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 we are answering an episode from a Thriver Society member and a Thriving Stylist podcast listener.
If you’ve ever wondered how to get my advice on something, this is a really great way to do it. There’s not a lot of other ways to get free coaching from me. What you can do is leave me a rating and review on iTunes, insert your question into the comments. That’s where I get 90% of the podcast episodes from.
Also, if you’re in any of the Thriver Society member Facebook groups, I also comb through the groups and when I see a question that I think would be great podcast content, I bring it on here. And then of course, you know I’m answering questions via video every single week.
So a couple ways to get questions into me, but this was a great one. I’m going to change the facts that I believe don’t affect the coaching in any way, but I want to change enough facts that I can protect this salon owner’s identity.
I want to read you her initial question. She says, “I currently have a commission based salon and although I was very careful coming up with a menu and coaching my team on metrics, the math doesn’t add up and we’ve been operating at a loss for some time.” Can anybody relate to that? I bet you can whether you’re a booth rental or commission. This is common.
“I haven’t been able to pay myself much and then I’m behind on all of my personal bills and my mental health isn’t great, like wanting to unlive myself, not great.” That is concerning and heartbreaking and relatable I know for a lot of business owners on a real level because sometimes the pressure and the confusion and the financial loss is all consuming and I relate.
She says, “I realized my options were to either close or switch to a booth rental model. So I let my employees know that I had to close the business, but they did have the option of staying on as booth renters. I was transparent completely about why I made this decision and how I’m being personally affected. I’m not a fan of booth rental salon setups, but we’re small so I don’t see this as being super different then people going to studio suites.”
Okay, I want to interrupt right here for just a second, and to this owner, I told you I was doing this podcast, and I don’t want you to panic. Some of what I’m going to coach to is saying, I wouldn’t have handled this the same way, or I would’ve done things differently. A lot of this is going to be lessons to learn for the future and a lot of what I’m going to share is from what I experienced working in the salon.
When you say “I shared to my team and was very transparent about why I had to make this decision and how I’m being personally affected,” I will say that I believe that is always a mistake to be totally honest. I’ve watched this happen several times, once within my own salon walls. And it was funny, I actually saw it happen in our own salon twice. The first time I saw it, I was like, “Boop, don’t do that again. Lesson learned.” It was the owner of my salon who was sharing very openly that if the team didn’t do better at selling retail, that he was going to have a financial hardship personally. I watched the salon chatter that happened on the back end of that announcement and it was ugly. The stylists instantly turned against him and were like, “I’m sorry, I didn’t think we were working to pay your mortgage.” It didn’t land well. It felt like, “Hello, all you workers, please work harder so that I can pay my bills.” It’s just one of those things where it’s like it never lands well. I’ve not seen it go well.
There was another instance where, full transparency, the owner had decided to bring on a different coaching company—loved what I was doing, but was like, “What if we can take it up a notch by bringing in this third party?” Well, in bringing in the third party, our income dropped significantly because the business became all about making more money and turning us into a profit machine instead of coaching to the way I had been doing. It was ultimately the reason I left.
But as he was rolling this out and as this third party coaching company actually decreased our profits pretty rapidly, he decided to host another meeting to talk about it. This time I coached him through it and I was like, “You know what? Don’t bring your personal finance into this, no matter how stressful it is for you. Keep this about goals and personal development. Keep it positive. That’s how it’s going to land.”
Well, he didn’t take my advice and instead, he went on and on and on about how scared he was and how this was affecting him personally, and it was overly transparent.
Do you remember where I talked on the podcast about the difference between authenticity and naked transparency? A lot of times when we’re like, “I’m honest and I’m talking about how it’s personally affecting me,” it’s that naked transparency and it’s scary for people. It’s too much. Rather than coming across positive, it comes across terrifying and I think that may be a part of what happened.
Don’t panic though. That’s something that we can always overcome. But just a note, my business has gone through hard times too and my team will tell you, never once have I come to them and said how it’s affected me personally, how it’s affected my family. That pressure’s not on them. That’s for me to figure out. I chose to be a business owner. I can’t pass that responsibility onto anybody else. The success or failure of this business will fall to me at the end of the day. If I don’t believe I have the right people in the building, if I believe hard decisions need to be made to ensure that the business survives—we call that the enterprise commitment in my business—then I have to make those decisions. But never ever do I go to my team and add that pressure to them. Just something to keep in mind.
Then she says, “One of my team members immediately asked how much time they have to decide whether or not they want to booth rent, and I was caught off guard because I had just explained that I was literally on the verge of closing my doors, but offering them a lifeline if they wanted to stay and rent. I told them they only had until this week.”
Okay, so I hear what you’re saying. You’re like, “I’m at the end of my rope.” What I would’ve done differently is not approach them when you’re at the end of the rope because now, yeah, they are shocked because they didn’t realize that this was coming. While you’re like, “come on, y’all, give me some empathy, I’m drowning,” they feel like, “Okay, perfect. You just pulled us into the deep end with you.”
When you choose to be a salon owner, you’re choosing to be a leader, and this is why I talk about leadership all the time. You’re supposed to be the lifeguard who’s sitting in that little lifeguard tower, watching all the swimmers below, but now you just admitted to them, “I can’t swim. I should have never become a lifeguard,” and you’re pulling their legs and they’re drowning now with you. Imagine how that feels to them, right? It’s just important that we empathize with what they’re going through.
Then she says, “This is someone I’ve actually been friends with for years before I open the salon. Now my team won’t even make eye contact with me. When I asked why they were avoiding me, their answer was, ‘I have nothing to say to you. How are you planning to pay me this week?’ I’ve literally never paid my staff late or anything. They’ve always come first. When I said I planned on talking to the payroll company about adding days from this week, they told me to directly send it to their bank account instead.”
Yes, because they’re scared because you’re pulling their ankles down into the deep end and they’re afraid they’re going to drown with you. It’s scary. Now what you have to understand is every decision, every communication is coming from a place of fear. Now this owner is saying, “I kind of don’t even want them to stay now. I find their anger about the situation really suspicious and I feel like their behavior is highly inappropriate. They don’t have any clients tomorrow and I feel like I need to say something when they’re done with their clients, but I don’t know how to say what I want to say and I’m nervous about it.”
Okay, I got to be honest. I don’t find their anger to be misguided. They probably feel blindsided. As soon as you are hitting a rough patch, that’s when you need to communicate. We do this a lot as business owners is, we’re like, “It’ll be fine, it’ll be fine, it’ll be fine,” and you push and push and push and push until we’re at the crossroads of, “I don’t know if I can do this anymore.” When we get to that place of desperation, we word vomit a little bit and we share a lot of things and what happens is the fear spreads like wildfire and you send your team into conservation/preservation mode. They’re like, “Oh my goodness, if my leader is now out of the lifeguard tower and drowning in the deep end and pulling my ankles down with them, I need to find a lifeguard who can save me,” i.e., another salon to work at, right? With the owner who’s sitting in the tower, not drowning in the deep end and/or “I need to doggy paddle my way to the side of the pool so I don’t go down with this ship,” right? They’re trying to figure it out.
What I think happened here is a couple things went wrong. We involved the team when it was a little too late and then our communication with them didn’t go well. If we could go back in time, which we can’t, it’s no worries. So this is a lesson learned.
And I even told this person, I was like, “Man, I wish I had caught you before you got to this crossroads” because now a lot of my advice is in hindsight, right?
When you feel like something is off—and I have very much had these conversations in my business. My team will tell you that I have been honest without being naked, transparent. There’s a difference. When you feel like something is off, as soon as you identify a problem, talk about it. Burying the problems under the rug is not going to help.
How many of you listening to this podcast have been in any kind of serious relationship? Relationship with a parent, relationship with a partner, relationship with a child? How do things go when something irritates you? When there’s financial trouble, when you get into a bind, when you don’t understand something and instead of talking about it, you just shove it in a drawer and hope it goes away?
It reminds me of the time when I was 16 years old and got my first speeding ticket and was mortified and knew my parents would kill me. I was like, “You know what I’m going to do? I’m not going to tell my dad. Instead I’m just going to ignore the ticket,” and I don’t know, I hadn’t thought much more about it than that. Well I got a court summons about two months later, saying that I was in violation of the county, and that I had a court appearance I was going to have to miss a day of school for because here I was a junior in high school to go to my court appearance. How did I handle that? I took the court summons and I left it under my dad’s pillow because this is what 16-year-olds do. And I was like, “I’m not even going to talk to him about it. I’m going to leave this court summons under his pillow when he’s trying to go to sleep at night. He’ll stumble upon this,” and then I don’t know what I thought was going to happen next.
What happened next was not cute. What happened next is he was pissed, rightfully so, and because I avoided the conversation, I had to take a day off school, he had to take a day off work. I lost my keys for a month, we paid a fine, it ended up being fine. I had to go to traffic school for two days.
What could have been a $127 ticket ended up being eight hours of my time, eight hours of my dad’s time, 24 hours of me in traffic school because I had let this become a festering wound rather than just tackling it head on.
Often we do that in our businesses too. You’ve turned something that could have been a simple conversation—I could have called my dad and been like, “I got this speeding ticket. I know I screwed up. Help me fix this,” and he would have. I might have still lost my keys for a month. That probably would’ve happened either way. But imagine all the other pain neither of us would’ve had to go through. You have to think of your business like that too and oftentimes we don’t. I think in this instance the salon owner didn’t think it through.
Let’s go back for a second because I asked for more details. I was like, “Tell me how we got in this position.” So tell me about the speeding ticket is basically what I said. Tell me about how we got here. How did you get buried underwater financially in your business? And she told me about her compensation structure.
Remember this is an employee based salon. She says, “My payment structure is hourly pay plus tips,”—which is pretty standard, right?—“and profit based commission.” This is normal. I see this a lot. I don’t know if the salon is based in California, but if you know, you know, in California you can’t just pay a 40% commission. It’s illegal here. There’s some other states where you can’t do that either, but California is the strictest, so I tend to lean in here.
In California, the best way to do commission is essentially hourly pay of course plus tips and then some kind of profit share. That’s essentially the cleanest, most legal way to do it. That’s what this person’s doing.
Then she says, “The commission comes from the gross profit for the week and is distributed in either 5%, 10%, or 15% sums,” and I’ve got to assume the more profit there is, the higher the percentage is. I didn’t get clarification on that, but I think that’s safe to assume.
Then she told me about her overhead. She told me what her rent was, the average supplies per week and she went on to say, “I created a spreadsheet and discovered that my business needs to make $520 a day in order to hit our goals. Our biggest issue was theft of time,” which to me, when people say time theft, it means that people who have productive hours are not using them productively. I think it’s safe to assume her stylists were not as booked as they could be. Also because in her initial message she said they have no clients tomorrow, so it’s like, yeah, if you’ve got employees who are not taking clients, they’re not profitable, they’re sucking the business dry and not producing a profit.
She says, “I’m trying to coach my team about making sure to properly charge their guests what their services are and to be aware of the amount of time each service takes. But I was told that’s too stressful for them to think about.”
That is too stressful for them to think about. It is.
Imagine being a newer stylist, like when I look at the rate of pay these stylists are making, it’s entry-level compensation. They’re not even making $20 an hour, which is fine for a new stylist, that is appropriate to be making entry level compensation. That makes sense. But when you’re talking about an entry-level stylist and we’re trying to coach them to charge full price, be mindful of your service timing, thinking about your cost per hour, it’s too much. It is too much. That’s why they’re not the salon owner. That’s why they’re the employee.
What I agree with is they should not be discounting their services. That should not be allowed. It shouldn’t be an option for them. For me, if a stylist was discounting their services and it was not approved by me, they were written up and three writeups is a termination and I would terminate people if they weren’t following the rules.
Now, a lot of times, as owners, we’re scared to do that. We’re like, “But I like Sadie, I don’t want to write Sadie up.” Okay, is Sadie your friend or your employee? She’s both. Okay, so are you running a business or are you running a sorority? What are we doing here?” Because I understand being friends with your team, I’m friends with my team, I care about them deeply. They know that I’ve had to let some of my friends go. I’ve had to fire some of them, still love them, still connect with them, but I’m running a business. At some point we have to make those really difficult decisions, right?
I ran the numbers for this person and my numbers are different than hers. She says, “I figured out my business needs to do $520 a day to hit our goals.” When we look at profit for profit—and I guarantee this person didn’t do that and that’s why they ended up in the hole. She’s probably looking at $65 an hour, $520 a day, we’re good to go. Yeah. The challenge is, that’s actually not the math on that. In order to profit $520 a day, when you look at the profit for profit calculation that I have in Thriving Leadership, you actually need to be doing $1,800 a day in services and that would allow you to retain $540 in profit. This is why I say the stylist still gets the lion’s share. I’m saying in an $1,800 service-day, the salon owner gets $540, right? The stylists still get the lion’s share. But you’re not shooting for $540 a day. You’re shooting for $1800 a day. The reason why you were saying I’m behind in my personal bills, I’m in over my head, I’m drowning in the deep end is likely because you were shooting for the wrong number and so the target should have been $1,800 a day.
If you have three people in the building, we could average it out and say, “You all need to be producing 600 bucks a day,” which saying everyone’s got to do $75 an hour in services isn’t outrageous in a lot of markets, but maybe in yours that was too much.
Now you as the owner, I’m going to assume you’re charging a higher price point so it’s probably more reasonable for you. Or maybe you look at these numbers and you’re like, “Holy smokes, there’s no way we would’ve been able to pull that off.” Yeah, knowledge is power, right? We have to look at those real numbers.
Then she says, “My brain is absolutely scrambled at the moment, so please let me know what other information to send.” Then I said, “Tell me more about the profit component,” because I had a feeling in my gut—I’ve been doing this long enough to know where things get shady. And I was like, “So it sounds like your business wasn’t profitable, right?” Obviously based on all these facts. And so I said, “So then is it fair to assume they never got those commission percentages?” Remember she said it was hourly plus tips, plus essentially a profit share commission, but she’s not profitable on all accounts, right? She says, “Well no, because I went off sales cost minus the cost of operations,” which is not the same as profit margin. She said, “So there were some weeks where the business technically didn’t profit, but they still made commission.”
Commission from where? You didn’t have the profit. The only way she could pay these people a commission is by what? Putting it on a personal credit card, taking a home equity loan. The business didn’t have it and that’s why she’s taking all these personal sacrifices to compensate her team.
Here’s what I think went right and here’s what I think failed. I think that your comp structure was actually great. I like hourly plus tips plus commissions. I think that’s great. I think that you likely didn’t properly calculate your compensation, which is why I have that in-depth comp calculator in Thriving Leadership because I think it’s really important to set up a comp structure where you’re not drowning.
I can’t even tell you how many salon owners I’ve talked to that are like, “Well, great news Britt, we did a million dollars last year in revenue.” I’m like, “That’s amazing. What’s your profit margin?” “1%.” So you worked a million dollars worth of hard and you’re profiting 1%. That’s scary. If anything were to go wrong, you have literally no margin for error.
When we’re working hard and when we’re doing all these things and the profit isn’t there, we got a problem. Even if we were to go back and say, “No, no, no, I could actually run the business even if we were doing a thousand dollars a day in services,” cool. Then your stylists need to know, “Friend, you’ve got to be doing $350 a day in services. If you have no clients today, then you’re going to have to do $700 in services tomorrow.” And if they’re like, “Well Britt, I can’t do that,” right? Imagine I’m this salon owner. “Well, Britt, I can’t do that.” “Okay, so let’s sit down and make a plan. Log into Thrivers Society. What are you doing on your marketing funnel? Have you done these nurture strategies yet?” That’s where the coaching comes into play.
When we just go to our team and we say, “I need you to make more money. I can’t afford to pay everybody. I need you to think about your service timing,” all of those kind of comments come from a place of fear. When we can partner with our team and say, “I want to make this work for both of us. I’m a new owner. I’m working to be a leader. I want to compensate you fairly. Here’s what needs to happen so that we can both reach our financial goals.”
Maybe you sit down with your team and you even say, “What are your financial goals?”
“I want to make 80 grand this year.”
“Okay, great. Currently, you’re doing about $200 a day in services. To go from $200 a day to 80 grand in a year is lofty. We can do that. It’s going to be an aggressive growth strategy. Are you ready to get aggressive to grow? Yes or no?”
“Well, I don’t know if I’m ready to be aggressive.”
“Okay? If you’re not ready to be aggressive, let’s shift our compensation expectation. So if you’re not ready to be aggressive, I’m going to shift your compensation to more like $45,000 this year.”
Then they have to decide, do they want to settle and make 45 or do they want to get aggressive and make 80? That’s up to them. That’s not up to you.
If they say, “Yeah, I can do 45, that sounds more reasonable,” great. In order for you to make 45 grand this year, you need to be doing this much a day in services, and that’s simple math. I have a calculator that shows you exactly how to do it in Thriving Leadership.
On the days they’re not doing that, we sit down with our team and we say, “Jacqueline, I know we set up this plan together for you to do the 45 grand a year. Let’s be honest, you’re tracking to do more like 19 grand this year. Let’s close the gap. What are some of the things you’re doing to market yourself?”
“Nothing. I don’t know what I’m doing.”
“Okay, let’s educate to get you there so that you do know what you’re doing.”
“I don’t have the time to market myself.”
“Okay, so then how do you intend to grow?”
“I don’t know.”
Okay, well, if Jacqueline doesn’t want to educate herself, and Jacqueline doesn’t want to market herself, she can’t work in the building.
This is one of the things we have to remember as salon owners too. We have to be hiring the right driven people to do the job. They are out there. I’ll be honest, I think the majority of our industry is actually really driven. They just need to have the guidance and the right framework and the right systems in place to do it. And I got to tell you, your framework is beautiful. The idea of making an hourly guaranteed wage plus tips plus profit share, dang, that’s a dream opportunity for somebody. So your structure is good.
The place that went wrong is I believe you were operating from a place of fear. I think that you likely didn’t know a lot of what I just shared. When you got scared—here’s the other thing too. When we get scared, we lean on our friends. If one of the stylists in the building is somebody you consider to be a friend, it’s no surprise you lean on them. However, it’s also not appropriate and this is where it gets dicey because our employees are not our friends. They’re our team members. We can care for them, but we can’t treat them like a friendship.
I actually learned this lesson with my husband as well. I used to expect him to be my business partner, my rock, my shoulder to cry on, and my loving husband and an amazing dad. He was like, “I would love to be all the things in the world for you, but that’s an unreasonable expectation.” And it is. It’s a totally unreasonable expectation.
When we expect our stylists to also be our confidants and our friends and our advisors and our business partners, but they’re not making a profit share, it doesn’t make sense.
What I think is you have a really good thing going for you. I want to give you some next steps. I want you to really ask yourself do I want to be a leader? Because being a leader is a whole skillset in and of itself.
I think you have the talent. I think you have the vision. I think you need clarity around what it looks like to motivate a team to success.
I think you need a plan to do it. Thriving Leadership has it. I can show you exactly how to do it and I think you need to take a breath and give yourself some grace because you’re doing 80% of things right. The only thing that got you was the fear and the fear is normal. I get scared too. That’s so relatable. Lean into your Thrivers community, lean into your Facebook groups, and you did, right? When you asked this question in the Facebook group, how many responses did you get? I just looked right now. 31 responses. That’s amazing. And these are in depth. It’s not just like, it’s “Okay, you’ll be fine.” In depth responses, right?
I know that, flash forward, at least one of your team members has left. What I encourage you to do is take this as a reminder that we have to be grateful for every door that slams in our face because it’s teaching you a lesson. You relieved the pressure temporarily. You don’t have a payroll to carry right now. You can just focus on yourself, your beautiful business, your clients, your loved ones, and then ask yourself, do I want to take on being a leader? You can make tremendous profit and make a huge impact employing stylists. And I truly do believe you have the power to make this happen. I see your potential. I think you’re absolutely amazing and I know that this can be really, really great for you. I know that you’re heartbroken and I know that this has felt emotional and you’ve been on a journey through this process.
This is what business ownership looks like. It’s the highs and the lows and the learnings and the hardships. I want you to see it as a gift that now you’re back on your own focusing on yourself. Take this time to build out the structure. Take this time to run the numbers. I promise you there are amazing people out there if you have a beautiful structure for them to work in.
Also, if I can give you a little bit of advice, don’t hire a friend. Hire somebody who’s an employee, who can be mentored, who’s motivated, who wants to learn, is choosing to be a lifelong learner. But you’ve got a lot of things going for you. All right?
This is a deep one. I hope you took some takeaways.
So much love, happy business building, and I’ll see you on the next one.
