Why Quick-Fix Decisions Can Wreck Your Salon or Spa
Quick-fixes are often never fixes at all.
How, you ask?
Here are three examples I've recently run across...
A salon owner calls asking for help to comply with California's new AB 1513 law requiring that employees be paid for down time and rest time. That was Friday.
By the time we talked that Monday, the owner says, "I fixed the problem. Over the weekend, I put all employees on booth rental." Wrong!
- What his quick-fix actually did was slash his salon's revenue capability, wrecked its culture and gave away his company's most valuable asset ... its customer list.
- Converting to booth rental, or any other compensation system, does not eliminate the part California AB 1513 that requires "piece-rate" businesses (California's Department of Labor has always classified salon/spa commission as piece rate) to pay employees for down time and rest time going back to 2012.
An owner hears me do a presentation on Team-Based Pay (TBP) and gets excited over what it can do for the future of her salon/spa. She keeps asking me how to calculate an employee's pay from commission to TBP. I could see her entrepreneurial quick-fix seizure getting ready to flip the switch from commission to TBP. Wrong!
- Without the proper training and preparation, this owner would simply convert from commission to hourly pay ... not TBP. This is the equivalent of putting diesel fuel in your car’s gas tank. The gas engine won’t work.
- TBP isn’t a pay conversion calculation or Excel file. It is a complete business model comprised of many systems and leadership disciplines. RELATED: Download our Team-Based Pay White Paper report here.
An owner is seriously tight for cash and getting behind on bills and payroll taxes. His quick-fix is to do credit card receipt financing. This is different than credit card cash advances. (Besides, his credit cards were already maxed out.) This is borrowing money on future credit card receipts. Wrong!
- Cash flow was already bad. The credit card receipt financing was only enough to catch up on payroll taxes and rent.
- Fees can range from 15% to 80% APR of the amount financed.
- The funding provider takes a fixed percentage of credit card revenues each day until the loan is settled.
- With the funding provider taking daily payments before credit card settlements hit his bank account ... cash flow is even worse.
- The owner’s financial woes only get worse because the quick-fix never addressed the real problem of paying commission rates that are too high and the uncontrolled spending.
The common thread in these three real-life examples is the entrepreneurial tendency to use a quick-fix without understanding what caused the problems in the first place or the consequences that may follow the quick-fix.
Here are my SIX No-Compromise Leadership strategies to avoid the quick-fix trap:
- Understand it: Quick-fix decisions are reactionary. The intent is to make whatever the ugliness is just go away. In business, ugly problems just don’t go away. Throwing a quick-fix at a problem is like putting a fresh coat of paint on a wall infested with termites. The first step is to take a deep breath and take the quick-fix option off the table. Examine the potential causes until you can isolate the real problem. It’s what caused the “real problem” that needs to be fixed ... not the outcome. Find and eliminate the termites before painting that wall.
- Accept and own it: Once you understand the direct cause of the problem, the toughest part is to accept that it happened on your watch ... or that you were the direct cause. Accepting it is about getting “real” and owning your contribution to the problem. Note: As the leader, directly or indirectly, you will always own a piece of every problem. Yes, there are times when accepting and owning it won’t feel good. It’s almost impossible to thoroughly fix a problem or implement change when the source is stuck in denial.
- Plan it: Planning avoids getting stuck in the quick-fix quagmire. Designing the best solution begins with defining the desired outcome you want to achieve. Using the three owner scenarios above, the solution to being compliant with California AB 1513 is not to go booth rental ... but to install a comprehensive pay system that will benefit the business and its employees long-term. The solution to implementing TBP is not doing pay calculations and hitting the launch button ... but to learn and implement all of the required systems and leadership responsibilities that make the TBP model truly powerful. The solution to a cash crisis is not to finance your credit card receipts ... but to learn proper cash-flow management and budgeting. The plan even addresses the potential “what-ifs” that may go wrong. A quick-fix is based on hope. A well-planned solution is based on research and a logical step-by-step procedure.
- Implement it: With the plan to guide you, the implementation of any solution always goes much smoother. Every plan has a desired destination ... and it’s that destination (or solution) that must be relentlessly communicated to every team member. Change always rocks the boat ... and that rocking needs to make sense to all those affected. Relentless communication and information flow is non-negotiable. Monitoring progress and updating the team is non-negotiable. Adjusting and fine-tuning will always need to be done to keep the plan on course. Stay the course and never assume anything is fixed until the results prove it.
- Stick with it: Quick-fix solutions rarely make it across the finish line. Why? Because owners turn to quick-fixes because they’re either reluctant to do the work or are just willing to try anything. Likewise, if you did the research and built a solid plan ... by design you avoided the quick-fix. Stick to the plan. Push it across the finish line. Embrace the new behaviors, thinking and systems your plan requires. This is the toughest part of making a solution work. Be the No-Compromise Leader your business and your employees need you to be.
- Learn from it: Every business experiences setbacks and a disaster or two on the way to success. Learn from those behaviors and mistakes that took your business to that undesirable place. Remember how bad it felt and how much effort it took to get out of a mess. Appreciate and protect the positive cash flow and culture that represents your salon/spa today. Leave the quick-fixes to the less enlightened that don’t want to do the work that true success demands.
Here’s my challenge to you: If you hear the call of the “quick-fix” ... avoid it. If you feel yourself falling in love with an idea or concept that has you ready to hit the launch button ... snap out of it. No matter what you hear or think ... the quick-fix is, and always will be, a trap.
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