Episode #393 – Ownership Blind Spots Keeping Salon Owners Broke

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Are you a salon owner constantly feeling that squeeze, wondering why your best stylists might be eyeing the door? Listen, the urgency is here, right now, for salon owners to build phenomenal environments for our teams. That’s exactly why, today, we’re diving deep into what’s really happening in our industry, uncovering the critical shifts you absolutely must make if you want to do more than just survive, and you want to truly thrive.

Stylists have access to all the independent business education they could ever want. So, what’s going to make them choose your salon? You’ve got to offer something those highly driven, highly motivated stylists can’t get anywhere else. And honestly, it all comes back to leadership. The way salon owners make money has radically changed since even 2015, and this entire episode is dedicated to breaking down exactly what that looks like for you, right now.

Thriving Leadership Method hands salon owners a step-by-step strategy to implement an irresistible culture and create a powerful growth path…all while setting themselves up for structure and profit, and you can join the waitlist NOW at www.thrivingstylist.com/thrivingleadershipmethod/

With Grow My Clientele Calculator, you’ll get instant clarity on how many new clients you’ll need to hit your 2025 financial goals! Enter just four numbers, and this tool will show you exactly how many new guests you need monthly and yearly to reach your target income. No guesswork or complicated math required, and you can get it now at www.thrivingstylist.com/growmyclientele/.  

Do you have a question for me that you’d like answered in a future episode like this one? A great way to do that is to head over to Apple Podcasts and leave a rating and review with your question. I’m looking forward to answering your question on a future episode on the podcast! 

If you’re not already following us, @thethrivingstylist, what are you waiting for? This is where I share pro tips every single week, along with winning strategies, testimonials, and amazing breakthroughs from my audience. You’re not going to want to miss out on this.

Hi-lights you won’t want to miss:

>>>Why relying on owner services for profit is an outdated model and what salon leaders should be focusing on instead

>>>The reasons that stylist retention is the number one secret of million-dollar salons

>>>How successful salons are built on the foundation of implementing the right systems and structures, not just any

>>>Why not having an annual budget and a plan for profit is holding so many salons back right now

>>>A look at bad compensation systems and different perspective to take in this area

>>>What to consider about retail commissions to ensure they genuinely contribute to your salon’s overall profitability

>>>How the lack of robust growth strategies, along with emotional decision-making, can create significant challenges for salon owners  

>>>The big missteps salon owners are making by remaining stuck in their old ways

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 life long 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 and welcome back to the Thriving Stylist Podcast.

I’m your host Britt Seva, and today we’re talking about ownership, blind spots, keeping salon owners broke.

You know, when I had this realization today, I was driving this morning and I was like, I’ve been talking about leadership so much more than historically I had.

Like when I started this coaching business in 2015, I was filling a really specific gap, and the gap was in 2015, 2016, when I first started Thriver Society, there was no coaching for independent stylists.

Like if you wanted to learn how to build a business as a stylist, the best way to do it was to be with a salon company, like often a commission salon, where they were bringing in coaches and consultants and like teaching that kind of training.

But if you were independent, there was really no way to get access to it.

And if you think back, like if you were in the industry back then, what happened is in 2015, 2016, I’m going to say like into 2017, there was this independent education boom.

Where there was a group of us.

At the time, there was like maybe a dozen at the inception.

I was really the only one teaching business.

And somebody was teaching blonding and somebody was teaching cuts.

But they did like really cool stuff, styling, bridal, like really cool stuff.

And we were all independent.

We didn’t have a brand sponsor behind us.

We were just kind of like teaching and doing our own thing.

We were filling this very specific niche because at that time in 2015 and 2016, it was very much a salon owner’s market.

And they got to say, hey, you as a stylist have to fill your own chair and you have to do it yourself.

And that was the way it was.

And then the market has really shifted in the last like, I mean, it’s been a minute, six, seven, eight, even years.

Wasn’t too long after that.

That because stylist did get so sharp about what it looked like to build business and not just because of me, but because of this boom that continued to happen where there was so much education available for stylists beyond the salon.

And owners were like, well, this is amazing.

There’s an abundance of resources.

And stylists were like, this is amazing.

I can really come up on the back end of this.

And I’m not reliant on my salon to teach me everything.

I can figure it out myself.

Well, the natural repercussion and ripple effect of that is that a lot of stylists did figure out how to do it themselves.

And those who did figure out how to do it themselves were kind of like, hold on a second.

If I have figured out how to fill my own chair myself, what do I need this salon for?

Now, some salons got smart and they said, well, we’re going to create an unbeatable salon environment so that you going anywhere else feels not viable.

And that’s where the magic really happens.

We’re going to talk about that a little bit today.

But I would say probably, I wouldn’t say less than 10% of salons really understood the assignment on that one and understood what that would have to look like to do that with any degree of longevity.

So I think there are some who did it good enough for the last five years, and it’ll probably get them through the next couple.

And then it’s going to start to get funky.

So right now, we’re in the season.

I’ve been calling the great divide.

We’ve been talking about this for a couple of years.

And the reason I’m having to kind of not pivot back, but find more of a balance between coaching salon leaders and coaching independent stylist is there is now, like the urgency is here.

Salon leaders have to create phenomenal environments for their teams to work in.

And one of those things that I do believe salon owners are now responsible for is filling the chairs of their stylist, because if they don’t do that, it goes back to that initial shift that I talked about of stylists have all the education and opportunity out there now.

The most driven ones are just going to do it themselves.

Unless you create a better environment for them to build in, they’re just going to do it themselves and do it their own way.

So then who are you left with?

If the most driven, most successful stylists are going to pick up all the independent business building education that’s out there and run with it, and you’re like, why don’t they want to work for me?

Because they don’t need to.

Because they’ve done it all themselves.

So you have to provide something for those highly driven, highly motivated ones that they cannot get on their own, and that’s the gap you have to fill.

So it’s funny when I hear owners complaining like, well, my whole team is not very driven and nobody has motivation anymore.

Actually, they do have motivation because I talked to so many stylists who were doing so, so well.

The problem is you’re not attracting them.

They’re going to work somewhere else.

And so what you’re ending up with, if you look around your team and you’re like, man, they’re demotivated, you’re getting the demotivated ones.

And or you’re not creating an environment for those who are driven to thrive.

Like it really does go back to leadership.

There is something missing.

And I really find that when a salon understands how they can make money, what it actually looks like, it does not look like it did even in 2015.

Like the way that salon owners need to make money has radically changed.

And this episode is dedicated to that.

So when we get down to like nuts and bolts in a salon, we really have three primary revenue sources.

The Stylist Revenue, right?

Whatever your Stylist produced behind the chair.

Retail Profits.

And whenever I say Retail Profits, and notice I didn’t say Retail Revenue.

We’re going to talk about that a lot today.

I mean it when I say Retail Profits.

And we could say Stylist Profits too.

Like someone’s going to be like, well, it’s all about the profit and I get it.

But we’re going to look at Stylist Revenue a little bit different today.

Retail Profits, we’re going to talk about at scale.

When I say retail, it could even be like extensions, like anything that is not service-based, essentially like selling anything that’s not service-based is another avenue.

And then the third revenue source that most salons lean into is what?

The owner’s services produced.

And that is the old school model.

Like we’re talking like pre, it’s so new, it’s so recent, like pre 2013, even 2014, you didn’t see a lot of salons where the owner wasn’t working behind the chair anymore, sometimes, but it was quite rare.

Now you’re seeing it in abundance because salon owners are realizing how to lean into these profit levers and make magic happen.

But that third source, the owner’s revenue, for a long time, that was a part of the magic formula, is that the owner did enough in services to always be able to pay the bills and overhead.

It was like paying for peace of mind, right?

So in most salons still today, the owner is still working behind the chair because they have not been able to figure out how to generate enough profit margin beyond their own services to pay themselves enough to have a livelihood.

And we’ll talk about that for a minute.

Actually, let’s talk about it now.

I’m not of the belief that every owner has to stop taking clients at all.

I think that if you are happy taking clients, but here’s the cross check, like if you’re really happy, like you love it, it brings you so much joy, it fills your cup, you’re never resentful, you enjoy your days behind the chair, maybe sometimes more than doing the leadership stuff, but you also love the leadership stuff.

If you can truly and sincerely say you’re doing the work behind the chair because you like having your hands in it and you love working with the clients, I’m fine for it.

So long as the salon would be okay financially with you not doing it, like you’re really doing it for the love of the game, you’re not doing out of necessity, then I see it and I get it.

The other thing is you have my permission to do that if you are doing all of the other things we’re talking about.

If you being behind the chair doing clients is preventing you from being an exceptional leader, it’s a problem.

It’s almost like escapism, like we’re doing the work that comes easy instead of doing the necessary leadership work and that’s where we get ourselves into a bind.

I had a business coach tell me many, many years back that if you have to provide all the services yourself, you’re not a business owner, you’re a glutton for punishment.

That one really slapped me in the face because it was like, so many of us open businesses and just create these really heavy, really complex, really stressful jobs for ourselves, where we’re still doing all the work, we’re still carrying the financial burden, and now we’ve got a whole team of people who also expect things from us.

And that’s not what really successful business leadership looks like.

And a lot of times in salon ownership, especially, you do that and you’re not even making any more money.

Like it maybe it feels really fulfilling, which is beautiful.

There’s so much so much value in the impact and the give back and the mentorship and the fulfillment, all of that for sure.

But the revenue doesn’t really come.

Right.

So I want to talk about the blind spots that I think a lot of owners are ignoring, that’s keeping them broke and just kind of centering back to the conversation around, like, what do your stylist need?

What do you need to be doing to ensure you make as much money as possible?

Your stylist make as much money as possible?

Like, I want you to be the one.

I want you to be the salon that people want to go to.

So we all know what is the number one most important thing in any salon?

I could hear, like, if I asked that question live to a room, let’s say I was speaking on a stage, I’d imagine somebody would say revenue.

Like, as I said that, I imagined what people would say back to me, and they’d say revenue.

I disagree.

The number one thing is stylist retention.

And it’s the thing that a lot of salon owners who have been in the game long enough know, it’s the most fragile piece of any salon business, is how do you keep your best performers, your long timers happy, growing, motivated, and what does that look like?

So I always say one of my superpowers as a business coach is I do get to have conversations with some really powerful salon owners.

And when you look at the salon owners today who are doing over a million dollars in revenue with 10% or more profit margins, there’s five consistent things I see throughout.

One, they’ve implemented the right systems and structure, not just systems and structure.

I’m actually going to share with you a story about the wrong systems and structure in just a second.

Number two, they put branding first.

Number three, is they put marketing second.

The first thing they focus on is branding.

The second thing they focus on is marketing.

Notice I didn’t say, advanced education, specialty technique.

That’s not the pattern that you see.

It’s branding first, marketing second.

Then number four, creating an unbeatable salon environment to work in.

You’ll find a lot of stylists say, well, it’s not perfect here, but the environment is flawless.

I will not find anywhere better.

There’s so much weight to that.

And lastly, they pay their team members really, really well.

So we’re going to kind of cover all of those things.

And I want to share a lot of strategic advice.

I want to start with that first one, implementing the right systems and structure, story time.

So this is from an owner who wrote in to me recently, kind of explaining a dark time in her salon.

And I want to share the story because I think a lot of you will find truth in it.

She says, my salon hit a low when we were still within our first few years of opening.

And we had a stylist in the salon that just did not fit the salon vibe.

So again, when she says did not fit the salon vibe, often it’s like we have this mental picture of who goes here, like who fits here.

But if it’s not formalized, it’s not enforceable.

And when she says they just didn’t fit the vibe, I wonder like, what did that look like?

Did she have core values?

Did she have a screening process for who was coming into the building?

We don’t know, right?

But this person just wasn’t a right fit, but they were allowed to stay.

The atmosphere that was unintentionally created with her around was awful for us, stylists and for the clients.

As an owner, the amount of stress I had from the situation made me want to throw in the towel many times.

I unintentionally allowed this person to create rifts between my business partner and I.

I had to deal with slander to clients, to coworkers and to the public.

I also had to face the harsh reality that this person who I thought was a friend actually was not.

Y’all, this was this person’s friend.

I say this because this happens a lot.

It’s so funny, business is the most difficult relationship you’ll ever have with anybody because it’s a person’s livelihood that you could potentially be messing with.

So, this is somebody who was a friend who became a total toxic culture bomber in her salon, but she was stuck with this person.

She says, it was so long ago.

I remember the feelings of betrayal and feeling unsure of how to deal with the situation.

At the time, we were within our first two or three years of being open, so we weren’t super financially stable yet.

I remember when I started to realize this person was behaving in questionable ways, that I felt incredibly conflicted because on one hand, her behavior and the dynamic in the salon was awful, but I did not think we could afford to have her leave.

We’re going to dig into that a lot today.

I remember feeling terrified at the financial implications of her potentially leaving for a time on her accord.

I also remember the incredible stress that came with the idea of asking someone to leave.

No one talks about how easy it is to say, I’ll do what I have to do to protect my business.

But the reality is, when you create a relationship with someone, letting them go is incredibly hard, at least it was for me, and I will attest to that.

I shared on the podcast really recently.

I have let go of dozens.

I think it’s over 60.

My count is really high.

I’ve done a lot of terminations at this point.

They never stop hurting, because you know you’re screwing up somebody’s life, and it’s just, it’s not a normal human reaction, so yes, if you’re a good human, it will always be difficult.

I also remember how distressing and heartbreaking it was every time I learned more about this person slandering our business, and my business partner and I’s characters, to both our stylist and to people in the community.

Can you imagine keeping somebody in your building who’s talking badly about you?

And some of you are like, oh my gosh, I would never.

Some of you need to realize your employees are already talking badly about you in the break room.

Maybe it hasn’t become public slander yet, but the conversations could still be happening within your four walls.

Here’s where it gets interesting.

She says, there’s many things I regret during that time as a new salon owner, but the thing I regret the most is at one point, word got back to us that the person wanted to leave and start her own salon to try and take some of our stylists with her.

Out of fear for the salon’s financial stability, we decided to add a non-compete.

It’s a huge mistake.

She realizes that was a huge mistake now, too.

So many of us as business owners do this.

Instead of doing what needs to be done, which what needed to be done is that stylist needed to be fired, but instead of doing that, we put in more structure and we put in more rules and more rigidity and more bylines and more legal blah blah whatever, and you create this messy business, which a non-compete is terrible for culture.

Now they’re working their way out.

I think they are fully illegal and most states are on their way out, whatever.

Thank goodness, we never should have had non-competes.

All non-competes do is trap miserable people in your building.

There’s nothing good that’s going to come of it.

Good news, the salon owner turned it around though, and she says, we were able to turn things around by realizing that the money from this person or the financial stability they were providing was not worth the environment we all had collectively and unintentionally created by having her in the building.

Financially, things were tight for a while, but the stress that was eliminated was well worth being temporarily strapped.

Also, after parting ways with this person, we were able to grow into a salon we had dreamed of, but didn’t actually think would be possible in our tiny town.

We were able to really hone in on our mission and values and vibe.

And that’s when we started to attract like-minded stylists who have been a dream to work with every single day.

So a couple of things went wrong here.

We put a bunch of guidelines in place thinking it was going to make people behave better.

That’s never going to work.

Structure is important, but it has to be the right structure.

And enforcement of the structure is the most important thing.

If we’re not willing to have the hard conversations, the structure hardly matters, right?

Okay, so knowing that the five things that the most successful salons they are doing, which is right systems and structure, branding first, marketing second, creating an unbeatable salon environment to work in and paying their team members really well.

All of that sounds great on paper.

And everybody’s like, oh my gosh, I love that.

And all the stylists are like, yeah, just do that.

But let’s talk about the issues and why a lot of salons can’t pull that off.

First things first, most salons don’t have an annual budget with a plan for profit.

This is something I didn’t realize until I really was in salons working with teams, as I’d say, let me see your annual budget.

And they would pull out like profit and loss statements of like what had happened last month or like, oh, well, Suzy’s doing this this month, so she tracks like this this year.

But there’s no what you should do in business is sit down every year and make a projection and say, OK, we’re projecting.

And by the way, a projection is an educated guess.

But it becomes your financial north star of what actions need to happen in the business to make that dream a reality.

Without that, business is terrifying because you’re making all you’re pulling all these financial triggers and you’re making up compensation plans truly based on nothing.

So you create the annual breakdown of how much you intend to make, how much you intend to spend.

And then this is where the rubber meets the road, is you as the business owner have to stick to it.

If you’re not bringing in the revenue you need to bring in, something has to change.

I’ve had this conversation with the leaders in my team many times.

They’ll say, this is our least favorite question.

But if we’re pacing behind goal, which we have always been able to correct by your end, but I always put it on the spot and I say, listen, we’re pacing behind goal.

What do you want to do?

Improve marketing or cut expenses?

What do you think they vote for every time?

Improve marketing.

Nobody likes to cut expenses.

Okay, so then it’s a good call to action for everybody on the team of like, we need to put our pedal to the metal and figure out this marketing thing because we’re pacing behind in revenue.

But you can’t have those good conversations with yourself or with your team if you don’t know what pacing behind looks like.

If there is no financial projection for the year, you don’t know how much you can pay people.

You have no idea how many guests you need coming in every single month to make that happen because you’re just hope and pray running a business, right?

So first things first, we need to have an annual budget with a plan for profit.

Profit should be built in from the start.

I know what our business’ profit goal is by the end of December, the year before.

You should too, okay?

Number two, bad compensation systems.

A bad compensation system makes everybody miserable.

Your high performers are miserable, your low performers are miserable, you as the owner is miserable, like ain’t nobody happy.

And a bad compensation system, yet most of us are running one.

And most of us are running one, because we don’t know what else to do.

So when I evaluate Salon’s compensation system, the most common Achilles heel I see is overpaying low revenue producers and underpaying high revenue producers.

And you know why we do it?

Because we’re stuck in the mentality of, well, my compensation program has to be strong enough that people will want to work for me.

Worry about the ones who are thinking about leaving you, not attracting the new ones.

Like go back to our stylist mentality.

We slip away from that sometimes.

Would you rather have a business where the goal is you need lots of new people all the time or a business where your ride or dies are so consistent that they would never think about leaving because it’s too good where they’re at?

Like that’s what we want our clientele to look like.

That’s what we should want our stylist team to look like, too.

I had a very interesting conversation with an owner the other day, and it was so real because this mentality is so the mentality.

I was talking about uncapped commissions and the logic of it.

And this owner was saying, the reason I don’t uncap commissions is I have to pour so much financially into my team to grow a stylist.

It’s got to pay off for me at some point.

And I so, I so got it.

Like I got where that ideology was come from.

The challenge with capped commissions is, yes, I do believe that once the owner has poured into a team member, it should come back around.

Like I don’t believe in bleeding owners dry.

If all the owners in the building have no money, no one’s going to own a salon.

It’s not a viable business model.

I get that.

But there’s a point where the owner’s good.

The owner’s been taken care of.

The stylist is a high producer.

The revenue is coming in.

So when does the stylist get theirs?

Cause you’ve already gotten yours.

So what point did they get theirs?

Like you just keep getting yours.

And like for years and years and years and years and years after they have already basically paid back that initial debt, when do they get theirs?

And you know, I see like profit share plans.

Oh, profit share.

And it’s like, oh, our highest performers shared, you know, 10% of profit.

And it’s like, think about what that says to them.

You’re our highest performer.

I’m going to keep 90% of the profit and give you 10, which, you know, when you split it amongst a team, it ends up not being that much.

And it can send the wrong message.

So I want to just talk about the way that we look at compensation, just to give you a different perspective.

And I want to use real numbers.

So the way that we look at compensation is making sure we understand the break even for every chair in the building.

It’s almost like a hybrid between how a booth renter operates and how an employee based salon operates, which is why this overcomes the objection.

How many of you are commissioned salon owners and you’re like, well, eventually a stylist realizes they can make more money renting a booth, so they might as well go do that.

Why don’t you just create a system where they don’t have to?

I just don’t understand.

I truly don’t understand.

If we have a system, which the way we coach to our system, it’s now called the Performance Impact Method.

The stylist is always going to make 70 percent or more of profit, and the salon will make 30 percent of profit or less.

The stylist always makes the most.

What we do is we figure out the break even for every chair, and we have a new calculator and a system and a formula that does that for you.

And then we factor in additional product costs used as the stylist scales.

So for example, if a stylist is doing $60,000 in services behind the chair, let’s see that the base even break line that the calculator gives us is $1,000 per month for this person, they’d be producing $48,000 in profit to the business annually.

They would keep 70 percent of the profit, and the owner would get 30 percent of the profit, okay?

Now, the way that our system works is the scale stays the same.

For as long as the stylus grows.

So when that stylus goes from 60K a year to, let’s say, 175K a year in services, it’s the same 70-30 split, but it pushes the metrics of what a traditional commission split would look like.

So this is how commissions become uncapped.

So let’s say this stylus is doing 175K a year in services, but now their baseline is more like $1,500 a month.

That’s their break even.

It’s gone up a little bit because they’re using more product and whatever.

So their baseline is now $1,500 a month.

So they are making $157,000 in profit for the salon in a year.

So it’s the same 70-30 split.

Now that stylus is taking home $109,000 a year in commissions, which is over a 60% traditional commission split.

So it still follows our 70-30 model because it’s of the profit, not of the raw.

And with that, the stylus is able to make commissions into infinity.

The salon is still making more money.

When they grow, you grow.

It’s truly partnership.

Like it is the most equitable form of compensation you can have.

So to that salon owner who said to me, you know, at some point, it’s kind of got to come back around.

That’s because most salon owners are overpaying.

They’re low performers and your top performers are making up for it.

And it’s a recipe for resentment.

If you’ve ever talked to somebody who knows that they do more or produce more than other stylists in the building, and yet they are stuck at a place where they can’t make more money, and you have a real conversation with them, they are bitter.

And then you wonder why high performers choose to rent.

And you’re like, well, it’s never going to be like it is here.

And it’s like, yeah, they didn’t want to have to go.

They wanted to stay, but they had reached a point where you weren’t going to pay them anymore.

Maybe they had to do things that they didn’t want to do in order to grow to where they needed to be.

I want you to look at the profit centers of all of your stylists and really think about what it would take to have a team of high performers all doing well, all growing.

We have a really cool bonus structure that we are implementing in our new leadership program update that really promotes fast growth.

And it benefits everybody when somebody is growing really, really fast.

So I understand the temptation for the owner to be like, well, at some point, I have to get mine.

I get it.

But why can’t you be getting yours all along by compensating appropriately from the jump and then keeping your highest performers happy?

That to me makes the most logical sense.

So I do want to take a moment to talk about nonprofit retail programs, because I think that’s another big revenue suck.

So one of the things that we implemented into the new Thriving Leadership Program is we talk about rethinking retail commissions.

So I want to run some of the math we demonstrate.

This is going to be a really mathy part of the podcast.

So just go with me on this.

If you get into the new Thriving Leadership, you’ll see it all play out on slides.

But just listen up, ears open for a second.

So let’s say a salon invests $500 in retail to sell.

The retail is priced at $1,000, right?

Keystone markup.

You invest $500, you sell it for $1,000.

Imagine all retail is sold.

You sell through everything, which we know never happens.

But let’s imagine this is perfect case scenario.

You sell through everything, all retail is sold.

So generally, there’s a commission giving to the stylist.

Let’s say that they’re given 20% of sales.

Even if they were given 10%, this math is still gonna blow your mind.

It doesn’t matter.

But in this example, we’re gonna say 20.

So you pay out $200 in commissions to the stylist who sold it.

The salon is left with 800 bucks.

Of that 800, 500 has to be used to pay back the initial investment of that retail, right?

So the salon is left with $300 in profit, right?

But most coaching systems out there suggest you use a restock budget of 52%.

So now on this next reorder, instead of buying $500 worth of retail, you buy $520 worth of retail, okay?

But let’s say you sell through it again.

So now you’ve sold just over $1,000 in retail, $1,040, you pay $210 in commission, salon is left with $830, $200 is used to pay back the debt, $630 is left as your salon profit.

Again, you use that 52% markup.

So now you’ve spent $540 to restock the shelves, you’ve sold again over $1,000, you’re paying out $216 in commissions, the salon is $864 in profit plus $90 in profit from the previous season.

But then you use 52% and you go back and you spend another $560 to restock the shelves.

So after this cycle, which I know I went through really quickly, we have it on slides in the program, your salon has sold $3,120 in retail and the owner has made $364.

This is the piece I don’t think it’s talked about enough.

So if you sold through everything, there was no dead retail on the shelves at all, it was all sold through, it was all good, you paid out commissions to your team, you sold $3,000, the salon owner made $364.

So if you’re a salon, it’s like well, we do $36,000 a year in retail sales, you are making $4,000 on the back end of that.

It’s just so minimal for the effort that you put in.

I’m not saying retail is bad, I still like retail in salons.

My concern is I don’t know that it’s commissionable to your team.

And I think that we look at retail differently, retail equals revenue, retail equals retention.

I think there are cool bonus things you can do around retail for your team.

I don’t know that the margin is there.

And when we talk about financial pitfalls for salons, mismanagement of retail and not understanding the numbers is a huge piece of that, right?

Next we have lack of growth strategy.

So a lot of owners are like, I don’t want to do that marketing stuff, my stylist should do it for themselves.

You have to be doing it.

If you were to talk to any business coach or consultant in any other industry, they’re going to say marketing is your lifeblood.

Like you have to have marketing and you can’t just do your best.

You have to really understand what you’re doing as a salon owner.

So many owners are afraid to leave the chair, like they’re afraid to step away from their clients.

I would argue you should be afraid to stay.

The more hours you spend behind the chair working with your clients, the less time you’re able to pour into the business.

You have to be filling the Stylist chairs with clients.

You have to be.

That’s how you’re going to retain a team.

That’s how you’re going to grow demand.

You have to do it.

Next, we have emotional decision making.

Being afraid to let people down or being afraid to make hard choices or let people go is going to massively hold you back as the salon owner.

Lastly, I think the big mistake that a lot of salon owners make is being stuck in their own ways.

I talk to a lot of owners, the ones who in particular, I end up having to say like, I don’t think they’re ready for coaching.

This is something people maybe don’t understand as well.

I get a lot of requests from more high-performance salons, asking me to one-on-one coach them.

There’s always a bit of a vetting process I go through, and the majority, at least from my perspective, aren’t coachable because they’ve decided how they want things to go, and they want me to validate their point of view.

I can’t do that, especially if it’s a salon that is not doing well.

Validating their point of view is the most irrational, irresponsible thing I could do.

And you know what’s funny is there’s some salon owners who are happy to pay a coach to just validate them.

And a coach who doesn’t have good morals and values would take that cash and validate that person.

I see it happen all the time, all the time that’s happening.

It is very common that owners aren’t coachable because they just wish it were different.

And so for me, if an owner is going to argue a point against me, I’m happy to just say, you know what, you’re right.

You’re right.

It’s working for you.

Just do it.

And maybe they are right.

Maybe it’s working for them and they should just do it.

If you are happy with where your business is, don’t change a damn thing.

Like if it’s not broke, don’t fix it.

If there’s anything in your business that you’re like, I don’t know, like, is this the best it can be?

Are we really achieving at the rate that we could be, should be?

It’s just an opportunity to get curious.

Some of the big misfires as far as being stuck in their old ways that I see from a lot of owners, it’s a tight grip on scheduling, a tight grip on client records.

Like, oh, our, you know, our stylists aren’t allowed to see their client records.

Y’all Instagram really ruin that for you.

Like if a client wants to get a hold of a stylist, they will.

I’m this person.

I have under the table handshakes with several service providers where I’ll say to them, here’s my number.

If you go anywhere, you tell me.

Like if you don’t think that’s happening, you’re naive.

And or that connection on social media, like preserving the client’s information.

I’m not sure what we’re preserving for at this point because we’re all so overexposed.

In 1996, that worked.

Right now, I just don’t know that it’s even viable.

Judgments on time off.

I hear from stylists all the time, like my salon owner gives me a hard time for taking too much time off.

There’s a couple of simple solutions to that.

One, have a policy about it.

Two, I personally believe in unlimited unpaid time off, which is what we have here.

People can take as much time off as they want to.

I can only afford to pay you so much PTO, but you can take whatever time off you need.

That’s life, man.

But when there’s judgment of like, oh, so-and-so is going on vacation again.

Are you jealous?

Or why are you making a comment on that?

If there’s no policy, there should be no conversation.

We should just celebrate that person for enjoying the life that they have.

I think that’s a huge misfire and a misunderstanding.

And I think a lot of owners just miss the simplicity of the glory days.

And I can deeply empathize with that because business did used to be a lot easier.

And let me tell you something, salon owners of the 90s were raking in cash like crazy.

If you look at the lifestyle successful salon owners of the 90s were living, they were making money hand over fist.

It’s just a different time.

And I know it would be great to go back to 1994 as a salon owner.

We can’t.

We’re in 2025.

It’s never going to happen.

And so I want everyone to just realize and recognize we have to build business forward.

We have to get a grip on our financials, even if it feels yucky, even if you don’t like math, even if you didn’t get into this to run the numbers.

Owners have to prioritize marketing, even if you hate it too bad.

That’s what business ownership looks like.

So going back to the top, I think we unpacked a lot of the blind spots and pitfalls.

But your order of operations is implementing the right systems and structure, putting branding first, putting marketing second, creating an unbeatable salon environment to work in, and paying your team members really well.

If you can figure out those things, you’ll be unbeatable.

So much love, happy business building, and I’ll see you on the next one.