Salon Business Chapter 6

Chapter 6 Tour: Salon Business Job Search Pages Identify which job offer to accept by recognizing: The steps necessary to search for a job Questions to be asked during a job interview Personal qualities that will be evaluated during the interview Potential job benefits that an employer might offer 2 The Beauty Industry Pages Establish short and long range personal goals within the beauty industry 1

Chapter 6 Tour: Salon Business Professional Relationships Pages List the steps used to develop and maintain professional relationships, including building clientele 3 Salon Ownership Pages Describe salon ownership types, structure, operations and requirements for the practice of good business 4 Salon Retailing Pages Define the techniques used to recommend retail product sales to clients 5

Salon Business What You Need to Know Your Personal Goals THE BEAUTY INDUSTRY Chapter 6.1 Salon Business The Beauty Industry

Chapter 6.1 Salon Business The Beauty Industry Label-reading has become a trend in today’s society. People regularly analyze contents and quality of the products they purchase. What are some products that people often read the labels for and what information they are seeking?

Chapter 6.1 Salon Business The Beauty Industry Product labels consumers frequently read: Drinks – caffeine, sugar, sodium Food – organic, fat, sugar, calories Hair products – alcohol content Makeup – SPF Paint – lead-free Outdoor spray/wipe – % Deet Detergents – fragrance, additives Textbook – ISBN number Cleaners - bleach

The stylist is no longer a beauty “operator”, but an artistic beauty professional, offering solutions and creativity on behalf of the client. The Beauty Industry Chapter 6.1 Salon Business The Beauty Industry The stylist is no longer a beauty “operator”, but an artistic business professional, offering solutions and creativity on behalf of the client.

BINGO G O A L S B8 I 25 N 34 G 49 O 68 Goals Word Wall

BINGO C O N S UM MERIS Goals B 8 B 3 B 15 B 6 B 10 B 4 I 19 N 39 G 64 O 76 O 68 Consumerism Word Wall

Knowledge in many business areas is vital to success in today’s cosmetology world The cosmetology industry changes quickly and so must you You need to be both a business person and an artist What You Need to Know Chapter 6.1 Salon Business The Beauty Industry

Some analysts estimate the global beauty industry: What You Need to Know Beyond the Book $38 billion of hair-care products Skin care worth $24 billion is growing up to 7% a year, more than TWICE the rate of developed world’s GDP! Makeup of $18 billion $15 billion of perfumes

A GOAL states and defines what path your career will take. Your Personal Goals Chapter 6.1 Salon Business The Beauty Industry Become a Platform Artist Own a Salon Teach in a School Long-range goals identify where you want your career to be in five years. Short-range goals identify what you would like to achieve in the next year.

Your Personal Goals Chapter 6.1 Salon Business The Beauty Industry To achieve your goals… Establish a long-range goal Determine short-range goals Create a plan to achieve goals Review goals periodically

Goal Setting and Goal Getting Strategy Your Personal Goals Beyond the Book Decide goal timeline Brainstorm as many goals as possible B D Do what needs to make it happen Distinguish what is/is not working 3

On a sheet of paper numbered 1-5, answer the following questions. The Beauty Industry Self-Check Chapter 6.1 Salon Business The Beauty Industry 1.The goal that identifies where you want your career to be in five years is a ___________ goal. 2.__________ goals identify what you would like to achieve in the next year.

3.T or F Be sure to create a plan to achieve your goals. 4.A statement or definition of the path your career will take is a/an _________. 5.A cosmetologist must be both a/an ___________ and a/an ________ ________. The Beauty Industry Self-Check Chapter 6.1 Salon Business The Beauty Industry

As you correct your answers, evaluate your progress. Create a Know Chart with 2 columns. Place correct answers from the Self-Check under the “I Know” column. Then place incorrect answers under the “I Need to Study” column. K N O W C H A R T I Know: I Need to Study: Chapter 6.1 Salon Business The Beauty Industry Know Chart

Now check your work. The Beauty Industry Self-Check Chapter 6.1 Salon Business The Beauty Industry 1.The goal that identifies where you want your career to be in five years is a _________ goal. 2.__________ goals identify what you would like to achieve in the next year. long-range Short-range

3.T or F Be sure to create a plan to achieve your goals. 4.A statement or definition of the path your career will take is a/an _______. 5.A cosmetologist must be both a/an ___________ and a/an ________ ______. The Beauty Industry Self-Check Chapter 6.1 Salon Business The Beauty Industry business person goal artist

What You Need to Know  To be successful in today’s cosmetology world, you must be knowledgeable in many areas of business, including communications, public relations and sales promotions Chapter 6.1 Salon Business The Beauty Industry Lessons Learned Face the Facts

Chapter 6.1 Salon Business The Beauty Industry Your Personal Goals  Establish short and long range personal goals within the beauty industry –Establish a long-range goal –Determine your short-range goals –Create a plan to achieve your goals –Review your goals periodically Lessons Learned Face the Facts

Chapter 6.2 Salon Business Job Search Resumes Job Interviews Evaluating the Salon Job Search Salon Business

Word Wall Interview Job Benefits First Job Interview Resume Cover Letter General Orientation Program Assistant

Talk to stylists who work in salons you admire Check classified section of local newspaper Talk to distributor sales consultants Job Search Strategies Chapter 6.2 Salon Business Job Search

Check with job placement at school and/or check with city or state unemployment office Canvass the area where you would like to work; call or visit salons that impressed you most Mail out resumes and cover letters Job Search Strategies Chapter 6.2 Salon Business Job Search

Personal Data Educational Background Additional Training Special Skills/Areas of Expertise Previous Employment Special Awards or Recognition Name Address City, State, Zip Phone OBJECTIVE:A beginning job in hair design leading to a position as a platform artist EDUCATION:Pivot Point Academy Chicago, Illinois Diploma in Cosmetology, 2006 Professional training in all areas of hair artistry as well as skin care, nail care and personal and professional communications. Special classes with John Doe and People Skills with Bob Wright. Chicago High School Chicago, Illinois Diploma in General Education, 2003 EXPERIENCE:Cashier – Touhy & Western Standard PresentChicago, Illinois Duties include maintaining inventory as well as operating electronic cash registers AWARDS RECEIVED:1st Place in Ethnic Hair, 1st Place in Color and 3rd Place in Evening Makeup Resumes Chapter 6.2 Salon Business Job Search

Resumes Chapter 6.2 Salon Business Job Search Be sure to type your resume neatly

Also include: References - professional/personal Interests - hobbies/skills Most important: WHY you want to work in this particular salon Resumes Chapter 6.2 Salon Business Job Search ?

Resumes Chapter 6.2 Salon Business Job Search Cover letter – necessary companion piece to the resume that serves as a brief summary of qualifications

Many resume reviewers skim resumes for as little as 10 seconds during the initial screening, so your resume needs to quickly relay your objective and key qualifications. Resumes Beyond the Book DONE!

Personal Appearance Neat Fashionably Dressed Flattering hairstyle Healthy skin Good first impression Properly applied makeup Job Interviews Chapter 6.2 Salon Business Job Search

Application Job Interviews Chapter 6.2 Salon Business Job Search Name Address Telephone number Graduation date Graduating institution State Board exam completion date Additional education/training Application Form

Punctuality Job Interviews Chapter 6.2 Salon Business Job Search FIRST impression Arrive early Confirm exact location Parking availability and cost Approximate travel time

Technical and Communication Skills Job Interviews Chapter 6.2 Salon Business Job Search The interviewer may: Ask for a demonstration of skill level with a model Contact the school to get an appraisal from instructors The interviewer will also be evaluating communication skills and the ability to develop interpersonal relationships.

Personal Qualities Job Interviews Chapter 6.2 Salon Business Job Search Sincerity and honesty Motivation and enthusiasm Understanding the salon’s goals Realistic career objectives Desire to work Teamwork Ability to promote service and products Ability to organize and manage time Educational and professional goals Ability to accept constructive criticism In the United States, illegal interview questions are those that discriminate on the basis of: age color race gender disability national origin religion or creed

Job Interviews Beyond the Book S T A R Describe the SITUATION that you were in or the TASK that you needed to accomplish. Describe the ACTION you took and be sure to keep the focus on you. What were the RESULTS? What did you accomplish? What did you learn?

Evaluating the Salon Chapter 6.2 Salon Business Job Search Evaluate the salon in terms of advantages and disadvantages Ask the owner/manager questions about the prospective job –Services and product lines –Management and staff –Benefits and compensation –Policies and procedures HINT: The size of the salon does not indicate potential for growth and success

Evaluating the Salon Chapter 6.2 Salon Business Job Search Commission Retirement plans Bonuses Paid holidays & vacations TravelInsurance benefits AdvancementWork environment Job Benefits – a key factor in accepting a position

Common approaches to instructing new employees: General orientation program – Employee Handbooks detailing work habits and standards of the salon. May also include a few days of technical training Assistant or apprentice – New stylist observes an experienced stylist in the salon until he/she is totally familiar with salon procedures and practices Evaluating the Salon Chapter 6.2 Salon Business Job Search Your New Job

XYZ SALON Evaluating the Salon Beyond the Book Most important question - Will I be proud to tell people where I work and what I do?

1.________________________________ 2.________________________________ 3.________________________________ 4.________________________________ Job Search Self-Check List four personal qualities you may be evaluated on during the interview. Chapter 6.2 Salon Business Job Search On a sheet of paper numbered 1-8, answer the following questions.

5.Which of the following is NOT a legal question an interviewer can ask during your interview? a. How old are you? b. What are your career goals? c. What do you see as your greatest communication skill? d. Would you perform a highlight service on the model you brought? Job Search Self-Check Chapter 6.2 Salon Business Job Search

6.The _____ of the salon is probably the least important factor in deciding whether to accept a position. 7.T or F An effective method to find employment is to call or visit salons that impress you and ask if they are hiring new personnel. 8.T or F When making a decision to accept employment, the main factor you should consider is salary or wage. Job Search Self-Check Chapter 6.2 Salon Business Job Search

As you correct your answers, evaluate your progress. Create a Know Chart with 2 columns. Place correct answers from the Self-Check under the “I Know” column. Then place incorrect answers under the “I Need to Study” column. K N O W C H A R T I Know: I Need to Study: Chapter 6.2 Salon Business Job Search Know Chart

1.________________________________ 2.________________________________ 3.________________________________ 4.________________________________ realistic career objectives understanding the salon’s goals ability to promote service/product motivation or enthusiasm openness to constructive criticism honesty or sincerity team player Job Search Self-Check Now check your work. List four personal qualities you may be evaluated on during the interview. Chapter 6.2 Salon Business Job Search ability to organize and manage time educational/professional goals desire to work

5.Which of the following is NOT a legal question an interviewer can ask during your interview? a. How old are you? b. What are your career goals? c. What do you see as your greatest communication skill? d. Would you perform a highlight service on the model you brought? Job Search Self-Check In the United States, illegal interview questions are those that discriminate on the basis of: age color race gender disability national origin religion or creed Chapter 6.2 Salon Business Job Search

6.The _____ of the salon is probably the least important factor in deciding whether to accept a position. 7.T or F An effective method to find employment is to call or visit salons that impress you and ask if they are hiring new personnel. 8.T or F When making a decision to accept employment, the main factor you should consider is salary or wage. Job Search Self-Check Chapter 6.2 Salon Business Job Search Job benefits are a key factor in accepting a position. Often a job that pays less in salary is actually giving you more by providing you with costly benefits. size

Chapter 6.2 Salon Business Job Search Resumes  Develop a resume that describes your attributes in a clear, concise manner, including: –Personal data (name, address, phone) –Educational background (schools attended) –Additional training (seminars attended, etc.) –Previous employment (if applicable) –Special skills or areas of expertise –Special awards or recognition Lessons Learned Face the Facts

Job Interviews PP ersonal appearance and grooming habits are very noticeable and set the tone for the interview BB e prepared to fill out an application for employment prior to the interview if asked EE nsure early arrival for the interview by confirming location, parking availability and approximate travel time BB e prepared to demonstrate your skill level by bringing a model to cut, color or perm TT he salon management will evaluate you on your personal qualities Chapter 6.2 Salon Business Job Search Lessons Learned Face the Facts

Evaluating the Salon  Correctly evaluating your future work place can be done by asking the owner/manager questions about the prospective job  Consider some of the following criteria: −Management −Services −Clientele −Compensation −Job benefits −Product lines used −Work environment/location Chapter 6.2 Salon Business Job Search Face the Facts Lessons Learned

A friend of yours that has been interviewing for stylist positions was offered a position at Salon A and Salon B. She has come to you seeking advice on which position she should accept. Explain to your friend the criteria she should consider to evaluate each salon. Chapter 6.2 Salon Business Job Search IT’S 2 U!

Answers will vary but may include: Chapter 6.2 Salon Business Job Search IT’S 2 U! –Salon management - communication style, encouraging, approachable, policies and procedures –Services – types of services offered, prices, quality of work, competitive, advertising and promotions –Staff - size, team approach, continuing education –Products - product line, retailing/recommendation goals –Compensation - pay structure, job benefits –Environment - working conditions, job responsibilities, growth-oriented

Chapter 6.3 Salon Business Professional Relationships Networking Building a Clientele The Stylist-Client Relationship The Stylist-Staff Relationship Performance Review PROFESSIONAL RELATIONSHIPS Salon Business

Professional Relationships Word of Mouth Advertising You just started your new job at a salon. What are some ways you can build your clientele? Business Cards Referrals Rebooking Your Personal Touch Advertising Follow Up

BINGO N EO TA WLG ORKIN Word Wall B 8 B 6 B 10 I 29 N 42 B 12 B 15 G 60 O 68 O 70 B 8B 12B 15B 6 B 10 I 29 N 42G 60O 68O 70 Networking

Word Wall BINGO W O R D OFH MOUT B 3B 15B 6B 10I 29I 19N 39G 64O 76O 68B 8 B 3 B 15 B 6 B 10 I 29 I 19 N 39 G 64 O 76 O 68 Networking Word of Mouth

Professional relationships are based on open, honest, well-developed communication with everyone you meet during your career Formed at the beginning of your career, the most important relationships are developed within the salon Networking Chapter 6.3 Salon Business Professional Relationships

Networking Beyond the Book About 70% of all jobs are found through networking. A referral produces 80% more results than a call.

Word of Mouth – most effective strategy Business cards Referrals Rebooking Building a Clientele Chapter 6.3 Salon Business Professional Relationships Promotional literature Guest appearances Correspondence Your personal touch

Building a Clientele Beyond the Book When starting off, offer clients a discount for each new client they send you; or, promote gift vouchers for birthdays, Mother’s Day and other holidays. A Gift for You

Convince clients of your credibility and abilities as a cosmetologist Establish a professional relationship with your clients The Stylist-Client Relationship Chapter 6.3 Salon Business Professional Relationships If your clients feel you are anxious to please them, they will develop a loyalty toward you.

Determine client needs Explain what the finished look will be before providing service Suggest alternative styles Teach maintenance of new style Provide information on product regimen and application Show pictures of new styles/suggest additional services The Stylist-Client Relationship Chapter 6.3 Salon Business Professional Relationships Keys to Successful Client Relationships

Introduce change periodically Accommodate client whenever possible Share new information about the industry Show respect and concern Manage downtime constructively - help others, perform salon tasks and maintain client base Notify in advance and rebook appointments if absent or on vacation The Stylist-Client Relationship Chapter 6.3 Salon Business Professional Relationships Keys to Successful Client Relationships

Stylist-Client Relationship Beyond the Book Client consultation allows you to meet emerging client needs and build partnerships.

The Stylist-Staff Relationship Chapter 6.3 Salon Business Professional Relationships Common Goals Personal Goals –Day, month and year Business Goals –Financial –Sales volume –Educational T T E E A A M M Concept Teamwork flourishes when a blending of personal and business goals occurs.

The Stylist-Staff Relationship Chapter 6.3 Salon Business Professional Relationships Sharing Knowledge Sharing results in loyal, satisfied clients Share your knowledge with your fellow team members and other professionals Consult with team members about conflicts Express ideas, thoughts and feelings to create an open professional relationship T T E E A A M M Concept

The Stylist-Staff Relationship Chapter 6.3 Salon Business Professional Relationships Helping Others Use extra time to help co-workers Establish rapport with co-workers with good communication, understanding and teamwork T T E E A A M M Concept

The Stylist-Staff Relationship Chapter 6.3 Salon Business Professional Relationships Successful business people: 1.Plan ahead 2.Create a professional image 3.Define goals 4.Develop good professional relationships Education SUCCESS SkillConfidence + +=

Stylist-Staff Relationship Beyond the Book A supportive staff can often make the difference between success and failure. Over time, the staff may come to regard you as a helpful resource for information.

A discussion with management about your job performance Occurs at regularly predetermined intervals Suggests ways to capitalize on strong areas Provides constructive criticism about areas where you could improve Helps develop a plan to make improvements Performance Review Chapter 6.3 Salon Business Professional Relationships

Performance Review Beyond the Book When receiving criticism, welcome the feedback, listen to the criticism and view it as an attempt to fix a problem, not a personal attack.

Name five techniques you can use to build a clientele. 1._____________________ 2._____________________ 3._____________________ 4._____________________ 5._____________________ Professional Relationships Self-Check Chapter 6.3 Salon Business Professional Relationships On a sheet of paper numbered 1-8, answer the following questions.

6.A discussion with management about your job performance is a ______________ _________. 7.T or F Business cards are the most effective way of building your clientele. 8.T or F The most important relationships you form at the beginning of your career are those developed within the salon. Professional Relationships Self-Check Chapter 6.3 Salon Business Professional Relationships

Know Chart As you correct your answers, evaluate your progress. Create a Know Chart with 2 columns. Place correct answers from the Self-Check under the “I Know” column. Then place incorrect answers under the “I Need to Study” column. K N O W C H A R T I Know: I Need to Study: Chapter 6.3 Salon Business Professional Relationships

Name five techniques you can use to build a clientele. 1._____________________ 2._____________________ 3._____________________ 4._____________________ 5._____________________ Professional Relationships Self-Check promotional literature correspondence guest appearances Chapter 6.3 Salon Business Professional Relationships business cards referrals word of mouth advertising rebooking personal touch Now check your work.

6.A discussion with management about your job performance is a ____________ _______. 7.T or F Business cards are the most effective way of building your clientele. 8.T or F The most important relationships you form at the beginning of your career are those developed within the salon. Professional Relationships Self-Check Chapter 6.3 Salon Business Professional Relationships performance review Word of mouth advertising is the most effective way of building your clientele.

Networking  Professional relationships are based on open, honest, well-developed communication with everyone you meet during your career  The most important relationships you form at the beginning of your career are those that develop within the salon Chapter 6.3 Salon Business Professional Relationships Lessons Learned Face the Facts

Building a Clientele  Word of mouth advertising is probably the most effective way of building your clientele  Other techniques you can use to build clientele include: –Business cards –Referrals –Rebooking –Promotional literature –Guest appearances –Correspondence –Your personal touch Chapter 6.3 Salon Business Professional Relationships Lessons Learned Face the Facts

The Stylist-Client Relationship  Client consultation – determine needs, explain finished look, suggest alternative styles  Explain home care regimen – maintenance of service, proper product application  Suggest changes – show new styles, suggest additional services, share new information  Notify clients in advance in case of absences and reschedule with a different stylist Chapter 6.3 Salon Business Professional Relationships Lessons Learned Face the Facts

The Stylist-Staff Relationship  Teamwork flourishes when a blending of personal and business goals occurs  Share your knowledge and techniques with fellow team members and other professionals  You should express your ideas, thoughts and feelings to create an open professional relationship with others  The most important factor of teamwork is the sense of togetherness and friendship Chapter 6.3 Salon Business Professional Relationships Lessons Learned Face the Facts

Performance Review  Occurs at predetermined intervals  It is important to do a self-appraisal prior to each review  Suggestions will be given to help you capitalize on strong areas  Constructive criticism will be received about the areas where you could improve Chapter 6.3 Salon Business Professional Relationships Lessons Learned Face the Facts

Clients must be convinced of your credibility and your abilities as a cosmetologist. What are some actions you can take as a stylist to establish a professional relationship with your clients? Chapter 6.3 Salon Business Professional Relationships IT’S 2 U!

–Determine client needs, suggest alternative styles, and explain what the finished look will be –Teach the client how to maintain the service, explain product regimen to be used at home –Show client new styles, suggest additional services, share new information about the industry –Accommodate the client whenever possible and treat them with respect –Notify clientele in advance if you plan to be absent and rebook appointment with fellow stylists Chapter 6.3 Salon Business Professional Relationships IT’S 2 U! Answer

Chapter 6.4 Salon Business Salon Ownership SALON OWNERSHIP Salon Business Requirements of a Salon Getting the Right Advice Self-Appraisal Borrowing Money Space Requirements and Floor Plans Types of Salon Ownership Rental Agreements Types of Insurance Taxes Expenses and Income Salon Philosophy, Policies and Procedures Salon Operation

1.Do I have an enthusiastic work attitude? 2.How well do I interact with colleagues in my area? 3.Am I open-minded when it comes to changes? 4.How do I contribute to the team effort in my department? 5.What are my work-related goals for the next year? 6.Do I have a positive working relationship with my supervisor and colleagues? Salon Ownership You have just learned that communication skills are very important in the salon business. Answer these questions as they apply to you.

Word Wall BINGO A SSETS TEA WTLG OSKIN B 8 B 12 I 25 N 34G 47 N 34 G 47 O 67 Assets

Word Wall BINGO L IAETS TBI WTLIT OSKIY B 8 B 12 I 25 I 21 N 31 N 37 G 49 O 70 Assets Liability O 68

Word Wall BINGO S ALARY TAR WTLTY OSKIN B 8 B 12 I 25 N 34G 47 N 34 O 67 G 47 O 67 Assets Liability Salary

Word Wall BINGO C OMMIS TARS WTLTI OSKNO B 8 B 12 I 25 N 34G 47 N 34 O 67 G 47 O O 75 O 70 O 68 G 60 O 60 Assets Liability Salary Commission

Word Wall BINGO P ARPOR RARP TTLTI NERSH B 8 B 12 O 70 B 15 I 29 B 6 B 10 I 29 B 15 N 42 O 68 G 60 B 10 O 68 G 60 Assets Liability Salary Commission N 42 O O 75 Partnership

Word Wall BINGO C ORPOR TARA WTLTT OSNOI B 8 B 12 I 25 N 34G 47 N 34 O 67 G 47 O O 75 O 70 O 68 G 60 Assets Liability Salary Commission N 42 CorporationPartnership

Word Wall BINGO G O ANCHI RLS FE B 10 B 6 B 15 I 21 N 31 G 53 O 75 O 70 O 68 Assets Liability Salary Commission CorporationPartnershipFranchise

Skills essential to a successful salon owner include the ability to do all of the following: Recognize hair fashion trends & technical expertise Communicate with the public Accept suggestions and criticism; exert self-control Manage financial operations of a salon Establish and adjust salon pricing Create business through promotion Set realistic business goals; organize a business plan Self-Appraisal Chapter 6.4 Salon Business Salon Ownership Identify your areas of weakness and hire employees for whom these areas are strengths.

Financial Status Self-Appraisal Chapter 6.4 Salon Business Salon Ownership Anyone thinking of opening a business must have money to invest. You must prove you are a “good risk” before a bank or some other financial institution will lend you money.

Personal Financial Statement Self-Appraisal Chapter 6.4 Salon Business Salon Ownership Three basic elements: 1. Assets – All of the property you OWN 2. Liabilities – All the money you OWE 3. Net Worth – Subtract Liabilities from Assets ASSETS – LIABILITIES = NET WORTH

Beyond the Book Self-Appraisal Finding the right career begins with identifying the right job skills. Knowing what you like to do and doing the job well increases your chances for career success. Identifying your work values, personality and career inventories are the cornerstone to finding the dream job.

Types of Salon Ownership Chapter 6.4 Salon Business Salon Ownership Sole Proprietorship Controls the business Receives all profits Is responsible for all debts and losses Owned by ONE person who:

Types of Salon Ownership Chapter 6.4 Salon Business Salon Ownership Partnership Owned by two or more persons Written partnership agreement –Dictates profit and loss allotments –Specifies rights and obligations of each partner Solidly based relationship between partners is key to success

Types of Salon Ownership Chapter 6.4 Salon Business Salon Ownership Corporation A legal entity separate from shareholders Articles of Incorporation –Describe purpose and structure of company Shareholders (owners) –Elect Board of Directors Appoints officers –Receive income based on profits –Not liable for corporation’s debts or losses

Types of Salon Ownership Chapter 6.4 Salon Business Salon Ownership Franchise Operating agreement –Fee paid to parent corporation in exchange for fixtures, promotion, advertising, education and management techniques –Policies and procedures of parent corporation must be followed Owner can be sole proprietor, partnership or corporation

Types of Salon Ownership Many salon owners think that leadership isn’t a part of salon ownership, but it is. In order to be a good salon owner, you must learn to lead. Leadership creates the structure and focus that leads to a successful salon. Beyond the Book

Market Need Cost of Necessary Improvements Requirements of a Salon Chapter 6.4 Salon Business Salon Ownership Salon Planning Research Location LOCATION is the most important factor in opening a salon business.

Beyond the Book Requirements of a Salon When looking for a location for your business, it is important to have access to your market and customers: you want to be as close to them as possible.

Accountant The Financial Advisor Getting the Right Advice Chapter 6.4 Salon Business Salon Ownership Informs you about types of business ownership and the tax benefits and liabilities of each type Evaluates a rental agreement Sets up basic bookkeeping system Records and prepares tax payments Represents you in audits by the IRS

Insurance Agent The Risk Mitigator Getting the Right Advice Chapter 6.4 Salon Business Salon Ownership Provides advice on insurance needed to safely open and operate a business Collects the fee you are paying the insurance company to assume your risk of loss INSURED

Lawyer The Legal Guide Getting the Right Advice Chapter 6.4 Salon Business Salon Ownership Advises on legal obligations of business ownership, borrowing money, signing rental (lease) agreements and assuming tax responsibilities. Provides direction when signing documents and writing agreements Assists the salon owner in compliance with all laws and regulations Counsels owner prior to signing a purchase or rental agreement

Distributor Sales Consultant The Supplier Getting the Right Advice Chapter 6.4 Salon Business Salon Ownership Links the manufacturers of products and equipment and the salon Carries all products and equipment needed to open a salon May have financing available Helps in salon design, finding good salon location and prospective employees Provides education, seminar or workshops

You should seek advice about: setting up the necessary bookkeeping and accounting processes establishing an appropriate legal structure for your business effectively displaying your merchandise setting up customer service standards employing the right people and complying with award requirements Getting the Right Advice Beyond the Book

In general, it takes 120 to 150 square feet per stylist to create an efficient working space. Space Requirements and Floor Plans Chapter 6.4 Salon Business Salon Ownership All salons require a reception area with seating and a desk for receiving clients, a dispensary, a restroom and other service areas, such as shampoo and drying areas. Some regulating agencies have specific minimum space requirements for each stylist.

Space Requirements and Floor Plans Recognizing and planning for new space requirements and floor plans can be a make-or- break factor in getting your location up and running. Provide the company with detailed floor plans to get everything in the right place, quickly. Beyond the Book

Never sign a rental agreement until you have received your loan approval. Borrowing Money Chapter 6.4 Salon Business Salon Ownership Generally, you must be willing to invest some of your own money in the salon for an institution to grant a loan. An accountant should advise you of the operating capital needed to open the salon and to pay the expenses for at least six months. BANK LOAN APPROVED Be sure to make all loan payments on time to avoid default

Beyond the Book Borrowing Money The highest value note ever printed was a $100,000 bill featuring President Woodrow Wilson. 100,000

A large portion of the expense of the salon is the rent, which consists of two kinds: Rental Agreements Chapter 6.4 Salon Business Salon Ownership Upon obtaining a loan, you can enter into a rental agreement (lease). As the renter or lessee, you promise to pay rent and use the property according to the agreement. Set dollar amount per month Set dollar amount plus percentage of monthly income FIXEDVARIABLE

Rental Agreements Not testing electrical outlets, machinery, lighting, air conditioners and other such necessities to see if they work is a fatal but common oversight. In order to get your money’s worth, always check just to make sure. Beyond the Book

Types of Insurance Chapter 6.4 Salon Business Salon Ownership Malpractice –Protects salon owner from financial loss that can result from a stylist or employee’s negligence while performing services Property or premise –Covers salon equipment and physical location in case of natural disasters, fire, theft, or accidents –Includes replacement of lost items –Carries a liability clause that pays a claim if someone is injured on the premises

Types of Insurance Chapter 6.4 Salon Business Salon Ownership Product liability –Offers protection in the case of product damage caused to a client through misuse or use Unemployment –Required by federal law for all qualified employees –Offers compensation to laid off, displaced or eligible employees until employment found or time lapses Worker’s Compensation –State-controlled (required by law) –Paid directly to the state on a quarterly basis to cover any expense resulting from injury to an employee

Beyond the Book Types of Insurance $2,900,000,000,000 Now that’s a lot of zeros! World insurance premiums totaled $2.9 TRILLION in 2003, up nearly 12% from the previous year!

Taxes Chapter 6.4 Salon Business Salon Ownership For every dollar of social security tax paid by the employee, the salon owner must pay the same amount to the federal government. Social security is a planned savings/retirement fund for every worker in the United States. $1

Taxes Chapter 6.4 Salon Business Salon Ownership States have sales taxes on products and services. The salon owner is responsible for collecting and paying these monies to the state on a monthly or quarterly basis. Income Tax is paid on the profits (earnings) of a business.

Taxes Chapter 6.4 Salon Business Salon Ownership The salon owner must provide an annual W-2 form for each employee indicating the taxes paid for the past year. Internal Revenue Service (IRS) rules require you to register a daily log of all tips, which is income.

Beyond the Book Taxes Income tax was unconstitutional until the 16 th Amendment was passed. Unconstitutional Income Tax Unconstitutional

The financial success of a salon will be achieved when the salon’s income is significantly greater than its operating expense. Expenses & Income Chapter 6.4 Salon Business Salon Ownership Income –All payments received from clients for services performed and home care products purchased Operating Expenses –All the costs incurred in running the salon each day

Expenses & Income Chapter 6.4 Salon Business Salon Ownership Careful recordkeeping is required by law Keep all records of daily sales and services for 5 to 7 years –Serves as proof of income if audited by the IRS Failure to keep records is against the law in most areas

The average cost of operating a business (by % of income) breaks down as follows: Expenses & Income Chapter 6.4 Salon Business Salon Ownership CompensationSalaries or commissions, including payroll taxes50% RentFixed or variable12% SuppliesProfessional products used, retail products sold and miscellaneous equipment and tools 5% AdvertisingPromotion of the salon3% UtilitiesWater, electricity, gas, sanitation, phone2% InsuranceAll types1.5%

The average cost of operating a business (by % of income) breaks down as follows: Expenses & Income Chapter 6.4 Salon Business Salon Ownership Employee Benefits Education, paid vacations, pension plans or profit-sharing, health insurance 1.5% MaintenanceRepairs, laundry, cleaning and replacement equipment 2% Cost of Doing Business Accounting, legal, licenses, subscriptions, professional dues, etc. 2% Services of Debt Capital improvements, equipment and original loan expense 5% DepreciationAn account to save for replacement of equipment; creates tax credit 3% MiscellaneousAll other expenses1%

Beyond the Book Expenses and Income It costs $10 billion annually to operate the IRS and pay its 100,000 employees.

A salon should have a Policies and Procedures Handbook. Salon Philosophy, Policies and Procedures Chapter 6.4 Salon Business Salon Ownership Provides a set of rules for the owner and staff to work by Outlines the owner’s expectations of employees Should include: –Job descriptions and requirements –Client-relations policies and employee-conduct guidelines –Location of MSDS information –Guidelines on dealing with client/staff disabilities –Care of equipment –Absence and complaint policy –Causes for termination of employment Informs employee about management

Salon Philosophy, Policies and Procedures Salon Philosophy Examples: To have a relaxed, friendly, open atmosphere. To involve the client, by discussing client’s hair, skin, and nail needs and answering questions. To offer the best in quality hair, skin and nail care. Beyond the Book

Hire employees who meet your standards of honesty and professionalism Apply for a Federal Employer Identification Number before hiring employees Determine if employee is a legal citizen prior to final hiring –Request proof of valid social security card, driver’s license and/or birth certificate –Complete an I-9 form Place I-9 form and copy of proof documents in employee’s file Salon Operation Chapter 6.4 Salon Business Salon Ownership Hiring

Guaranteed set income Percentage of dollar income Guaranteed income PLUS additional payment based on number of clients Salon Operation Chapter 6.4 Salon Business Salon Ownership Compensation

Salon Operation Chapter 6.4 Salon Business Salon Ownership Pricing Determine prices by conducting a market survey before opening the salon Create a profile of desired clientele –Find reasonable rate to fit income range –Target them with advertising –Compare prices of area salons to help set rates Price is not the only reason clients select a particular salon. Salon image, work quality, stylist’s personalities and location are important to clients.

Salon Operation Chapter 6.4 Salon Business Salon Ownership Advertising Tells the public about your salon –Services performed –Quality of work –Reasons client should patronize the salon Various forms include: –Word of mouth –Printed media, television and/or radio –Style shows or fund raising events –Community involvement Plan a yearly advertising budget and stick to it

XYZ SALON Salon Operation Chapter 6.4 Salon Business Salon Ownership Advertising The best form of advertising is word of mouth.

Used in the salon to ensure products are accounted for from receipt to sale Establish guidelines to monitor specific product sales within assigned timeframe Set sales goal to provide retail income –Industry-recommended goal: for every $1 of service sell $1 of home care products –Commission ranges from 8 to 15% of stylist’s total retail sales to the stylist Salon Operation Chapter 6.4 Salon Business Salon Ownership Inventory and Product Control

1. Promote good will and client satisfaction 2. Schedule appointments in a fair and efficient way 3. Manage incoming and outgoing calls 4. Inform stylists of client arrival in the salon 5. Supervise reception area 6. Promote retail products and additional services 7. Handle pressure and complaints efficiently 8. Ensure services are all paid and documented 9. Handle messages in order of priority 10. Work with stylists to ensure punctual schedules Salon Operation Chapter 6.4 Salon Business Salon Ownership Receptionist Duties Remember that first impressions are very important! Clients often judge the salon by how phone calls are handled and how they are treated as they arrive in the salon. A poor receptionist can ruin a salon’s operations.

Salon Operation Chapter 6.4 Salon Business Salon Ownership Making Change Provide the correct denomination of bills and coins for cash transactions Troubleshoot during credit transactions Count back from the smaller denomination and move to the larger when giving change Give the client the fewest bills necessary to complete the transaction

Salon Operation Chapter 6.4 Salon Business Salon Ownership Telephone Techniques 1. Answer the phone within two rings. 2.Greet the client by saying the salon name, your name and “How may I help you?” 3. Listen carefully for the client’s name and service desired 4. Book appointment and repeat back to client the stylist requested, appointment time and date, service, and “Thank you for calling, (client’s name)” 5. If you cannot help the client personally ask the client to please hold, wait for a response and go get help 6. If a message is being left, include: date and time, recipient, caller name and number, exact message, REPEAT BACK MESSAGE to caller, and deliver message

Salon Operation Chapter 6.4 Salon Business Salon Ownership Scheduling Appointments Client Type Codes: Walk-InW RequestR TransferT Important information noted in the appointment book includes the following: Stylist nameClient name Scheduled serviceDate Appointment timeClient phone number

Beyond the Book Salon Operation Color advertisements generate 50% more inquiries than black-and-white advertisements When advertising, consider this fact: Advertisements

Identify the following as either an asset or liability. House Asset Student loan Liability Certificate of deposit Asset IRAs Asset Credit card bill Liability Car loan Liability Salon Ownership Self-Check Chapter 6.4 Salon Business Salon Ownership

Salon Ownership Self-Check ___ Assets ___ Franchise ___ Location ___ Sales tax ___ Commission ___ Salary a.Most important factor in opening a salon b.Salon owner is responsible for collecting and paying these monies to the state periodically c.Pay based on number of clients and amount of work done d.Guaranteed set income on a regular basis e.All the property you own f.Operating agreement in which a fee is paid to a parent corporation in exchange for fixtures, promotion, advertising, education and management techniques e f a b c d Chapter 6.4 Salon Business Salon Ownership

1.Subtracting your liabilities from your assets equals your: a. profit b. income c. net worth d. market need Salon Ownership Self-Check Chapter 6.4 Salon Business Salon Ownership On a sheet of paper numbered 1-9, answer the following questions.

2.A business owned by two or more persons is a: a. franchise b. partnership c. corporation d. sole proprietorship Salon Ownership Self-Check Chapter 6.4 Salon Business Salon Ownership

3.An insurance policy that protects the salon owner from financial loss that can result from an employee’s negligence while performing services on salon clients is: a. malpractice b. product liability c. unemployment d. worker’s compensation Salon Ownership Self-Check Chapter 6.4 Salon Business Salon Ownership

4.The salon owner should seek the advice of a _______ to ensure compliance with rules, regulations and laws. 5.T or F All salons require a reception area with seating, a desk for receiving clients, a dispensary, a restroom and other service areas. 6.________ _____ is a set dollar amount paid each month to the lessor. Salon Ownership Self-Check Chapter 6.4 Salon Business Salon Ownership

7._______ _____ is paid on the profits of a business. 8.T or F The financial success of a salon will be achieved when the salon’s income is less than its operating expense. 9.You should keep all records of your daily sales and services for ___ to ___ years. Salon Ownership Self-Check Chapter 6.4 Salon Business Salon Ownership

Know Chart As you correct your answers, evaluate your progress. Create a Know Chart with 2 columns. Place correct answers from the Self-Check under the “I Know” column. Then place incorrect answers under the “I Need to Study” column. K N O W C H A R T I Know: I Need to Study: Chapter 6.4 Salon Business Salon Ownership

1.Subtracting your liabilities from your assets equals your: a. profit b. income c. net worth d. market need Salon Ownership Self-Check - Income minus expenses equals profit -Payments received from client services and products purchased - Key research topic when salon planning Chapter 6.4 Salon Business Salon Ownership Now check your work.

2.A business owned by two or more persons is a: a. franchise b. partnership c. corporation d. sole proprietorship Salon Ownership Self-Check - Fee paid to parent corporation in exchange for fixtures, promotion, advertising, etc. - Owned by shareholders - Owned by one person Chapter 6.4 Salon Business Salon Ownership

3.An insurance policy that protects the salon owner from financial loss that can result from an employee’s negligence while performing services on salon clients is: a. malpractice b. product liability c. unemployment d. worker’s compensation Salon Ownership Self-Check - Offers compensation to laid off or displaced employees - State-controlled insurance required by law - Protection in case of product use of misuse Chapter 6.4 Salon Business Salon Ownership

4.The salon owner should seek the advice of a _______ to ensure compliance with rules, regulations and laws. 5.T or F All salons require a reception area with seating, a desk for receiving clients, a dispensary, a restroom and other service areas. 6.______ _____ is a set dollar amount paid each month to the lessor. Salon Ownership Self-Check lawyer Fixed rent Chapter 6.4 Salon Business Salon Ownership

7._______ _____ is paid on the profits of a business. 8.T or F The financial success of a salon will be achieved when the salon’s income is less than its operating expense. 9.You should keep all records of your daily sales and services for ___ to ___ years. Salon Ownership Self-Check The financial success of a salon will be achieved when the salon’s income is GREATER than its operating expense. 5 7 Income tax Chapter 6.4 Salon Business Salon Ownership

Self-Appraisal  The stylist planning to open a salon should assess his/her own skills to pinpoint any areas of weakness and hire employees with those areas as strengths  Preparing a personal financial statement is the first step to prove to lending agencies that you are a “good risk”  A personal financial statement contains three elements: –Assets – everything you own –Liabilities – everything you owe –Net worth – assets minus liabilities Lessons Learned Chapter 6.4 Salon Business Salon Ownership Face the Facts

Types of Salon Ownership  A sole proprietorship is a business owned by one person who receives all profits and is liable for all debt  A partnership is a business owned by two or more persons and all profits/losses are shared by partners  A corporation is a legal entity, separate from its shareholders, which is formed under legal guidelines  A franchise is an operating agreement in which a fee is paid to a parent corporation in exchange for fixtures, promotion, advertising, education and management techniques Lessons Learned Chapter 6.4 Salon Business Salon Ownership Face the Facts

Requirements of a Salon  Location is the most important factor in opening a salon business  To begin the process of salon planning, you will need to research location, market need, and cost of necessary improvements Lessons Learned Chapter 6.4 Salon Business Salon Ownership Face the Facts

Getting the Right Advice  An accountant’s task includes: informing you about types of business ownership and their tax benefits and liabilities, evaluating a rental agreement, setting up a bookkeeping system, recording and preparing tax payments, representing you in IRS audits  An insurance agent provides advice on insurance needed to safely open and operate a business  A lawyer is a legal advisor on business obligations and should also be contacted prior to signing a purchase or rental agreement  A distributor sales consultant is the link between the manufacturers of products and equipment and the salon Lessons Learned Chapter 6.4 Salon Business Salon Ownership Face the Facts

Space Requirements and Floor Plans  In general, it takes 120 to 150 square feet per stylist to create an efficient working space  Some regulating agencies have specific minimum space requirements for each stylist  All salons require a reception area with seating and a desk for receiving clients, a dispensary, a restroom and other service areas such as shampoo and drying Lessons Learned Chapter 6.4 Salon Business Salon Ownership Face the Facts

Borrowing Money  It is important that you do not sign a rental agreement until you have received your loan approval  You must be willing to invest some of your own money in the salon for an institution to grant a loan  Be sure to make all loan payments on time to avoid default, since you will be granted future loans based on your ability and willingness to do so Lessons Learned Chapter 6.4 Salon Business Salon Ownership Face the Facts

Rental Agreements  Upon obtaining a loan, you can enter into a rental agreement (lease)  As the renter or lessee, you promise to pay rent and use the property according to the agreement  A large portion of the salon expenses is the rent: –Fixed rent – set dollar amount paid each month to the lessor –Variable rent – a set dollar amount per month PLUS a percentage of the total monthly income Lessons Learned Chapter 6.4 Salon Business Salon Ownership Face the Facts

Types of Insurance  Malpractice insurance protects the salon owner from stylist negligence while performing services on clients  Property insurance covers the salon equipment and physical location in case of natural disasters, fire, theft or burglary, or accidents occurring at the business  Product liability insurance provides protection in case of damage to client through product misuse or use  Unemployment insurance offers compensation to laid off, displaced or eligible employees until employment is found or time period lapses  Worker’s compensation is state controlled and required by law to cover expenses resulting from employee injury Lessons Learned Chapter 6.4 Salon Business Salon Ownership Face the Facts

Taxes  For every dollar of social security tax paid by the employee, the salon owner must pay the same amount to the federal government  Social security is a planned savings/retirement fund for every worker in the United States  States have sales taxes on products and services; the salon owner is responsible for collecting and paying these monies to the state on a monthly or quarterly basis  Income tax is paid on the profits (earnings) of a business Lessons Learned Chapter 6.4 Salon Business Salon Ownership Face the Facts

Expenses and Income  The financial success of a salon will be achieved when the salon’s income is significantly greater than its operating expense  Income refers to all payments received from clients for services performed and home care products purchased  If the salon’s income is greater than the operating expense, the salon is operating at a profit  If the operating expense is greater than the income, the salon is operating at a loss  Careful recordkeeping is required by law – keep all records of daily sales and services for 5 to 7 years in case of an audit  Income minus expenses equal profit Lessons Learned Chapter 6.4 Salon Business Salon Ownership Face the Facts

 A salon should have a professional philosophy or standard of ethics  Create a Policies and Procedures Handbook: –Provide set of rules for the owner and staff to work by –Thoroughly outline the employment expectations –Contain job-related information –Inform the employee about management environment Lessons Learned Chapter 6.4 Salon Business Salon Ownership Salon Philosophy, Policies and Procedures Face the Facts

 Hire employees who meet your standards of honesty and professionalism  The salon owner needs to apply for a Federal Employer Identification Number before hiring employees  Choose from three common ways to pay employees: –Commission – percentage of dollar income from client services –Salary – guaranteed set income on periodic basis –Salary plus commission – set amount on regular basis plus additional payment based on service or retail sales Lessons Learned Chapter 6.4 Salon Business Salon Ownership Salon Operation Face the Facts

 Price the services at a reasonable rate to fit the income range of the clients you want to attract  The best form of advertising is word of mouth  Effective advertising methods include magazines or periodicals, television and radio, billboards, bus stop seats, fundraising events and community involvement  A strong inventory system must be in place in order for the salon to operate at a profitable margin  Setting a sales goal for home care products is essential to providing retail income to both the salon owner and the stylist  Many salons pay a commission ranging from 8 to 15% of stylist’s total retail sales to the stylist Lessons Learned Chapter 6.4 Salon Business Salon Ownership Salon Operation Face the Facts

 It is crucial that the receptionist be cheerful and able to handle most situations because clients often judge the salon by how phone calls are handled and how they are treated as they arrive in the salon  The receptionist or assigned cashier needs to ensure accuracy and efficiency, providing the correct denomination of bills and coins for cash transactions and troubleshooting during credit transactions  The most efficient method of offering change is to always give the client the fewest bills necessary to complete the transaction  When giving change, always count back from the smaller denomination, coins, and move to the larger, bills Lessons Learned Chapter 6.4 Salon Business Salon Ownership Salon Operation Face the Facts

 Telephone answering technique creates the first impression the client will have of the salon so answering procedures should be planned –Answer the phone within two rings –Greet the client with the salon name, your name, and asking how you may help them –Listen carefully for client’s name and service desired –Book appointment and repeat back to client stylist requested, time and date of appointment, exact service, and thank them –If you cannot help the client personally, ask them if they would hold, wait for a response, place line on hold, and go get help –If message is being left include date, time, message recipient, caller name, caller number, exact message Lessons Learned Chapter 6.4 Salon Business Salon Ownership Salon Operation Face the Facts

Chapter 6.4 Salon Business Salon Ownership IT’S 2 U! Imagine you are opening a new salon and plan to have 9 stylists. What would be the approximate number of square feet you need based on the minimum space requirement? Also, what would your projected lease costs be if space in your area leases for about $18.00 per square foot?

Answer IT’S 2 U! Chapter 6.4 Salon Business Salon Ownership 120 square feet x 9 stylists = 1,080 square feet 1,080 square feet x $18.00 = $19,440

Chapter 6.5 Salon Business Salon Retailing Selling Professional Products Closing the Sale Buyer Types Follow up SALON RETAILING Salon Business Effective Displays

Salon Retailing Which is the better display? Display 2 is the better display because it is well organized, clean, and the bottles are easy to find and identify.

Word Wall BINGO C TUBOR SABOR WTLTN OSNOI Types of Buyers B 15B 12I 25N 34N 31G 53G 75 B 15 B 12 I 25 N 34 N 31 G 53 G 75 O 70  Stubborn

Word Wall BINGO B ARGOR SAAIN WTLTN OSNOI Types of Buyers  Stubborn B 8B 12I 25N 34G 53O 75 B 8 B 12 I 25 N 34 G 53 O 75 N 31  Bargain

Word Wall BINGO E MOPOR RTRP TILTI NONAL Types of Buyers  Stubborn  Bargain B 8B 12I 25I 21I 27I 29N 42G 60O 68 B 8 B 12 I 25 I 21 I 27 I 29 N 42 G 60 O 68  Emotional

Word Wall BINGO G O READY L S Types of Buyers  Stubborn  Bargain  Emotional B 15 I 21 N 31 G 53 O 75  Ready

Word Wall BINGO GL OO REGDY IL CAL Types of Buyers  Stubborn  Bargain  Emotional  Ready N 45 N 34 N 31 N 37 N 42 G 60 O 68  Logical

Selling Chapter 6.5 Salon Business Salon Retailing Exchanging service for product, money for expertise Defined best as the art of professional recommendation Sell two important things as a professional “recommender”: 1.Your artistic abilities, services, credibility and professionalism 2.Retail products, grooming aids and implements

Upselling refers to increasing the client’s ticket by adding retail products as well as other salon services Chapter 6.5 Salon Business Salon Retailing Successful salons are those whose staff members are effectively prescribing their services and a quality line of retail products Professional product recommendations will help you establish a clientele that will remain loyal to you and to the products you recommend Selling Prescribing

Chapter 6.5 Salon Business Salon Retailing Selling Knowledge & Confidence Become an invaluable asset to any salon staff by: Listening to clients Recognizing their needs Offering sound advice Recommending the best products for home use Communicating professionally while performing services To promote retail products effectively you must have knowledge of each item and confidence in yourself and the products you recommend.

Beyond the Book Selling Confidence is very important in the workplace. Your clients, co-workers and boss can all benefit from a personal boost in confidence.

Professional Products Chapter 6.5 Salon Business Salon Retailing Features and Benefits FEATURESBENEFITS Characteristics of the product. Things the products does to enhance appearance or improve the condition of the client’s hair, skin or nails. 1.Size – bottle is small 2.Ingredients – product contains protein 3.Concentrated formula – small amount required 1.Perfect for traveling 2.Reconditioning effect 3.Economical purchase

Let the client hold, smell or sample the product. Chapter 6.5 Salon Business Salon Retailing Personal referrals and recommendations of retail products provide the most effective advertising. Professional Products Involve the Client The more the senses are used in examining the product, the more involved the client becomes with the product and the more personally he or she will identify with that item.

As new products are introduced in the salon, think of the clients who would benefit from their use. Chapter 6.5 Salon Business Salon Retailing Professional Products When those clients come in for a visit, present the products’ features and benefits and suggest that they try them at home. Suggest New Products Having been “sold” on a product once and having used it and liked the results, clients will more than likely continue to buy products on their own initiative, leaving you time to teach new clients about home grooming care.

Beyond the Book Professional Products Involve the Client People recall smells with 65% accuracy after a year, while the visual recall of images sinks to about 50% after only three months.

Build up to it beginning at the recommendation process Reinforce the fact that you expect the client to purchase the product by using: –A positive attitude –Knowledge of the product –An explanation of benefits & proper use –A customized treatment program for the client Prove to clients the benefits of the product are worth the investment Closing the Sale Chapter 6.5 Salon Business Salon Retailing

Beyond the Book Closing the Sale When closing the sale do NOT start looking around and fidgeting. It distracts the customer and appears to them that you are uncomfortable selling that product.

The Ready Buyer Open-minded Takes a chance on new products Buyer Types Chapter 6.5 Salon Business Salon Retailing Identify Buyers Be sure to keep this buyer aware of any new products the salon is offering.

Buyer Types Chapter 6.5 Salon Business Salon Retailing Identify Buyers The Logical Buyer Wants to know the facts Thinks carefully about a purchase without regard for who else likes/uses the product Explain what a product will do, how it should be used, then supply him/her with available literature.

Buyer Types Chapter 6.5 Salon Business Salon Retailing Identify Buyers Describe how the product will improve cosmetic appearance, show results with proper use, and demonstrate the product’s use for the customer. The Emotional Buyer Purchases more on personal reasons than facts Reacts to color of packaging or aroma of product

Buyer Types Chapter 6.5 Salon Business Salon Retailing Identify Buyers The Bargain Buyer Wants to save money at all costs Not as interested in quality of product as in its price Be sure to keep this buyer aware of any sale items or salon promotions offered, but do not push the client.

Buyer Types Chapter 6.5 Salon Business Salon Retailing Offer all the facts, describe results. If the client still is not convinced, send product literature home or offer a complimentary trial size if available. The Stubborn Buyer Puts up a struggle Strong desire to debate with you Identify Buyers Note that these buyer types are only generalizations and can be found in several combinations.

Profit / Gain Desire to look their best Buyer Types Chapter 6.5 Salon Business Salon Retailing What motivates buyers? Need What Motivates Buyers Impulse

Beyond the Book Buyer Types Most people buy to attract praise and to be in style.

Benefits of written special instructions for a client’s home hair care program: Reinforce professionalism of services and salon Clarify product use for clients Remind clients to do the treatments Help clients remember suggested products Help receptionist with retail recommendations Offer referral opportunities Follow Up Chapter 6.5 Salon Business Salon Retailing

Follow Up Chapter 6.5 Salon Business Salon Retailing Keep in mind that recommending a product one time doesn’t guarantee that the client will continue using that item. The stylist should also pay particular attention to seasonal weather changes and how these affect the client. Examine the condition of each client’s hair, skin or nails several weeks after you have sold them the products.

Beyond the Book Follow Up A comprehensive follow-up plan not only requires planning but a complete understanding of your client and the entire sales process as well. You will also need to know how to use various communication tools in your follow-up effort, such as brochures and letters.

Organize stock Price the merchandise Ensure quality control Create promotional displays Maintain inventory control Learn from the display experts Effective Displays Chapter 6.5 Salon Business Salon Retailing Retail Display Guidelines

Effective Displays Chapter 6.5 Salon Business Salon Retailing Remember to allocate adequate floor space for retail merchandise. Display shelves for retail products should blend attractively with the salon décor, but should not dissapear from sight because of their bland appearance.

Beyond the Book Effective Displays Forty-two percent (42%) of brand purchases in stores are made when a display is present for that brand.

Indicate whether the word describes a feature or a benefit. Small bottle feature Economical purchase benefit Ingredients feature Concentrated formula feature Perfect for traveling benefit Reconditioning effect benefit Salon Retailing Self-Check Chapter 6.5 Salon Business Salon Retailing

1.Successful selling could best be defined as the art of professional ______________. 2.T or F Creating need for a product means you will be making clients aware of a product that will benefit them. 3.All clients share the similar motivations for buying, including need, desire to look good, profit or gain and ________. Salon Retailing Self-Check On a sheet of paper numbered 1-8, answer the following questions. Chapter 6.5 Salon Business Salon Retailing

Salon Retailing Self-Check ___ 4. Ready buyer ___ 5. Logical buyer ___ 6. Emotional buyer ___ 7. Bargain buyer ___ 8. Stubborn buyer a.Bases purchases more on personal reasons than facts b.Wants to save money at all costs and is not as interested in quality of product as price c.Open-minded and will take a chance on new products d.Puts up a struggle and has a strong desire to debate with you e.Wants to know the facts about a product Match the following questions with the correct answer. Chapter 6.5 Salon Business Salon Retailing

Know Chart As you correct your answers, evaluate your progress. Create a Know Chart with 2 columns. Place correct answers from the Self-Check under the “I Know” column. Then place incorrect answers under the “I Need to Study” column. K N O W C H A R T I Know: I Need to Study: Chapter 6.5 Salon Business Salon Retailing

1.Successful selling could best be defined as the art of professional __________________. 2.T or F Creating need for a product means you will be making clients aware of a product that will benefit them. 3.All clients share the similar motivations for buying, including need, desire to look good, profit or gain and ________. Salon Retailing Self-Check Now check your work. Chapter 6.5 Salon Business Salon Retailing recommendation impulse

Salon Retailing Self-Check ___ 4. Ready buyer ___ 5. Logical buyer ___ 6. Emotional buyer ___ 7. Bargain buyer ___ 8. Stubborn buyer a.Bases purchases more on personal reasons than facts b.Wants to save money at all costs and is not as interested in quality of product as price c.Open-minded and will take a chance on new products d.Puts up a struggle and has a strong desire to debate with you e.Wants to know the facts about a product Now check your work. c e a b d Chapter 6.5 Salon Business Salon Retailing

Selling  Successful selling could best be defined as the art of professional recommendation  A logical extension of your salon service is prescribing the kind of quality products for use at home through upselling  To promote retail products effectively you must have confidence in yourself and the products you recommend Chapter 6.5 Salon Business Salon Retailing Lessons Learned Face the Facts

Chapter 6.5 Salon Business Salon Retailing Lessons Learned Professional Products  It is your responsibility as a professional to familiarize yourself with the finest products for hair, skin and nails  Features of a product are its characteristics, which might include the size of the container, the aroma, or a specific ingredient  Benefits of a product are things that the product will do to enhance the appearance or improve the condition of the client’s hair, skin or nails  Personal referrals and recommendations of retail products provide your most effective advertising Face the Facts

Chapter 6.5 Salon Business Salon Retailing Lessons Learned Closing the Sale  The conclusion of a retail sale is something that you build up to from the beginning of the recommendation process  Your positive attitude, knowledge of the product, explanation of the product benefits and how it is to be used, and your customized treatment program for the client all reinforce the fact that you expect the client to purchase the product  If the product’s features and benefits have been clearly and personally related to the client’s needs, price will be less important Face the Facts

Chapter 6.5 Salon Business Salon Retailing Buyer Types  Understanding different types of potential customers and what motivates them to buy will help in closing the sale  Identify buyers: –Ready –Logical –Emotional –Bargain –Stubborn  All clients share similar motivations for buying, including need, desire to look good, profit or gain and impulse Lessons Learned Face the Facts

Chapter 6.5 Salon Business Salon Retailing Follow Up  To avoid confusion and to reinforce your recommendation of the home hair care program, you might take a product brochure and write instructions on the back regarding frequency of use  Benefits of written special instructions: –Reinforce professionalism of service and salon –Clarify product use for clients –Remind client to do the treatments –Help clients remember the products suggested –Help receptionist with retail recommendations –Offer referral opportunities Lessons Learned Face the Facts

Chapter 6.5 Salon Business Salon Retailing Effective Displays  Allocate adequate floor space for retail merchandise  Display shelves for retail products, known as stock inventory, should blend attractively with the salon décor but shouldn’t disappear from sight because of their bland appearance  Retail display guidelines: –Organize stock –Price the merchandise –Ensure quality control –Create promotional displays –Maintain inventory control –Learn from the display experts Lessons Learned Face the Facts

IT’S 2 U! Chapter 6.5 Salon Business Salon Retailing You have just completed a cut and style service on a very satisfied client. You have recommended that she purchase the straightening balm you used when styling her hair. She questions you about alternative products that may be cheaper or work to the same effect. After rehearsing the product’s benefits, she is still debating with you on whether it is a good purchase. What type of buyer are you dealing with and what is your next approach to closing the sale with this client?

IT’S 2 U! Answers Chapter 6.5 Salon Business Salon Retailing The client may be a combination of a bargain buyer and a stubborn buyer. Offer the client all the facts and describe the results. If she is still not convinced, send product literature home or offer a complimentary trial size if available. Be sure to keep this buyer aware of any sale items or sale promotions offered. Do not push the client.

On a sheet of paper numbered 1-10, answer the following questions. 1. One of the best forms of advertising is a: a.neon sign b.local paper c.pleased client d.window display Salon Business Self-Test Chapter 6 Salon Business

2.A rental system in which the exact monthly rental payment is known is called a: a.fixed rent b.variable rent c.fixed liability d.variable expense Salon Business Self-Test Chapter 6 Salon Business

3.On the average, the largest expense in operating a salon is considered to be: a.rent b.utilities c.supplies d.salaries or commissions Salon Business Self-Test Chapter 6 Salon Business

4.An example of a liability on a financial statement would be: a.any earned tips b.sales tax receipts c.last week’s income d.the balance due on your loan Salon Business Self-Test Chapter 6 Salon Business

5.Salary, paid holidays, bonuses and insurance are all examples of: a.assets b.liabilities c.job benefits d.job responsibilities Salon Business Self-Test Chapter 6 Salon Business

6.Which of the following businesses is owned by shareholders and formed under legal guidelines? a.franchise b.corporation c.partnership d.sole proprietorship Salon Business Self-Test Chapter 6 Salon Business

7.Location is the most important factor in: a.opening a salon b.choosing a distributor c.choosing your lawyer d.choosing your accountant Salon Business Self-Test Chapter 6 Salon Business

8.Worker’s Compensation Insurance is needed to protect the: a.salon b.inventory c.customers d.employee Salon Business Self-Test Chapter 6 Salon Business

9.A bargain buyer is most interested in: a.product ingredients b.low price c.product name d.spending mney Salon Business Self-Test Chapter 6 Salon Business

10.To help keep an accurate control of supplies, it is important to maintain an organized: a.service record b.security system c.inventory system d.appointment book Salon Business Self-Test Chapter 6 Salon Business

Time to check the self-test 1. c. pleased client 2. a. fixed rent 3. d. salaries and commissions 4. d. the balance on your loan 5. c. job benefits Salon Business Self-Test Chapter 6 Salon Business

Time to check the self-test 6.b. corporation 7.a. opening a salon 8.d. employee 9.b. low price 10.c. inventory system Salon Business Self-Test Chapter 6 Salon Business

Chapter 6: Salon Business The Beauty Industry Job Search Salon Operation Salon Ownership Salon Retailing In conclusion... The Beauty Industry Job Search Professional Relations Salon Ownership Salon Retailing