Chapter 32

The Salon Business

Weymouth.ac.uk

• Being both a great artist and a successful business person=

The greater you chances of success

• Entire books have been written

• Following information is a general overview

• Become your own boss:

Owning your own salon

• Booth rental-not legal in PA. See “Did you know?”

Beautyschoolsdirectory.com

Salonbootcamp.com

Discoveryspas.com

Opening your Own Salon

•Huge undertaking

*financially

*physically

*mentally

•Face challenges that are complex and unfamiliar

Kqtv.cityvoter.com

Thehairem.biz

• before opening your doors decide:

*what products to carry

*what types of marketing and promotions

*best methods and philosophy for running the business

*whom to hire

• Consider the following basic issues and perform basic tasks

Create a Vision and Mission Statement for the Business Goals

Vision Statement: long-term picture of what the business is to become and what it will look like when it gets there

Mission Statement: description of the key strategic influences of the business

*market it will serve*services it will offer*quality of those services

Goals: set of benchmarks that help you to realize your mission and your vision

•Set short-term and long-term goals for the business

Create a Business Timeline

Year One:

*determine and complete all aspects of starting the business

Years Two-Five:

*tending to the business, its clientele, employees for growing and expanding

Years Five-Ten-if successfully achieved:

*Add more locations* expand the scope of the

business *construction of larger space

Years Eleven to Twenty:*move from being a working cosmetologist into a full-time

manager

Years Twenty Onward: *consider selling or

*changing it in some way (junior partner)

Garysplacesalons.com

                                              

Kristirushing.com

Brightonlife.com

B2salon.com

Determining Business Feasibility

•Means addressing certain practical issues

*do you have a special skill or talent?

(sets your salon apart)

*does the town offer the type of clientele you want (products and services you want to offer)?

*how much money is needed to open?

*is funding available?

Choose a Business Name

The name:

*explains what it is

*identify characteristics (sets apart)

*influences how clients perceive the business

*creates a picture in client’s mind

Colourtube.com

Behindthechair.com

Choose a Location

•Good visibility

•High traffic

•Easy access

•Sufficient parking

•Handicap access

Written Agreements

•Many written agreements and documents needed

*leases*vendor contracts*employee contracts*and more

• For legal purposes*who does what*what is given in return

•Must be able to read and understand them

Business Plan

•written description of your business

~today

~future

•Agreement with yourself-not legally binding

•However, needed to obtain financing

Blogs.nailsmag.com

Look at printed business plan document from Epiphany Salon

Includes description:

~business

~services provided

~demographics

*race, age, income, educational

attainment

~salaries and benefits

~pricing structure

Interstellar-solutions.co.uk

•Expenses

~equipment ~ supplies

~ repairs ~ advertising

~taxes ~insurances

~projected income and overhead expenses

Business Regulations Laws

comply with all local, state, and federal regulations and laws

•contact local authorities

~business licenses

~other regulations

*zoning

*business inspections

• Comply with all federal Occupational Safety and Health Administration (OSHA)

• Manufacturer’s Safety Data Sheets(MSDS)

Insurance

•must purchase insurance

~malpractice

~property liability

~ fire

~burglary

~ theft

~business interruption

•disabilities policy

                              

Safety manual.com

Oemeyer.com

Salon Operation•Running of the business

Record Keeping•Maintain accurate and complete records of all financial activities

Salon Policies•Rules and regulations•Everyone is treated fairly and consistently

Types of Salon Owners

Individual ownership:

•Make your own rules

•Meet all duties and obligations of running a business

•Sole proprietor is the owner and manager

•determines policies

•assumes expenses

• receives profits/bears all lossesBlogs.nailsmag.com

Salonsachet.com

Socialmiami.com

Partnership

•more opportunity for increase investment

~growth

•can be magical or a disastrous

Ex. Urban Edge

John Paul Mitchell Systems

Partnership:

•Two or more people (not always equal)

~more capital or money

~pool skills and talents

~share work

~responsibilities

~decision-making

~must assume one another’s liability or debts

John Paul DeJoria

Paul Mitchell

Paul mitchell.com

Urbanedge.boomtime.com

Corporation: ownership controlled by one or more stockholders

•Incorporating

*protects your personal assets

*saves money in taxes

*greater business flexibility

*makes raising capitol easier

Characteristics of corporations:

•Raise capitol by issuing stock certificates or shares

•Stockholders-has ownership interest

•Sole stockholder or many stockholders

• Meetings required to maintain corporate status

• Income tax is limited to the salary you draw-not the profits

• Costs more to set up*formation fees*filing fees*annual state fees

• Required to pay unemployment insurance taxes on salary (sole proprietor or partner do not)

Ex.

Great Clips

Haircuttery

Strmsigns.com

Haircuttery.com

http://bethlehem.patch.com/listings/holiday-hair-7#photo-2225893

Franchise Ownership

•Contractual relationship

•Operating under the franchisor’s trade name in exchange for a fee

•Under the franchisor’s guidance and stipulations

Advantages:

•Known name and brand recognition

•Franchisor does most of the marketing

•Protected territories

Concerns:

•Agreements in what you can and cannot do

•Be sure to research

•Have a attorney read the contract/explain

•Must pay the fee (successful or not)

clickedbmx.comthelifeofrylie.com

Business Plan

Includes:• Executive Summary•Vision Statement•Mission Statement•Organizational Plan•Marketing Plan•Financial Documents•Supporting Documents•Salon Policies

Purchasing an Established Salon

•excellent opportunity/look at all sides of the picture

•Seek professional assistance from an accountant and a business lawyer

Agreement should include:

•Financial audit*actual value of the business*may not retain all of the former owner’s clients without help from former owner

•written purchase

•sale agreement

• complete and signed statement of inventory

~value of each article

• initiate an investigation

~default in the payments of debt

• identity of owner

• Use of name and reputation for a definite period of time

• Disclosure of all information ~clientele

~purchasing

~service habits

• Disclosure of conditions of the facility

• Noncompete agreement- seller will not work in or establish a new salon within a specific distance

• Employee agreement-will the employees stay with the business

Drawing up a Lease

•your own business

~not always the building

•Rent or Lease-specify clearly

~who owns what

~who is responsible for repairs and expenses

Secure the following:

•exemption of fixtures or appliances

~can be removed without violating the lease

•agreement about necessary renovations and repairs

•option to allow you to assign the lease to another person

Protection Against Fire, Theft, and Lawsuits

•Have adequate locks

•Fire alarm system

•Burglar alarm system

Purchase:

~liability

~ fire

~malpractice

~burglary insurance

Professionalandliability.com

Saloninsurance.com

• all laws cosmetology

~safety and infection control codes/city/state

• keep accurate records of everything!!

• Ignorance of the law is no excuse for violating it

Business Operation

Need:

~excellent business sense

~ aptitude

~good judgment

~diplomacy

~sound business principles

~circle of contacts

*local entrepreneur group

*Chamber of Commerce

Quakertownalive.com

Smooth business management:

• Sufficient investment capital

• Efficiency of management

• Good business procedures

• Strong computer skills

• Cooperation between management and employees

• Trained and experienced personnel

• Pricing of services

Review price list “starting at”

Review expenses chart (next page)

Mojazzhair.com

Paulzoom.com

Allocation of money

•know where your money is being spent

•accountant and accounting systems are indispensable

Business-services.upenn.edu

Tutorsonnet.com

The Importance of Record Keeping

•simple and efficient record system

•necessary regarding taxes and employees

•record all income and expenses

•retain check stubs, cancelled checks, receipts, and invoices

Appliance-repair.org

Webdatamation.com

Scottstadel.com

Knowfree.net

Purchase and Inventory Records

•help maintain inventory

~ preventing overstock

~shortage of supplies

•alerts you to theft

•shows net worth

•keep running inventory

~use and retail value

•used daily

~consumption supplies

•sold to clients

~retail supplies

Service Records

•keep client cards

~treatments given

~merchandise sold

Include:

name, address, date, fee charged, products used, results obtained, preferences and tastes

Operating a Successful Salon

take excellent care of your clients

physically attractive

well-organized

smoothly run

sparkling clean

Planning a Salon’s Layout

•best physical layout

~salon you envision

•maximum efficiency

•low-budget

~several stations

~small to medium sized reception area

~small retail area (clients may not have money to buy products)

•High-end salon or luxurious day spa

~ expect higher quality of the service

~matched by the environment

~more room in waiting areas

•coffee bars

•private areas for clients to conduct business (phone, laptop)

•retail area

~spacious

~ inviting

~well lit

•layout is crucial

•advice of an architect

•professional equipment and furniture supplier are good resources

• Create small salon or renovate existing space

• Keep plumbing in same area

• Electrical wiring up to code

• Get everything in writing from contractors, design firms, manufacturers, and architects

• Get more than one quote• It takes about 6 months for a new salon to

operate at full capacity-have $$$

Personnel

size of salon/size of staff

large salons require “specialists”

receptionists, hairstylists, nail technicians, shampoo persons, colorists, massage therapists, estheticians, hair removal specialists

smaller salons

~personnel perform more than one type of service

Interviewing potential employees:

level of skill

personal grooming

image as it relates to the salon

overall attitude

communication skills

good hiring decisions is crucial

bad hiring decisions

~ painful

~more complicated

Payroll and Employee Benefits

•successful business=everyone feels appreciated and happy

•share your success when financially feasible

meet your payroll obligations

offer benefits

schedule employee evaluations

create and stay with a tipping policy i.e. stylists tip assistants

put pay plan in writing

create incentives

~earn more money

~ prizes

~tickets

create salon policies and stick to them

Managing Personnel

•make a positive impact on lives and their ability to earn a living

•learn how to manage other people

•Learn what you can and cannot say when hiring, managing or firing

• Be familiar with civil rights laws*Equal Employment Opportunity

Commission (EEOC)*Americans with Disabilities Act (ADA)

• Have a written personnel policies and procedures manual

• Every employee must read and sign it

The Front Desk

• “operations center”

•employ professional receptionists ~handle the job of scheduling

appointments

~greeting clients

The Reception Area

•first impressions count

•attractive, appealing, and comfortable

~receptionist

~retail merchandise

~ phone system

~business cards

~displayed price list

The Receptionist

second in importance

Well-trained

first person the client sees

~pleasant

~ greet each client with a smile

~address each client by name

Tiffanyplacesalon.com

Efficient, friendly service fosters good will, confidence, and satisfaction

duties include:

~role of greeter

~answering the phone

~booking appointments

~inform the stylist client has arrived

~preparing daily appointment information

~recommending additional services

~through knowledge of retail products

~salesperson and information source for the clients

~straightens up the area

~maintains inventory

~daily reports

Booking Appointments

•most important

•make the most efficient use of everyone’s time

•client should not have to wait for a service

•stylist should not have to wait for the next client

•each person should know:*how to book appointment and how much time is

needed for each service

•pleasing voice and personality

• appearance that conveys salon image

•knowledge of various services

***all services, cost, and time they take

• unlimited patience with both clients and salon personnel

Appointment Book

• helps stylists arrange time to suit their clients’ needs

•computerized system

•actual hardcopy

Smartsalonmanagement.com

Use of Telephone in the Salon

•good habits and techniques increase business

•improve relationship with clients and suppliers

Good Planning

•Business calls to clients and suppliers

~quieter time of day

~quieter area

•pleasant voice

•use correct grammar

•speak clearly

•“smile”

•show interest or concern

•be polite, respectful, courteous

•be tactful

Incoming Telephone Calls

•lifeline of salon

Clients:

~call ahead for appointment

~call to cancel

~reschedule appointment

*use good manners

•“Good morning”

•Salon name

•“May I help you?”

•“Thank you”

•Answer phone promptly

If you do not have information…

~put client on hold

~get information

~offer to call back with info

•Do not talk to client in room while speaking with someone on the phone

Booking Appointments by Phone

•record full name, phone number, service booked

•confirm appointment one-two days before

•Be familiar with:

~services

~products

~costs

~what stylists perform specific services-color

correction

• be fair

**exception-requests

When client requests an unavailable stylist:

1. Suggest other times

2. Suggest another stylist

3. Put on cancellation list

Handling Complaints by Phone

•difficult task

•respond with self-control, tact and courtesy

•tone of voice sympathetic and reassuring and concerned

•try to resolve quickly and effectively

Building Your Business

•includes all activities that promote the salon favorably

•attract and hold the attention

•a satisfied client is the very best form of advertising

•develop a referral program

•hire a small local agency

•advertising budget should not exceed 3 percent of your gross income

•plan well in advance

•know what you are paying for

•get everything in writing

•know your clientele-which type of media they use

•what kind of messages attract them

Newspapers

*ads, coupons, coupon book

Direct mail

Classified advertising

*yellow pages

Yourhometownportal.com

e-mail newsletters/discount offers

Web site offerings

Giveaway promotional items

*combs, emery boards

Window display

*attracts attention

Radio

Television Allaboutjazz.com

Flikr.com

Springfieldnebraska.com

Acelham.co.uk

Maurohair.com

Community outreach

*public appearances, women’s and men’s clubs, church functions, political gatherings, charitable affairs, bridal fairs, fashion shows, radio and TV talk shows

Sierramadrenews.net

Fccc.edu

Client referrals

• In-salon videos

•Follow up every visit to determine client’s satisfaction

•Personally contact any client that has not been in the salon for more than eight weeks

Selling in the Salon

• financial success revolves around

~sale of additional salon services

~take-home/maintenance products

• adding services or retail sales

*means additional revenue

Smartfurniture.com

Merchantcircle.com

• Beauty professionals feel uncomfortable selling products and additional services

• Overcome this feeling

• Sales professionals make customer care their top priority

• Offer good advice

Etopa.com

Eqgroup.com

Seattlepi.nwsource.com

Amazon.com