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How One Salon/Spa Did a Complete Turnaround During the Shutdown
December 27, 2020 | By Neil Ducoff | No Comments
What exactly is a business turnaround?
The answer is simple: It’s when a business reengineers its systems, compensation, tipping policy, employee benefits, and pricing to pull itself out of the fiery pit of hell to operational and financial daylight.
In this blog post, we showcase the winner of the 2020 Team-Based Pay Turnaround Award, Kayla Bartholomay Nayas, owner of Enlightened Beauty in Fargo, ND.
How did your turnaround story begin?
Kayla: For too long, it was like we were dancing around the Fiery Pit of Hell, but after attending the 2019 Team-Based Pay Conference, my manager and I knew we had to make some major changes. In 2019, we made the commitment to attend the Strategies Incubator seminar in Connecticut.
I was running my company out of fear and scarcity. Last summer, one payroll left only $80 in the company’s checking account. I was terrified. I told myself I was clueless and didn’t know how to run a business.
I applied for a business line of credit and was denied. Then my mom was diagnosed with cancer. I was in a dark place, not knowing if I was going to lose the most important person in my life — and possibly the business I had worked so hard to build.
I finally muscled up the courage to visit a business lending company in our town that lent me just enough to get my manager and I to Connecticut to attend Incubator. That’s when everything changed.
Share what happened at Incubator.
Kayla: I’ve always been terrified about numbers. The second day of Incubator really gets into financials and building a cash-flow plan. I got so anxious, I had to step outside for some fresh air to avoid crying in class.
That’s when my Strategies coach, Michael Yost, told me to take a deep breath and continue working on my cash-flow plan. He added, “You can only cry if your cash-flow plan says you can.”
I completed my cash-flow plan and discovered we were better off than I thought. It was my wake-up call to realize that I was running my business financially blind and scared. Through Strategies coaching, I now have a toolbox of amazing tools to guide my decision making.
Even though I still have challenging times, Strategies gave me the confidence to keep on keeping on. And before I cry, I reach out to Michael now. I’m honored and so very grateful to have Strategies by my side to help guide me as I create financial freedom and a great life for my team members, future team members, and myself. A big “thank you” to the entire Strategies Team!
Describe the major changes you implemented during the shutdown last May.
Kayla: I was paying a sliding scale commission on services and retail. It was extremely hard keeping people motivated. We had a couple of part-time employees that treated it just like that. It was part-time work with a part-time mindset. We knew there had to be a better way to do things in our company. It has made me stand in my leadership and become a better leader for my team.
Here are the three major changes:
- We converted from commission to Team-Based Pay. Commission just wasn’t working for us because it was all about people building followings and not working together to grow the company. More importantly, our payroll was too high.
- We became a NO TIPPING salon/spa. As a business owner, I didn’t like being exposed to the taxes and penalties associated with unreported tip income. From a customer service standpoint, I didn’t like the position clients were in trying to figure out how to tip when multiple service providers took care of them. We used Strategies Pay Conversion Calculator and Cost-per-Hour spreadsheets to determine each employee’s new hourly pay rate, that included tip income, and revamped our service pricing to ensure costs and profit were covered.
- We now offer fully paid medical insurance. Being on Team-Based Pay, we were able to build the cost of medical insurance into our pricing and cash-flow plan.
From Kayla’s Strategies coach, Michael Yost:
They don’t differentiate between men/woman’s cuts and services. It’s all about time. However, they don’t advertise themselves as charging by the hour. We spent a TON of time on their cost-per-hour calculator preparing for when they returned to work. It was also all that work that allowed them to move to no tipping. Kayla totally reengineered her company — all while being 100% transparent at every level.
Describe your culture today.
Kayla: We are learning and growing every day as a team. The commitment I see within our company, by using Strategies system and tools, has been absolutely amazing. The team now sees what the company needs to grow. It’s much easier to grow as a team and feel motivated every day. We aren’t perfect, but we show up and try our best every single day, and to be better than yesterday.
Any final words of advice?
Kayla: By getting a solid grip on our finances and getting a new accountant, who will support our growth, we are getting better at profitability. We are working hard to become debt free.
As the owner, I’m an open book with my team. I make sure everyone knows where we are and where we can grow.
Do your research to find the right system and model for your salon/spa. Then commit 100% to implementing it and sticking with it.
I love the growth and the opportunities Strategies has offered us.