generally speaking, any other business where the CEO, a profitable, successful, longevity based business, where the CEO is also the person who checks you out when you go to buy your item, right?
You don’t see the person who owns the business is running the cash register. Sometimes they do like to touch base, but that’s not their primary function. They’re running the business.
There’s all these other things that have to be done. Now in a small mom and pop shop, sure, they’re still working the register, they’re still talking with all the people, and that’s probably a business that can barely pay its bills.
If I’m a stylist, I don’t want to work for a salon owner who can barely pay their bills. That’s terrifying. I want to work for a salon owner who knows how to run a business.
And this episode is dedicated to salon owners who want to know how to run a business, to have the timing capacity to do so, to pay your team super well.
We’re going to actually talk about the money specifically, and still put food on your family’s table. That’s what this is all about. So I had a very fascinating conversation with a salon owner a few months back.
She’ll hear this episode and she’ll know I’m talking about her, but I will not say her name. And she was saying I think she was referring to maternity leave. Correct me if I’m wrong.
You’ll hit me up in the DMs and you’ll let me know. I think she was saying I was going out on maternity leave and I had made a plan to have my revenue covered while I was away on leave so the salon didn’t take a hit.
She wasn’t even like I’m trying to replace my own income. She was just like, I want the salon to be cool while I’m gone. And I realized I’m going to make up some numbers.
Let’s say she was doing $25,000 in services a month. She was like, I figured out how my team could cover the $25,000 and my salon would still do well. Wrong.
And she was like, I had calculated this to a T. I had figured it all out and she was wrong. She was like, I thought that if I simply matched the revenue that I was producing behind the chair, the business would stay as profitable.
Everything would all be good. And that’s not how the math maths. So if you’re a salon owner and you’re like, I would love to be able to stop taking clients, but how do I still feed myself?
How do I make sure the salon stays afloat? And what do I do to prevent us from running in the red? Most salon owners open their business being the highest producer, knowing that their revenue can float the business in good times and bad.
In fact, when somebody comes to me and they’re like, Britt, I’m thinking about opening my salon. The first thing I say is, okay, great.
Can the revenue you produce behind the chair cover all the monthly expenses, even if you don’t have a single team member working for you? And if the answer is yes, I say, I think you should go for it.
Even if that means there’s no profit, but at least you could keep the lights on, you could pay the lease, could keep the business cruise controlling, even if it wasn’t profitable, even if it hurt, even if it wasn’t great.
Ideally, you’d still be able to pay your rent at home and put gas in your car and groceries and whatever, but my requirement if you’re thinking about opening a salon is you cannot rely on anybody else, especially the first year.
So can you cover all the overhead and get by even if nobody works with you? So that’s the mindset we walk into salon ownership with. That is not the same mindset that we build the business with.
That’s just like the ticket to ride. That’s we’ve just entered the arena and now we build. That business is on your back.
We have to slowly get it off your back if you’re going to lead forward. So let’s talk some real numbers. So let’s imagine in our fantasy salon, we’re going to call it Seva Salon.
So in Seva Salon, the total revenue produced annually is half a million dollars. I’ve done well. My salon is doing quite well.
Thank you very much. It’s a fake salon, by the way. It’s not real.
But let’s imagine my fake salon, Seva Salon, is doing half a million dollars in annual revenue. And I am still behind the chair doing hair. And I’m producing a hundred and fifty thousand dollars in revenue.
This is very common. In fact, I’m going to read you a little quote from a recent salon survey. I was looking at the salon and this owner was like, I’m actually really proud of myself.
Our salon has only been open for six months and we’re already doing half a million dollars in revenue. And I was like, wow, that’s pretty incredible. Except for that the owner is producing three hundred thousand of that themselves.
That’s much less incredible. That that owner would be making more money just doing their own thing. Now, I assume that owner is going to build themselves forward.
But the fact that less than half the revenue is being produced by other team members, that’s a really vulnerable business. So we have to get out from under that as soon as possible.
But let’s imagine in my fake fantasy salon, I’m doing one hundred and fifty K. The rest of my team is doing three hundred and fifty K, which combined means five hundred K. And let’s keep it simple.
Nobody’s selling retail. We’re just doing services. This is pure service revenue.
So again, I’m a thriving salon, so I know what’s up. And we have a fifteen percent profit margin. So our profit is seventy five thousand dollars.
Okay. On everything that’s being done. So let’s imagine that I as the owner, I’m taking a seventy thousand dollar owner’s draw, which ends up being like a forty seven percent commission split.
I’m taking home seventy K and the business has seventy five thousand dollars in profit. And the rest of my team is being paid well. So that’s what this fake salon looks like.
OK, so let’s say I decide I’m going to stop taking clients and I’m going to pass along my clients to all of my team members.
And let’s imagine all of my clients stay and they all continue to pay the exact same amount as they were paying when they were seeing me. Like, let’s keep this best case scenario and keep the math as simple as possible.
So my goal is I need to replace the seventy thousand dollars that I’m currently taking home. Right? I’m doing a hundred and fifty thousand dollars in services.
My team is doing three hundred and fifty. The salon is profiting seventy five K, but I’m not taking that seventy five K home by myself. Here’s a little like generic random business advice.
In my real coaching business at Thriving Stylist, when there’s profit, I keep it in the business and we use it to feed the business. That’s how we’ve grown the business forward. Now, as a salon owner, there might not be enough to go around.
And I totally understand that. But the idea is you don’t just take all the profit as owners draw. The profit gets used to fund the business forward.
Anyway, so there’s $70,000 that the owner is actually taking home. And then the profit margin, which, by the way, every stylist should want their salon to have a profit margin. That’s how the salon builds forward.
Let’s imagine that’s $75,000, and then we can use that next year for marketing and upgrades and all kind of stuff. I still need to take home $70,000 a year as the owner because I have rent to pay or a mortgage to pay. I’ve got a family to feed.
I got a car payment, all this kind of stuff. I still want my business profit margin to stay the same, 15 percent. How much extra revenue is needed is the question.
The revenue the team produces is not the same as the revenue I produces, and this is the part that freaks most salon owners out.
Because for every dollar in new service revenue that’s done by the team, the business keeps 50 cents if it’s a 50 percent commission split, and the team member gets the other 50 cents.
So when I was the salon owner, 100 percent of my revenue was going towards the salon’s bottom line, right? And even though I was taking my $70,000 owners draw at the end, 100 percent of what I produce was going towards the bottom line.
Well, now only 50 percent of what’s produced is going towards the bottom line, and the other 50 percent is going to pay the team the commissions they’ve earned, but I still want my $70,000 because I still need to feed my family and pay my mortgage
and pay my car note and all that kind of stuff. Are you with me?
So the way the math maths is for the owner to step away, still be able to pay themselves, their team to still make great commissions, the salon to still be profitable, and the revenue to stay the same.
The owner needs to not just replace the service revenue that they were generating from behind the chair, which in my fake Seva salon was $150,000. I need to replace that. My team needs to cover that $150,000.
But also, we need to generate my take home pay times two on top of that. So remember, in this fantasy salon, I was taking home $70,000 as my owner’s compensation for the year. So you take $70,000 times two, which is $140,000.
On top of the $150,000, we need to replace. So now, I have a target for myself.
If I can get my salon team producing $640,000 in services, which was the $500,000 we were doing as a team, plus the extra $140,000 that I just calculated that is needed for me to be able to continue to pay myself, then I can step off the floor.
But remember, the team has to be doing $640,000, not me plus the team. The team independently has to be doing $640,000. I now have a target.
And I know I’m going to stay on the floor. I’m going to keep doing clients.
But I know the math for myself that once the team is not just producing $350,000 in services a year, once they get to $640,000, I can still take home $70,000 a year as an owner and not have to take clients anymore.
And my goal is for every owner to know what their target is, because it’s motivating to you and it’s going to help incentivize you to build a team that is producing at that level so that everybody wins.
So to the stylists in the room who were freaked out by the title of this episode thinking I was going to come on and tell salon owners how to take advantage of their stylists, I’m not because I believe it’s on the owner to figure out how to
essentially get their team producing double. Now what happens when the stylists are producing double? What happens to their paychecks? You’re now making twice as much too.
So if I can convince your owner to build a plan to increase demand so that the revenue of everybody in the building doubles, are you now starting to be OK with your owner getting off the floor?
If that means you get to take home twice as much money, twice as much, does it start to sound OK for your owner to step off the floor? I’m going to say probably yes. So how long is this all going to take?
Because I just painted like this beautiful picture of, oh my gosh, so all you do is you take the salon from 500,000 to 640, and all of your cyclists make twice as much money, and the salon owner is no longer working behind the chair anymore, and
everything is great. That sounds too good to be true, and I completely understand. And so like, let’s dismantle it for a second. So I have always coached to healthy salons growing 15% year over year, not all salons do it.
That’s not just a Britt Seva metric. When you look at any good business advice, they say 15% growth year over year is healthy. Anything more than that is great.
15% year over year is healthy. So that’s what we’re looking for. When I look at stories in the Thriving Stylist community, we have some salons that are growing 40, 50% year over year.
And these are not like teeny tiny struggling salons. These are like big salons that are making real money year over year. So let’s kind of split it down the middle.
If you were a salon that was growing relatively quickly and your revenue was growing 30% year over year, in 2.3 years, your salon would go from that 500k to 640k and the owner could step away. 2.3 years if you were growing by 30% year over year.
Now, if you were growing by 15% year over year, that would take you five years to get there. If you were growing by 10% year over year, it would take you more like six and a half. And the reason why I share this is demand is critical.
There’s not much we can do to grow your business if you’re not focused on marketing, if you’re not focused on demand.
If we’re still living in the mindset of the team needs to market themselves, the team has to do all the marketing, the team has to fill their own shares, you will have a real tough time growing at the scale you need to, to sustain your profit
margins, to sustain your revenue, to retain high performers. It’s going to be very, very challenging. So what I invite you to do, this episode is a little bit shorty and sweetie. I know it’s really mathy.
What I invite you to do is to run the math for yourselves. I know I threw a lot of numbers at you.
If you were just in our leadership bootcamp, or you were coming to our free weeks of trainings that we just hosted, if you’re listening to this podcast episode in real time, we ran the math there too.
So hopefully you got to see it live and in person, but I encourage you to simply create a target for yourself and be able to say, okay, if my salon was producing X and none of that revenue was coming from me, it was coming strictly from my team, I
could take home what I am making right now and still be okay. Because if you had that as your own personal goal, I think you’d feel like you were off the hamster wheel and actually working towards something. I hope this has been helpful.
So much love, happy business building, I’ll see you on the next one.