Advice for small salon owners

January 3, 2008

Running a small business is less fun than you think. I talk people out of opening salons all the time. When I explain to them the details of payroll, inventory, taxes and the like, all but the most determined think better of the idea. But many of you didn’t ask me before you started your salon. So if you are already in too deep to get out, here are some tips (from my workshop: Getting and Keeping the Clients You Want).

The average salon only keeps 30%-50% of the first time clients who walk through the door.

If you can control who comes in, you can significantly increase your odds!

  1. You need a website. The day has passed where you could put this off. I used to think I didn’t need one because, as a service business, I didn’t need to reach the whole world. The thing is, the people in your community want to be able to check you out anonymously and at odd hours. At the very least, give them some basic info: hours, prices, location, contact info, staff names, payments accepted, products you carry. You probably have a client who can do such things and would trade services with you. Put a note up on your mirror asking “Can you help us build a web page?”
  2. Our salon and our clients LOVE our online scheduling. It cuts down on phone calls and decreases the chances of no-shows (it sends a reminder the day before.) The one we use, Flash Appointments, is very affordable for small salons.  There is an interesting service I have read about, but not tried called Salon Service Central that can take the place of a receptionist.
  3. Every business has a personality. Does yours have a personality disorder? Don’t try to be all things to all people. Not everyone is your target client. I know you think you want anyone with a pulse and a credit card, but you will be much happier (and more successful) if you determine your business personality and embrace it. Azarra is the salon where you can wear your pajamas and cuss. What makes your salon different from the 300 other salons in your town?
  4. Don’t waste money on advertising your target client won’t see. If you are an upper-end salon, discounts and coupons that come in a bulk mailer are unlikely to appeal to your target market. We use CitySearch. It lets you set an advertising cap and we pay what we can afford. It allows clients to leave reviews and we get tons of new clients from it (way more than we ever got from our yellow pages ad which we have now dropped.)
  5. Build relationships with your vendors. They have tools to help you grow. Partner with the ones who can be the most help.
  6. Get an accountant you can trust and understand. It is crazy to think that you can keep up on all the tax rules. If you ever have a problem with a tax agency, you will be glad you have someone who can back you up.
  7. You do not want pissy clients. If a customer is pissy, give them back their money and send them on their way.
  8. Under-promise, over-deliver. Don’t promise the moon if you don’t think you can hit Mars.
  9. Detoxify the staff. Staff who sabotage your goals and vision will cost you more than you will ever make from them. Let them go. You know who is poisoning your environment. Get rid of them.
  10. Live your brand. Once you figure out who you are, be sure that all your materials reflect it. Business cards, menus, website and advertising should all be cohesive and should help prospective customers determine if you are the right salon for them. If you do a better job of appealing to only your target market, then you will be more likely to keep the clients you get.
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41 Responses to “Advice for small salon owners”

  1. Joan Says:

    I like your advice. I have owned my own business for a little more than 10 years but just recently started thinking about something I can do that will make me stand out a little more and be noticed. I have a client that might do a web page for me, I think that will be my next step! Thank you!

  2. Patty Says:

    Hello. I have owned my own salon for 19 years now and have noticed the processing fees from charges have been going up. Not due to the bank, but from the amazing use of charge cards and debit cards. My stylist work on a commission basis. I wanted to know if it would be wrong of me to charge them their own fees on their tips left on the charges.
    Thanks…..

    • ileana03 Says:

      hello patty,
      my name is melissa I. Nieves, and i am a student in the careers class at Eden Prairie High School. I am interested in persuing my careers as an owner of a salon, and i am searching for an opportunity to conduct an informational interview and job shadow. Would you be interested in helping me with this, or do you know someone whom i may contact?

  3. Aura Mae Says:

    Patty,
    I would do the math and have a very clear idea of how much money we are talking about before bringing it up to the staff.
    (An example: if the stylist gets $300 a week in tips, the bank charges of 4% are $12. Less of a big deal if you have three employees than if you have twenty.)
    Tips are a touchy issue with staff (and the IRS!) Are you running the tips through their payroll or do they declare them separately?
    Some salons are so cautious of running afoul with the IRS on the subject that they are not involved in the process at all. I have seen salons that have small envelopes available for customers to leave tips. There are some salons that have stopped taking tips all together.
    My salon is booth rental and since each stylist is running their own business, the banking fees are something they pay and write off on their taxes.
    All that being said, if you are paying more than 4%, get a new processor. Look at places like Costco that offer a discount on processing to their members.
    When I look at my total cost for the credit card processing, I look past the percentage rate they advertise and look at the total fees (monthly fees, rental of terminal, per swipe costs, etc) as a percentage of the total sales. They make it really hard to compare these rates (I think on purpose!) so I have to look at the big picture in order for it to make sense to me.
    Look at your last few statements. If you can switch to a company with lower fees overall, you could save more than enough to offset the fees you are paying on the tips and then you can be the good guy!
    The other part of the equation is making sure the staff knows that it cost to run the business. I have been guilty of this myself. The salon has to make o profit or it makes no sense to be open. If your costs are eating up your profit, then you are in trouble and so is the staff. If you keep them in the loop and don’t “nickel and dime” them, they will feel more a part of the team.
    Wow, that’s a long comment! Maybe this needs to be a whole new topic.
    Anyone have more questions?

    • Laurie Says:

      Have you used the square for credit card transactions?
      I am going to start accepting credit cards and wanted to get some feedback on charging my stylist for their clients using credit cards.
      Thanks, Laurie

  4. Stormi Says:

    Nine months in and loving it! I have one other stylist and one shampoo assistant. We only cut and color. I’m working on a web site. One thing I found helpful… we only accept cash and checks. Some clients complain, but there’s a mac next door.
    I’m currently using a paper book. Do you find it pays to go computer with only two to three stylists. I’ll take any suggests/advice. It was nice to find this site, thanks!

    • Jeremy Z Says:

      A small scale business offers rad control of growth but also kind of makes it hard to implement changes I found the software genbook to be a super easy intro online appt booking software, 2 months in and we are already switching to mindbody but its taking longer and is more complex making it a bit of a chore to implement. Start with genbook though super good.

  5. Aura Mae Says:

    Stormi, computerizing the salon can be done much more affordably than used to be possible. I suggest you have a system, whether it is salon specific or not. It is a lot easier to compare where you are with where you have been if you have it on computer. Do an internet search for “salon software” and you will find lots of choices. I do know that Extended Technologies (Salon Biz) has a free program for salon of 4 or fewer service providers. Check it out here: http://www.salonbizlight.com/
    Our online appointment service is $15 a month per stylist, and the website is about $20 a year. Pretty affordable, if you ask me! If you have other questions, let me know. Good luck!

  6. Courtney Says:

    If anyone’s interested, I use http://www.esuresalon.com for all of my business card printing. They even give us quantity discounts if more than one stylist from our salon places an order at the same time.

    • Stacy Says:

      Hi Courtney, I am wondering what type of pay scheme you run your staff on? I have always purchased my business cards for my staff, I run a 50/50 commission scheme. Lately I have been finding my overhead is getting the best of me though so I wonder if I shouldn’t make it policy for the girls to pay for their own business cards? Thank you.

      • Noel Says:

        I own a commission, and I have since the beginning made the girls buy their own business cards. I just think it gives them that little individuality, and they appreciate that as well as their clients. These days there are so many good deals on stuff like that anyway, that I think it is very reasonable to have your staff purchase their own bus. cards. I have a friend that does my bus cards for $50 for 1000. Aweseome deal, and does an amazing job. If anyone is interested reply back and i will give your his info!
        Oh! I just read your post over again, and I run my staff on 50/50 as well. It is very costly, and everyone thinks you make so much money off of them, but they don’t know what you pay and what you are doing when you are not there. You know?

  7. Kasey Says:

    This is Great adivice cheack out my Myspace people! party hard! Whoo-hoo!!@!


  8. Fantastic website! Thanks for all the helpful hints. We found this website http://www.salonscope.com very helpful in locating both new commission and independent stylists. And best of all it is FREE. Thought you might want to pass it on.
    thanks again,
    Amber

  9. Mick Says:

    Love the blog, keep up the good work

    Cheers

    Mick

  10. Walter Says:

    Salon industry marketing is majority Word-of-Mouth Advertising. You don’t always get the feedback you’d like from new customers. Hence, the reason customers never return. While repeat customers get pampered, the walk-ins and referrals are seldom neglected. After each visit have your customer’s rate, review & recommend you for free at http://www.salonblabbermouth.com. Get feedback from your customers. Respond to comments made about your salon. Receive email alerts whenever a user writes a review about your salon. The list goes on of features provided to you as a salon owner.

    In the end, you will facilitate good communication between you and your customer base which allows you to improve on customer satisfaction and thus retaining repeat business.

    SBM Staff Member
    http://www.salonblabbermouth.com

  11. Melissa Says:

    I am a commission salon owner and was looking for input on commissin structure and how advertising works. we put out coupons and the stylists are un happy that we take the discount off the top before we calculate commission. any help would be wonderful.
    Thanks

  12. Aura Mae Says:

    Melissa:
    If the staff don’t want new clients, then they don’t need to participate in the advertising. The salon is advertising in order to bring in new business. Every client they get from the coupon is a client they didn’t have. 40% of something is better than 40% of nothing. That being said, I have never had much success converting the coupon shoppers in to regulars. I have found that the people who are responding to dollars-off are the ones who are likely to leave you for the next coupon. If you have some more specific questions, feel free to email me: aura at azarra dot com.

  13. George Sav Says:

    With the cost of products /supplies can anybody
    tell me if you are deducting the cost of the product
    for the service and paying commission on the difference? Example: let’s say a color service is $50
    and the color product costs $6 the stylist should be paid on the difference of $44 this is called “gross profit” now the product cost is always coverd and it doesn’t have to come from the salon profit!

  14. Aura Mae Says:

    @George: it is very common to take the product cost off the top and pay commission on the remainder.

  15. Paula Says:

    Hi,

    What are your suggestion on buying a salon, if you have no experience in this field. Does the owner need to get any license for the salon?

    Thanks in advance.

  16. Rishi Says:

    This message is for salon owners and professionals. If you want high-end beauty products for you venure visit http://www.moresalonincome.com Good Luck in 2010!

  17. Lisa Kennedy Says:

    Now that I am working for myself from a salon and renting the chair, I am unsure how to pay myself an income. I have a business bank account where I make all of my salon transactions and purchases and keep it separate from my personal finances. How do I give myself a salary or income?


  18. There are a lot of good questions and comments here. The one that stands out off the bat mentioned they only accept cash or checks…

    One of the top rules in business is to reduce as many barriers to making the sale as possible. In other words, provide convenience to a client. Don’t offer barriers like just accepting cash and checks. If they complain then they are not happy and when they are not happy they tell up to 11 people. Secondly, if you only take cash and checks then many clients will suspect that you are avoiding paying taxes and this puts you in a negative light.

    Ultimately, a good business comes down to a quality, exceptional customer experience. If there are any negatives at all, then you are going to lose them in the short run and the long run. Therefore leaving lots of money on the table.

    By the way, if you only accept cash and checks and you are doing well, you will do even better if you accept credit cards.

  19. rebecca Says:

    i absolutly love the advice. i have been operating my own salon.for 2 years. we except all forms of payment, also have a web site. most has been built on word of mouth. not on friless spending on advertizement

  20. polly flores Says:

    i have a question what advice can u give to build clientele

  21. michelle Says:

    I have owned my own salon for going on 6 years. i love what i do and stay busy. i really think i need another person but the last girl i hired(the first girl) was a nightmare !!!!!!!!!!!!! any tips for hiring ?

    • Christina Says:

      Hire slow and Fire fast!!!!
      Remember that your employees are NOT your friends. This alone will save you financially and also prevent you from getting hurt emotionally.

      • Kelly Says:

        Agree 100%. I have hired 2 of my friends worked for me. Couldn’t and can’t tell them things that I want them to do. Always argue back.


      • I work with a lot of salons and you guys all have a different way of running things. This is really great advice! Now if you want to add extra income to your salon you should think about adding our IT WORKS line. The merchandise sells itself because people care how they look aka going to a salon. We hVe AMAZING products with INSANELY low prices and with New Years coming we know what a lot of resolutions will be….WEIGHT LOSE!!! Lets get you all set up TODAY.

  22. Pam Says:

    Michelle, I have been in business for over 30 years and it is a challenge. I have a salon procedure manual(brief) and I ask then to look it over during the interview.
    I wait to see their response. If they seem to have issues with anything in the manual then I know that I will only have more after they are part of our team. There is alot of good people out there, set all your expectations up front,as well as asking them what they expect,Good Luck.

  23. Sara Says:

    I recently got an amazing opportunity this past weekend and was asked if I was interested in opening a hair salon in a small town for a fair price. The salon has been open for over 25 years and the owner has been wanting to retire but then she recently fell and broke her hand so she will not be able to do hair anymore. I’ve been a hair stylist for 3 years now and it has been a dream to open a salon. I feel that the town needs someone young with fresh ideas so I am trying to be positive and hope for the best. I am also nervous. What if it doesn’t work out? How long is it going to take to get ahead and start making money? My prices are higher at the salon that I’m working at now than the women who has been there for years. I’m nervous. Should I go for it?

  24. j Says:

    Yes,go for it. Very rewarding.

  25. Jason N Says:

    For dealing with appointments, an awesome and very easy to use system is AppointmentCare. If you have a web site already, it allows you to take appointments directly from there. Otherwise, it instantly gives you your own mini site to go along with the appointment booking. Check out http://www.appointmentcare.com if you want to make your life (and your customers’) so much easier by allowing your clients to book on their own, sending them reminders automatically, and more.


  26. Do you have any video of that? I’d care to find out more details.

  27. Ros Says:

    Great article. It’s very important to carefully plan out your strategy before becoming a salon/spa owner. We also wrote a quick post about salon/spa owner advice: http://www.abcnails.com/the-beauty-blog/advice-opening-a-salon-or-spa I think yours is very thorough. Congrats!

    Perhaps we can collaborate. You could be a guest blogger on our page.


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  29. naomi Says:

    hi…. i’m a salon owner and dis are great tips i will use for my salon…but then, i want to have a work agreement between me and my staff, how do i go abt it pls???

    • Aura Mae Says:

      There are salon consulting firms that sell leases and other documents. The one I used seems to have closed after the death of its owner, but an Internet search should help you find a current company. Best of luck to you.


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