Secrets of Million-Dollar Salon Owners.

By Kym Krey

Over the years I’ve worked with some seriously kick-ass salon owners helping them scale their businesses up over the $1,000,000 turnover mark and beyond and this has always been one of the most fun elements of my business.

And as I worked closely with these dynamos, whilst also working with salon owners of smaller businesses who we’re dreaming of that milestone but struggling to achieve it, some very clear differences became obvious to me. I noticed that there were very stark differences in how these 2 categories of business owners thought, how they responded to challenges and made decisions, and ultimately, in the beliefs they held about their business, the industry and employees in general, which I could see contributing significantly to the difference in their turnover, profit and lifestyle.

These two groups had wildly different experiences as business owners and employers. Although they faced the same challenges, they responded to them quite differently and so had very different outcomes.

Let me take you behind-the-scenes of what I see to help you master the mindsets and habits of highly successful salon owners, so that you can become one too!

Problematic staff:

The most dramatic difference and the one I probably see most often is how employers respond to someone on their team who has become highly problematic- even damaging despite endless conversations to try to remedy the issues and turn the behaviour around.

The struggling salon owner is usually adamant that there’s nothing they can do. There are no staff out there, they cannot afford to lose this one, so they have no choice but to put up with whatever drama and chaos they bring. They are powerless. A victim of an unfair situation.

The million-dollar-salon owner has already made up their mind. They know the situation has become dangerous and, whilst they’d have liked to see a different outcome, they are already making plans to move the problem person on, protect their business and re-build their team culture. Yes, it’s going to result in a few weeks or months of being short-staffed, of having to re-jig rosters and reschedule client appointments, but the choice between long-term damage to their business and short-term inconvenience is a no-brainer. They’ve got to go!

In fairness, to understand the importance of this decision, they’ve likely learned a painful lesson somewhere along the way- having avoided this decision in the past and lost several key staff in the process who resigned because they just didn’t want to work with such a negative team member anymore. Ouch!

Onboarding & Induction:

This area shows another stark difference due to the time required to give the new employee the thorough download of all the values, explanations, how-to’s, this-is-how-wedo-it-here and rules-of-the-game required for them to slot straight in and become a productive team member.

The struggling salon owner says “I’ll get to that later. I’m too busy. I’ll just explain as we go” . The inevitable result? That salon owner complaining months down the track that the new stylist isn’t performing and is nowhere near the level that they portrayed in their interview. They feel misled.

The million-dollar-salon owner isn’t going to let that new team member anywhere near their precious clients until they’re confident that they’re equipped to deliver their signature salon experience, every client, every time. They don’t care which salon they’ve come from or how long they’ve been in the industry, they’ve worked hard to build their salon’s reputation and aren’t about to damage it now through a less-than-ideal experience with a newbie.

They’ll reschedule, juggle, and do whatever needs to be done to prioritise the hours needed to onboard them properly. They have very clear expectations of this new team member, and the standards are high- so they understand that they must, in fairness, give their newbie the best possible chance of being the absolute superstar the business needs. They are literally building a champion.

I also see systemisation starting to form in their onboarding processes. They create an induction program once and use it again and again, each time they welcome someone new. They even create short videos to form a library of mini tutorials on how to do everything from work the washing machine to present a client’s refreshment tray or answer the phone.

Then they forward links to these videos, a few at a time, to the newbie over their first few days (or even before they start so they hit the ground running!), marking off a checklist of topics to ensure everything has been covered.

Continual Coaching Routine:

Closely tied to the previous topic is the ongoing commitment of prioritising time regularly with each team member to discuss progress, celebrate wins, identify performance or skills gaps, and create plans for progression.

The struggling salon owner says, “It’s hard for me. I have staff starting at different times so I can’t talk to them all at once. I’m the busiest person in the salon so I can’t cross out time to sit and talk! That would cost me a fortune”.

(Hint: not as much as an underperforming employee!)

Or they’re hit-and miss with these conversations, trying to squeeze them in while colours are processing- and cutting the conversation short when they have to leave to rinse, or cancelling the meeting because they took a last-minute client appointment, leaving the staff member feeling un-prioritised and under-valued.

The million-dollar-salon owner has their eye on the prize- and that prize is the freedom to have time away from their business and have it still operate profitably in their absence, or not having to work 40+ hours on the floor every week (with aching joints and muscles) just to pay the bills. They understand that by the time they have around 7-8 staff, their role needs to shift away from ‘hands-on-hairdresser’ to ‘team builder’ and ‘people developer’ so their weekly one-on-ones, monthly reviews and full performance reviews are already recurred in their booking schedule months ahead, so they never struggle to fit them into a booked out appointment schedule.

The struggling salon owner sees themselves as the source of their income whereas the million-dollar salon owner knows that they’ll make far more if they can get each member of their team firing – it’s literally duplicating themselves and their ability to earn.

This Results-through-others mindset is key if you want to scale. The most important skills that you’ll need (and the one I see most lacking in business owners) is the ability to achieve results through others.

Employee Beliefs:

The struggling salon owner believes ‘There are no decent staff out there. None of them want to work. They all just demand ludicrous hourly rates but can’t make a target to cover them. The industry is in bad shape. It’s happening everywhere.’

The million-dollar-salon owner believes ‘There are good people around but they’re never going to do it on their own, without my help. They’ll be a product of my culture, my expectations and accountability routines, and my ability to develop them. I’m very clear on the raw ingredients (attitudes and behavioural traits) I’m looking for and I know how to take it from there”.

[And I’m going to add in here: Their coaching routines mean that if someone isn’t performing or progressing to expectations, they’ll pick it up quickly, address it and give them team member the opportunity to turn it around, but if they choose not to, they’re not afraid to set them free and try again. Underperformance is never allowed to become normal. That’s not how they roll!]

Money Management:

We’ve all experienced the struggle of tight cash flow in our early years, right? That rollercoaster of “Woohoo, big week. I have money!” .. and “OMG how am I ever going to find $8,000 to pay that stock bill by next Friday?” but this is again where I see a stark difference in habits between successful and less-successful business owners.

Most of us start with next to nothing in terms of back-up cash and are running on the smell of an oily rag for the first couple of years, but if you’re still doing that after 5 years, we need to look more closely at why.

If you know that BAS is due every quarter and you’ll need to pay staff superannuation around the same time as well, it’s no surprise. So why are you continually getting caught short? Because you’re sticking your head in the sand for 12 weeks and then stressing out for the 13th when the bill arrives!

The struggling salon owner scrapes the money together (or puts it on credit card) to pay what’s due and then doesn’t want to think about it again for a while, which means they’re completely unprepared again when the next instalment is due.

The million-dollar-salon owner thinks “I’m never going to be caught out like that again!” so they immediately start putting money aside each week (even when it’s tight) so the money is easily available when due.

This habit of putting money aside for different purposes serves them well. Once they’re on top of immediate liabilities like tax and super, they start to save for staff holiday pay, sick leave, and long service entitlements, so that money is also sitting there when needed, and then for big staff education opportunities

(Sassoon course in London anyone?), their own holidays and sometimes even an investment property. You have a different feeling starting out a busy week when you know your efforts are not only paying you well but also paying off assets to build your investment portfolio which gives you an ongoing income long after you’ve exited this business.

In summary, the people I speak to who have built million-dollar businesses know there will be challenges but aren’t prepared to be stopped by them and refuse to believe that they are powerless in any situation. Rather than getting bogged down by thinking “it’s hard” , or “It’s not fair” , they will immediately look for ways to overcome the issue. Instead of “I can’t” , it’s “How can I?” or “What would that take?”

Same industry. Same economy. Same employment market. Very different outcomes and bank accounts!

To summarise, there is no truer statement than to build a million-dollar business, you must become the level of person who can build a million-dollar business. You must think like a million-dollar business owner. You must choose your beliefs wisely. What’s the point of believing that you can’t make money in the hairdressing industry anymore when you OWN a business in the hairdressing industry? That makes no sense, and it certainly won’t make you successful!

By the way, you most certainly CAN make money in the hairdressing industry and to all of those who’ve done it, I’m standing and applauding because I know what that takes to achieve.

Kym Krey is a highly experienced and trusted salon industry business coach and leadership mentor. She’s been where you are and has the runs on the board to help you get real results. If you’re ready to turn your business around, become a better leader, take that next big leap, or scale to a million-dollar turnover and beyond, get in touch: kym@kymkrey.com.au; @kymkrey or www.kymkrey.com.au