Chapter 32
The Salon Business
• Being both a great artist and a
successful business person=
The greater you chances
of success
• Entire books have been
written
• Following information is
a general overview
Weymouth.ac.uk
•
Become your own boss:
Owning your own salon
•
Booth rental-not legal in PA. See
“Did you know?”
Beautyschoolsdirectory.com
Salonbootcamp.com
Discoveryspas.com
Opening your Own Salon
• Huge undertaking
*financially
*physically
*mentally
• Face challenges that are complex and
unfamiliar
Kqtv.cityvoter.com
Thehairem.biz
•
before opening your doors decide:
*what products to carry
*what types of marketing and
promotions
*best methods and philosophy for
running the business
*whom to hire
• Consider the following basic issues and
perform basic tasks
Create a Vision and Mission Statement
for the Business Goals
Vision Statement: long-term picture of
what the business is to become and what
it will look like when it gets there
Mission Statement: description of the
key strategic influences of the business
*market it will serve
*services it will offer
*quality of those services
Goals: set of benchmarks that help you to
realize your mission and your vision
• Set short-term and long-term goals for
the business
Create a Business Timeline
Year One:
*determine and complete all aspects
of starting the business
Years Two-Five:
*tending to the business, its clientele,
employees for growing and
expanding
Years Five-Ten-if successfully achieved:
*Add more locations
* expand the scope of the business
*construction of larger space
Years Eleven to Twenty:
*move from being a working
cosmetologist into a full-time
manager
Years Twenty Onward:
*consider selling or
*changing it in some way (junior
partner)
Garysplacesalons.com
Kristirushing.com
Brightonlife.com
B2salon.com
Determining Business Feasibility
• Means addressing certain practical
issues
*do you have a special skill or talent?
(sets your salon apart)
*does the town offer the type of
clientele you want (products and
services you want to offer)?
*how much money is needed to open?
*is funding available?
Choose a Business Name
The name:
*explains what it is
*identify characteristics (sets apart)
*influences how clients perceive the
business
*creates a picture in client’s mind
Colourtube.com
Behindthechair.com
Choose a Location
• Good visibility
• High traffic
• Easy access
• Sufficient parking
• Handicap access
Written Agreements
• Many written agreements and
documents needed
*leases
*vendor contracts
*employee contracts
*and more
• For legal purposes
*who does what
*what is given in return
• Must be able to read and
understand them
Business Plan
•written description of your business
~today
~future
• Agreement with yourself-not legally
binding
•However, needed to obtain financing
Look at printed
business plan
document from
Epiphany Salon
Blogs.nailsmag.com
Includes description:
~business
~services provided
~demographics
Interstellar-solutions.co.uk
*race, age, income, educational
attainment
~salaries and benefits
~pricing structure
•Expenses
~equipment
~ supplies
~ repairs
~ advertising
~taxes
~insurances
~projected income and overhead
expenses
Business Regulations Laws
comply with all local, state, and
federal regulations and laws
•contact local authorities
~business licenses
~other regulations
*zoning
*business inspections
• Comply with all federal Occupational
Safety and Health Administration
(OSHA)
• Manufacturer’s Safety Data Sheets
(MSDS)
Insurance
•must purchase insurance
~malpractice
~property liability
~ fire
~burglary
~ theft
~business interruption
•disabilities policy
Safety manual.com
Oemeyer.com
Salon Operation
• Running of the business
Record Keeping
• Maintain accurate and complete
records of all financial activities
Salon Policies
• Rules and regulations
• Everyone is treated fairly and
consistently
Types of Salon Owners
Individual ownership:
•Make your own rules
•Meet all duties and obligations of
running a business
• Sole proprietor is the owner and
manager
•determines policies
•assumes expenses
• receives profits/bears all losses
Blogs.nailsmag.com
Salonsachet.com
Socialmiami.com
Partnership
• more opportunity for
increase investment
~growth
•can be magical or a disastrous
Ex. Urban Edge
John Paul Mitchell Systems
Partnership:
•Two or more people (not always equal)
~more capital or money
~pool skills and talents
~share work
~responsibilities
~decision-making
~must assume one another’s
liability or debts
John Paul DeJoria
Paul Mitchell
Paul mitchell.com
Urbanedge.boomtime.com
Corporation: ownership
controlled by one or more
stockholders
• Incorporating
*protects your personal
assets
*saves money in taxes
*greater business flexibility
*makes raising capitol easier
Characteristics of corporations:
• Raise capitol by issuing stock
certificates or shares
• Stockholders-has ownership
interest
• Sole stockholder or many
stockholders
• Meetings required to maintain
corporate status
• Income tax is limited to the salary you
draw-not the profits
• Costs more to set up
*formation fees
*filing fees
*annual state fees
• Required to pay unemployment
insurance taxes on salary (sole
proprietor or partner do not)
Ex.
Great Clips
Haircuttery
Strmsigns.com
Haircuttery.com
http://bethlehem.patch.com/listings/holiday-hair-7#photo2225893
Franchise Ownership
• Contractual relationship
• Operating under the franchisor’s trade
name in exchange for a fee
• Under the franchisor’s guidance and
stipulations
Advantages:
• Known name and brand recognition
• Franchisor does most of the
marketing
• Protected territories
Concerns:
• Agreements in what you can and cannot
do
• Be sure to research
• Have a attorney read the
contract/explain
• Must pay the fee (successful or not)
clickedbmx.com
thelifeofrylie.com
Business Plan
Includes:
• Executive Summary
• Vision Statement
• Mission Statement
• Organizational Plan
• Marketing Plan
• Financial Documents
• Supporting Documents
• Salon Policies
Purchasing an Established Salon
•excellent opportunity/look at all
sides of the picture
•Seek professional assistance
from an accountant and a
business lawyer
Agreement should include:
• Financial audit
*actual value of the business
*may not retain all of the former
owner’s clients without help from
former owner
• written purchase
• sale agreement
• complete and signed statement of
inventory
~value of each article
• initiate an investigation
~default in the payments of
debt
• identity of owner
• Use of name and reputation for a
definite period of time
• Disclosure of all information
~clientele
~purchasing
~service habits
• Disclosure of conditions of the facility
• Noncompete agreement- seller will
not work in or establish a new
salon within a specific distance
• Employee agreement-will the
employees stay with the business
Drawing up a Lease
•your own business
~not always the building
•Rent or Lease-specify clearly
~who owns what
~who is responsible for
repairs and expenses
Secure the following:
•exemption of fixtures or appliances
~can be removed without
violating the lease
•agreement about necessary
renovations and repairs
•option to allow you to assign the lease to
another person
Protection Against Fire, Theft, and Lawsuits
• Have adequate locks
• Fire alarm system
• Burglar alarm system
Purchase:
~liability
~ fire
~malpractice
~burglary insurance
Professionalandliability.com
Saloninsurance.com
• all laws cosmetology
~safety and infection control
codes/city/state
• keep accurate records of
everything!!
• Ignorance of the law is no excuse for
violating it
Business Operation
Need:
~excellent business sense
~ aptitude
~good judgment
~diplomacy
~sound business principles
~circle of contacts
*local entrepreneur group
*Chamber of Commerce
Quakertownalive.com
Smooth business management:
• Sufficient investment capital
• Efficiency of management
• Good business procedures
• Strong computer skills
• Cooperation between management
and employees
• Trained and experienced personnel
• Pricing of services
Review price list “starting at”
Review expenses chart (next page)
Mojazzhair.com
Paulzoom.com
Allocation of money
•know where your money is being
spent
•accountant and accounting systems
are indispensable
Business-services.upenn.edu
Tutorsonnet.com
The Importance of Record Keeping
•simple and efficient record system
•necessary regarding taxes and
employees
•record all income and expenses
•retain check stubs, cancelled checks,
receipts, and invoices
Appliance-repair.org
Webdatamation.com
Scottstadel.com
Knowfree.net
Purchase and Inventory Records
•help maintain inventory
~ preventing overstock
~shortage of supplies
•alerts you to theft
•shows net worth
•keep running inventory
~use and retail value
•used daily
~consumption supplies
•sold to clients
~retail supplies
Service Records
•keep client cards
~treatments given
~merchandise sold
Include:
name, address, date, fee charged,
products used, results obtained,
preferences and tastes
Operating a Successful Salon
take excellent care of your
physically attractive
well-organized
smoothly run
sparkling clean
clients
Planning a Salon’s Layout
•best physical layout
~salon you envision
•maximum efficiency
•low-budget
~several stations
~small to medium sized
reception area
~small retail area (clients may
not have money to buy
products)
•High-end salon or luxurious day spa
~ expect higher quality of
the service
~matched by the
environment
~more room in waiting
areas
•coffee bars
•private areas for clients to conduct
business (phone, laptop)
•retail area
~spacious
~ inviting
~well lit
•layout is crucial
•advice of an architect
•professional equipment and furniture
supplier are good resources
• Create small salon or renovate
existing space
• Keep plumbing in same area
• Electrical wiring up to code
• Get everything in writing from
contractors, design firms,
manufacturers, and architects
• Get more than one quote
•
It takes about 6 months for a new salon to operate
at full capacity-have $$$
Personnel
size of salon/size of staff
large salons require “specialists”
receptionists, hairstylists, nail technicians,
shampoo persons, colorists, massage therapists,
estheticians, hair removal specialists
smaller salons
~personnel perform more than
one type of service
Interviewing potential employees:
level of skill
personal grooming
image as it relates to the salon
overall attitude
communication skills
good hiring decisions is crucial
bad hiring decisions
~ painful
~more complicated
Payroll and Employee Benefits
•successful business=everyone feels
appreciated and happy
•share your success when financially
feasible
meet your payroll obligations
offer benefits
schedule employee evaluations
create and stay with a tipping
policy i.e. stylists tip assistants
put pay plan in writing
 create incentives
~earn more money
~ prizes
~tickets
create salon policies and stick to them
Managing Personnel
• make a positive impact on lives and their
ability to earn a living
•learn how to manage other people
•Learn what you can and cannot say when
hiring, managing or firing
• Be familiar with civil rights laws
*Equal Employment Opportunity
Commission (EEOC)
*Americans with Disabilities Act (ADA)
• Have a written personnel policies and
procedures manual
• Every employee must read and sign it
The Front Desk
• “operations center”
•employ professional receptionists
~handle the job of scheduling
appointments
~greeting clients
The Reception Area
•first impressions count
•attractive, appealing, and
comfortable
~receptionist
~retail merchandise
~ phone system
~business cards
~displayed price list
The Receptionist
second in importance
Well-trained
first person the client sees
~pleasant
~ greet each client with a smile
~address each client by name
Tiffanyplacesalon.com
Efficient, friendly service fosters
good will, confidence,
and
satisfaction
duties include:
~role of greeter
~answering the phone
~booking appointments
~inform the stylist client has
arrived
~preparing daily appointment
information
~recommending additional services
~through knowledge of retail
products
~salesperson and information
source for the clients
~straightens up the area
~maintains inventory
~daily reports
Booking Appointments
•most important
•make the most efficient use of
everyone’s time
•client should not have to wait
for a service
•stylist should not have to wait
for the next client
•each person should know:
*how to book appointment
and how much time is
needed for each service
•pleasing voice and personality
• appearance that conveys salon image
• knowledge of various services
***all services, cost, and time
they take
• unlimited patience with both clients
and salon personnel
Appointment Book
• helps stylists arrange time to suit their
clients’ needs
•computerized system
•actual hardcopy
Smartsalonmanagement.com
Use of Telephone in the Salon
•good habits and techniques
increase business
•improve relationship with clients
and suppliers
Good Planning
•Business calls to clients and suppliers
~quieter time of day
~quieter area
•pleasant voice
•use correct grammar
•speak clearly
•“smile”
•show interest or concern
•be polite, respectful, courteous
•be tactful
Incoming Telephone Calls
•lifeline of salon
Clients:
~call ahead for appointment
~call to cancel
~reschedule appointment
*use good manners
•“Good morning”
•Salon name
•“May I help you?”
•“Thank you”
•Answer phone promptly
If you do not have information…
~put client on hold
~get information
~offer to call back with info
•Do not talk to client in room while
speaking with someone on the
phone
Booking Appointments by Phone
•record full name, phone number,
service booked
•confirm appointment one-two days
before
•Be familiar with:
~services
~products
~costs
~what stylists perform
specific services-color
correction
• be fair
**exception-requests
When client requests an unavailable
stylist:
1. Suggest other times
2. Suggest another stylist
3. Put on cancellation list
Handling Complaints by Phone
•difficult task
•respond with self-control, tact
and courtesy
•tone of voice sympathetic and
reassuring and concerned
•try to resolve quickly and
effectively
Building Your Business
•includes all activities that
promote the salon favorably
•attract and hold the attention
•a satisfied client is the very best
form of advertising
•develop a referral program
•hire a small local agency
•advertising budget should not exceed 3
percent of your gross income
•plan well in advance
•know what you are paying for
•get everything in writing
• know your clientele-which type of
media they use
• what kind of messages attract them
Newspapers
*ads, coupons, coupon book
Direct mail
Classified advertising
*yellow pages
Yourhometownportal.com
e-mail newsletters/discount offers
Web site offerings
Giveaway promotional items
*combs, emery boards
Window display
*attracts attention
Radio
Television
Allaboutjazz.com
Flikr.com
Springfieldnebraska.com
Acelham.co.uk
Maurohair.com
Community outreach
*public appearances, women’s and men’s
clubs, church functions, political
gatherings, charitable affairs, bridal
fairs, fashion shows, radio and TV
talk shows
Sierramadrenews.net
Fccc.edu
Client referrals
• In-salon videos
•Follow up every visit to determine client’s
satisfaction
•Personally contact any client that has not
been in the salon for more than eight
weeks
Selling in the Salon
•
financial success revolves around
~sale of additional salon
services
~take-home/maintenance
products
•
adding services or retail sales
*means additional revenue
Smartfurniture.com
Merchantcircle.com
• Beauty professionals feel
uncomfortable selling products and
additional services
• Overcome this feeling
• Sales professionals make customer
care their top priority
• Offer good advice
Etopa.com
Eqgroup.com
Seattlepi.nwsource.com
Amazon.com