Being the Owner of an Employee-Based Salon or Spa

Why would someone get so excited about starting a salon/spa business knowing that the failure rate is high, staff walkouts are commonplace, and the stress level can often be unbearable?

The following insights begin to answer the question why someone chooses to become a salon/spa owner:

There’s something about the entrepreneurial spirit that is fearless.

There’s something about having a powerful vision for your business that it becomes a part of you.

There’s something about creating and growing your own team and creating a culture that embodies your vision, beliefs and standards.

There’s something about creating career growth opportunities for others.

There’s something about being in control of your own destiny.

After the doors open, the reality of what an owner truly bought into comes to light.

There will be good times and bad.

Leading creative people can be both exhilarating and exhausting.

Creating profit and positive cash flow is easier to talk about than achieve.

There’s a fine line between growing talent and growing your competition.

Recruitment and employee turnover can be brutally tough.

Devolving from “build it and they will come” to “build them and they will leave.”

It’s sad to see employee-based salon/spa owners so frustrated and beaten up by employee turnover, surrender to booth rental — or close.

The traditional commission business model is built around individual clientele building and therefore prone to turnover, especially the busiest and most productive service providers.

The Team-Based Pay business model is non-commission and about building a brand and creating opportunities based on overall individual and team performance.

Growing an employee-based salon/spa business today is more complex than ever. Suites, booth rental and the “independent” factor feed on employee-based salons.

Owners are often painted as money grubbers and mini-dictators.

Many independents view working in an employee-based salon as a means to get training, experience and to build a clientele to take with them.

Now that I’ve given you the good and the bad stuff, I want to give you my No-Compromise Leadership insights on what being an owner of an employee-based salon/spa is truly about:

It’s about building a company and brand: The salon/spa business was never about filling chairs and treatment rooms with “busy” service providers. That’s what created the industry dysfunction and reputation for high turnover. The brand and reputation of the company is what attracts and retains clients, not the popularity of specific individuals.

It’s about creating something of value: Why become an owner to have the financial life sucked out of you? Why become an owner to “buy yourself a job” and a place to do “your” clients? Becoming a salon/spa owner is about taking your investment in your vision and turning it into a valuable asset. The only reason salons/spas have such a dismal resale value is because “the business” was poorly designed and it’s Balance Sheet says it’s Liabilities exceed its Assets. Design it right, systematize it right, lead it right and build a healthy Balance Sheet and you will have a valuable asset when you’re ready sell.

It’s about culture: Creating a powerful and empowering business culture requires a massive amount of work. Your culture should be meticulously designed, managed and protected. Too many salons and spas morph into their present day cultures. Morphed cultures are inefficient, resistant to change and crumble under pressure. As the owner of a salon/spa, your focus and attention must be on culture building. You can’t do that standing behind the chair, in a treatment room or sitting in an office.

It’s about building careers: There is no greater feeling than seeing a young talent mature and grow into a contributor to company growth. Skill and customer service training is mandatory. (Mandatory means employees must be compensated for time in training.) Excelling in technical skill and servicing clients feeds that special passion our industry is known for. There are many leadership opportunities a successful salon/spa can offer in technical training, customer service, operations, employee development, financial and more.

It’s about reinvesting: Profit is a good thing for owners and employees. Profit doesn’t mean the owner takes it all home. Profit allows for reinvesting in the company, facility, equipment, technology and more. Profit also allows investment in your people. There is amazing profit potential at salons/spas — if you learn the leadership and financial skills to create it. When your culture, and your team, are aligned to the disciplines of creating profit, company growth opportunities reveal themselves.

It’s about creating income security: The “I only want to pay you if your hands are generating money” is pure commission thinking for owners and employees alike. If you’ve been paying attention to the new labor laws in California, it’s easy to see the trend that employees must be compensated for down time and breaks. Simply put, if employees are required to be at work, whether servicing clients or not, they must be compensated. Income security has been close to non-existent in the salon/spa industry. The days of feast or famine for owners and employees must and can end. Manage your payroll costs, drive productivity and pay employees fairly for their skill, overall performance and contribution to growth.

It’s about delivering Team-Based Excellence: I’ll keep repeating Team-Based Excellence until owners and their teams get it and live it. At salons/spas, excellence is an outcome of systems and teamwork. Every element of the customer service experience must be orchestrated throughout the entire visit. “Our client” must replace “my client” thinking. When it does, your salon/spa business will be everything you envisioned and all the bullet points above can be checked off.

It’s about being everything that rental and suites cannot be: This is Strategies battle cry for all employee-based salons/spas. Booth rental and suites, by design and law, cannot be controlled or managed in any way. Employee-based salons/spas have a powerful competitive advantage — if you learn how to implement, systematize, lead and inspire it. Doing so will make booth rental and suites an insignificant trend.

Here’s my challenge to you: Embrace the opportunity of owning an employee-based salon/spa. Being frustrated and stressed will show in your leadership. More importantly, stress is bad for your health and quality of life.

Make the changes necessary to check off every bullet point in this blog post.

If something in your business isn’t working (like a system, problem employee, expense, etc.) it won’t get better until you address it and fix it.

If your culture is contaminated in any way, it will show up in your critical numbers. It’s time for a culture shift to get you and your company back on the right track.