1. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 32 The Salon Business

2. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. WHY SHOULD WE STUDY SALON BUSINESS? As you become more proficient in your craft and your ability to manage yourself and others, you may decide to become an independent booth renter or even a salon owner. In fact, most owners are former stylists. Even if you spend your entire career as an employee of someone else’s salon, you should have a familiarity of the rules of business that affect the salon.

3. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. To become a successful entrepreneur, you will need to attract employees and clients to your business and maintain their loyalty over long periods of time. Even if you think you will be involved in the artistic aspect of salons forever, business knowledge will serve you well in managing your career and professional finances, as well as your business practices. WHY SHOULD WE STUDY SALON BUSINESS?

4. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Going into Business: Booth Rental Also known as chair rental; now practiced in over 50 percent of all salons. Pennsylvania prohibits booth renting, and New Jersey does not recognize it as an acceptable method of doing business. You should be booked at least 70 percent of the time to consider booth rental.

5. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.  Own clientele  Paying flat fee for rent  Keeping records  Maintaining insurance  Complying with IRS  Using own phone system  Collecting service fees  Purchasing supplies  Maintaining inventory  Advertising, incentives  Paying for advanced education  Working in independent atmosphere  Adhering to state laws and regulations Stylists is responsible for:

6. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Opening Your Own Salon Be prepared to extensively research the idea of opening your own salon before making any final decisions. VISION STATEMENT: A long-term picture of what the business is to become and what it will look like when it gets there. MISSION STATEMENT: A description of the key strategic influences of the business, such as the market it will serve, the kinds of services it will offer, and the quality of those services. GOALS: Benchmarks to help realize the business's mission and vision.

7. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Opening Your Own Salon (continued) Create a business timeline … Year 1: Determine and complete all aspects of starting a business. Years 2 – 5: Tend to business so it is profitable. Years 5 – 10: If successful, add locations or expand business scope. Years 11 – 20: Move from cosmetologist to full-time manager. Over 20 years: Consider selling business or taking on a junior partner.

8. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Consider business feasibility. Think about what your business can do or offer. Choose a business name. The name should explain what your business is and what sets it apart. Choose a location. Base the location on primary clientele. It should have good visibility, high traffic, easy access, sufficient parking, and access for the mobility impaired.

9. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Location, Location, Location

10. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Opening Your Own Salon WRITTEN AGREEMENTS: Documents that govern the opening of the salon, including leases, vendor contracts, employee contracts, and more. BUSINESS REGULATIONS AND LAWS: All applicable local, state, and federal laws must be complied with. Such laws affect zoning, OSHA, licenses to operate, and so on. INSURANCE: When buying, include areas like malpractice, liability, fire, burglary, theft, and business interruption.

11. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. SALON OPERATIONS: The ongoing, recurring processes or activities involved in running a business for the purpose of producing income and value. RECORD KEEPING: The act of maintaining accurate and complete records of all financial activities in your business. SALON POLICIES: Rules and policies adopted by the salon to ensure that all clients and associates are treated fairly and consistently. Even small salons and booth renters should have salon policies in place. USEFUL RESOURCES: www.entrepreneur.com; www.sbaonline.sba.gov; www.score.org; www.sba.govwww.entrepreneur.com www.sbaonline.sba.govwww.score.orgwww.sba.gov

12. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. ACTIVITY Think back to the goals you set when you first started in cosmetology. Did you want to own your own salon someday? Divide into groups and brainstorm the pros and cons of salon ownership. Make two columns and list the advantages and disadvantages of owning a salon or renting a booth. Prepare to share. Note: If you want to go into business for yourselves you will basically have two options: opening your own salon or renting a booth in and existing facility.

13. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Types of Ownership Proprietor is owner and manager. Proprietor determines policy. Proprietor receives profits and bears all losses. INDIVIDUAL OWNERSHIP

14. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. More capital is available. Ability and experience are combined. Profits are shared. Partners assume each other’s unlimited liability for debt. Types of Ownership (continued) PARTNERSHIP (owned by two or more parties)

15. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Capital raised by issuing stock. Stockholders own interest. Corporate formalities required. Income tax limited to salary. Unemployment insurance required. Types of Ownership (continued) CORPORATION

16. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Franchisor: existing successful business Franchisee: one who contracts with franchisor for use of name, brand, and policies Types of Ownership (continued) FRANCHISE OWNERSHIP

17. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Business Plan Regardless of the type of salon you plan to own, it is imperative to have a thorough and well-researched business plan, a written plan of a business as it is seen in the present and envisioned in the future, to follow throughout the entire process of starting your own business. Many, books, classes, DVDs, and Web sites offer much more detailed information than provided here, but below is a sampling of the kind of information and material that should be included in a business plan.

18. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. EXECUTIVE SUMMARY: Summarizes your plan and states your objectives. VISION STATEMENT: A long-term picture of what the business is to become and what it will look like when it gets there. MISSION STATEMENT: A description of the key strategic influences of the business, such as the market it will serve, the kinds of services it will offer, and the quality of those services. ORGANIZATIONAL PLAN: Outlines employee and management levels and also describes how the business will run administratively.

19. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. MARKETING PLAN: Outlines all of the research regarding the clients your business will target and their needs, wants, and habits. FINANCIAL DOCUMENTS: Includes the projected financial statements, actual (historical) statements, and financial statement analysis. SUPPORTING DOCUMENTS: Includes owner's resume, personal financial information, legal contracts, and any other agreements. SALON POLICIES: Even small salons and booth renters should have policies that they adhere to. These ensure that all clients and employees are treated fairly and consistently.

20. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Purchasing Existing Salon Financial audit to determine value Written purchase/sales agreement Signed statement of inventory Investigation of loan defaults Confirmed identity of owners Purchasing an established salon could be an excellent opportunity, but, as with anything else, you have to look at all sides of the picture. Here are some things to consider and, when necessary, to discuss with an attorney before purchasing a salon.

21. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Use of salon’s name and reputation Disclosure of client information Disclosure of facility condition Non-compete agreement Employee agreements Purchasing Existing Salon (continued)

22. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Drawing Up a Lease Owning your own business does not necessarily mean that you own the building that houses your business (although, some people do). When renting or leasing space, you must have an agreement between yourself and the building’s owner that has been well thought out and well written. The lease should specify clearly who owns what and who is responsible for which repairs and expenses. You should also secure the following:

23. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Exemption of fixtures or appliances that might be attached to the salon so that they can be removed without violating the lease. Agreement about necessary renovations and repairs, such as painting, plumbing, fixtures, and electrical installation. Option from the landlord that allows you to assign the lease to another person. In this way, obligations for the payment of rent are kept separate from the responsibilities of operating the business, should you decide to bring in another lessee.

24. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Protecting Your Business Ensure that your business has adequate locks, a fire alarm system, and a burglar alarm system. Purchase liability, fire, malpractice, and burglary insurance, and do not allow these policies to lapse while you are in business. Become thoroughly familiar with all laws governing cosmetology and nail technology and with the sanitary codes of your city and state Always check with your regulatory agency if you have any questions about a law or regulation.

25. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Keep accurate records of the number of employees, their salaries, lengths of employment, and Social Security numbers, as required by various state and federal laws that monitor the social welfare of workers. Know the law. Ignorance of the law is no excuse for violating it. Always check with your regulatory agency if you have any questions about a law or regulation.

26. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Business Operation Excellent business sense Knowledge of sound business principles

27. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Business Management – What does it mean to you? In groups write out what you think these categories mean? ACTIVITY

28. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Business Management

29. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. PROPER PRICING Knowing your demographics will help with how you price your services. Keeping in mind a salon in Walmart would not get much business if they charged $50.00 for a haircut. gement (continued)

30. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Allocation of Funds A good accountant and accounting system are indispensable. Good business operations require a simple and efficient record system.

31. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Proper business records are necessary to meet the requirements of local, state, and federal laws regarding taxes and employees. Records are of value only if they are correct, concise, and complete. Proper bookkeeping methods include keeping an accurate record of all income and expenses. Income is usually classified as receipts from services and retail sales. Expenses include rent, utilities, insurance, salaries, advertising, equipment, and repairs.

32. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Retain check stubs, canceled checks, receipts, and invoices. A professional accountant or a full-charge bookkeeper is recommended to help keep records accurate. A full-charge bookkeeper is someone who is trained to do everything from record sales and do payroll to generating a profit-and-loss statement.

33. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Purchase Records An area that should be closely monitored is the purchase of inventory and supplies. Purchase records help maintain a perpetual inventory, which prevents overstocking or shortage of needed supplies, and also alerts you to any incidents of petty theft by employees. These records also help establish the net worth of the business at the end of the year. Maintain perpetual inventory Prevent overstock/shortages Monitor pilfering Establish net worth of business

34. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Supplies Keep a running inventory of all supplies, and classify them according to their use and retail value. Those to be used in the daily business operation are consumption or consumable supplies. Those to be sold to clients are retail supplies.

35. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Service Records Always keep service records or client consultation cards that describe treatments given and merchandise sold to each client. Either a card file system or software program will serve this purpose. (Hard copy or electronic file) All service records should include the name and address of the client, the date of each purchase or service, the amount charged, products used, and results obtained. Clients’ preferences and tastes should also be noted.

36. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Operating a Successful Salon The only way to guarantee that you will stay in business and have a prosperous salon is to take excellent care of your clients. Clients visiting your salon should feel completely satisfied with the services you offer them and always look forward to their next visit. To accomplish this, your salon must be physically attractive, well organized, smoothly run, and, above all, sparkling clean.

37. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. 1.Planning the salon’s layout 2.Hiring skilled and educated personnel 3.Properly managing the front desk 4.Efficiently using the telephone 5.Effectively advertising salon services. The five main elements of a successful salon are…

38. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Salon Layout One of the most exciting opportunities ahead of you is planning and constructing the best physical layout for the type of nail salon you envision. Maximum efficiency should be the primary concern.

39. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. However, if you are opening a high-end, full-service salon, or a luxurious day spa where clients expect the quality of the service to match the environment, you will want to plan for more room in the waiting area. You may, in fact, choose to have several areas in which clients can lounge between services and enjoy beverages or light snacks. Some upscale salons feature small coffee bars that lend an air of sophistication to the environment.

40. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Others offer quiet, private areas where clients can pursue activities such as phone work or laptop use between services. The retail area should be spacious, inviting, well lit, and of any size that is appropriate for the number of products that the salon carries. Layout is crucial to the smooth operation of a salon. After you have decided on the type of salon that you wish to run, seek the advice of an architect with plenty of experience in designing salons. For renovations, a professional equipment and furniture supplier will be able to help you.

41. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.

42. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Layout for a Typical Salon

43. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Hiring Considerations The size of your salon will determine the of your staff, also referred to as personnel. Large salons and spas require nail cosmetologists, receptionists, and management specialists and can include a variety of other specialty consultants. Smaller salons have some combination of these personnel who perform more than one type of service. The success of a salon depends on the quality of the work done by the staff.

44. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. When interviewing potential employees, consider the following: Level of skill. What is their educational background? When was the last time they attended an educational event? Personal grooming. Do they look like you would want their advice about personal grooming? Image as it relates to the salon. Are they too progressive or too conservative for your environment? Overall attitude. Do they seem more negative than positive in their responses to your questions? Communication skills. Are they able to understand your questions? Can you understand their responses? Making good hiring decisions is crucial; undoing bad hiring decisions is painful to all involved and can be more complicated than you might expect.

45. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Payroll and Employee Benefits To have a successful business, one in which everyone feels appreciated and is happy to work hard and service clients, you must be willing to share your success with your staff whenever it is financially feasible to do so. You can do this in a number of ways. Make it your top priority to meet your payroll obligations. In the allotment of funds, this comes first.

46. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Whenever possible, offer hardworking and loyal employees as many benefits as possible. Either cover the cost of the benefits, or at least make them available to employees and allow them to decide if they can cover the cost themselves. Provide staff members with a schedule of employee evaluations. Make it clear what is expected of them if they are to receive pay increases. Create and stay with a tipping policy. It is a good idea for both your employees and your clients to know exactly what is expected.

47. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Put your entire compensation structure or plan in writing and discuss it with employees. The more they understand how the compensation plan works, the easier it will be for them to understand what goals or milestones they may have to achieve in order to increase their salary. Create incentives by giving your staff opportunities to earn more money, prizes, or tickets to educational events and trade shows. Create salon policies and stick to them. Everyone in the salon should be governed by the same rules, including you!

48. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. ACTIVITY: Group students into teams (employees) and have them brainstorm to develop what they believe to be an effective compensation plan or the wildcat salon.

49. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Tips for Managing Personnel As a new salon owner, one of your most difficult tasks will be to manage your staff. But this can also be very rewarding. If you are good at managing others, you can make a positive impact on their lives and their ability to earn a living. If managing people does not come naturally, do not despair. People can learn how to manage other people, just as they learn how to drive a car or do nail services.

50. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Keep in mind that managing others is a serious job. Whether it comes naturally to you or not, it takes time to become comfortable with the role. Here are some effective tips for managing personnel. Be honest with employees. Expect the best. Be a mentor. Share information. Follow the rules. Be reliable. Teach staff what you know.

51. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. There are many great books, both in and out of the professional salon industry, that you can use as resources for managing employees and staff. Spend an afternoon online or at your local bookstore researching the topic and purchasing a variety of products that will educate and inform you. Once you have a broad base of information, you will be able to select a technique or style that best suits your personality and that of your salon. The UCLA Anderson School of Management offers an Executive Salon Management Program. Go to www.uclaexeced.com for information.www.uclaexeced.com

52. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. The Front Desk THE FRONT DESK. Also known as the “operations center.” RECEPTION AREA: First impression of salon is created here. Phone system is centered here. Attractive, appealing Comfortable Retail displayed Stocked with business cards Prices prominently displayed, or price menu provided to each client

53. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. RECEPTIONIST: The “quarterback” of the salon. (NOTE: Ask students why the receptionist might be compared to a football team's quarterback.) Should be pleasant, greet clients with smile and by name, create goodwill, establish favorable impressions, and have thorough knowledge of retail products. The receptionist can be called upon to perform other duties during slow periods, such as straightening the reception area, maintaining inventory, and doing daily reports. The following elements are essential: Neat appearance Knowledge of services offered Unlimited patience for dealing with both clients and salon personnel

54. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. BOOKING APPOINTMENTS: Should be done with care. Services are sold in terms of time. Clients should never have to wait. All salon employees may be required to answer the phone and book appointments. APPOINTMENT BOOK: Essential for effective scheduling and time management. May be a book or a computer system.

55. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Good Telephone Usage Have a pleasant telephone voice. Speak clearly, use correct grammar, and put a “smile” in your voice. Show interest and concern. Be polite, respectful, and courteous. Be tactful. Don’t say anything to irritate the caller.

56. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Incoming Calls Offer a cheerful clear greeting. Say, “Good morning/afternoon. [Salon Name] May I help you?” OR “Thank you for calling [Salon Name]. This is Jane. How may I help you?” Answer promptly. Answer by second ring and take calls in order received. Provide requested information. If answer is unknown, offer to call back promptly. Do not carry on a side conversation while on the phone.

57. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Booking by Phone Take down client’s first and last name, phone number, and service booked. Know services, products, and costs. Know salon personnel’s skills. Be fair when making assignments. Try, for example, not to schedule six services with one stylist and two with another, except by request. If requested stylist is unavailable: Suggest another time. Suggest another stylist. Offer to call if there is a cancellation.

58. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Handling Complaints by Phone Maintain self-control. Be tactful and courteous. Employ active listening skills. Maintain a sympathetic tone. Don’t interrupt. Resolve quickly and effectively.

59. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Building Your Business Promote salon favorably via newspaper, radio, stationery, press releases, charity events, billboards, and so on. Attract and hold attention is to create a desire for your services or products. Referrals are the best form of advertising. Develop ads or outsource. Annual budget is 3 percent of gross income. Plan ahead for holidays

60. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Methods of Advertising Newspapers Direct mail Classified/yellow pages E-mail newsletters Web site offering Giveaway promotional items Window display

61. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Methods of Advertising (continued) Radio. More expensive but effective. Television. High impact but expensive. Community outreach. Make public appearances at women’s and men’s clubs, church functions, political gatherings, charitable affairs, and so on. Client referrals. Provide incentives to clients for sending referrals, such as discounts on future services. In-salon videos that promote your services and products while clients wait

62. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Selling in the Salon Selling is an important responsibility of the licensed professional. Much of the salon’s success revolves around the sale of additional salon services and retail products. Adding services or retail products to each ticket means additional revenue. Everyone benefits!

63. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Summary and Review Remember that there is much more to owning and managing a successful salon than just having excellent technical skills. Starting your own business is an enormous responsibility and should not be taken lightly. There are numerous records to be kept and laws that must be followed. In addition, there are many considerations in establishing a business including selecting an efficient salon layout, inventory control, payroll record maintenance, filing accurate tax returns, and maintaining a loyal, happy clientele.

64. © Copyright 2012 Milady, a part of Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. 4. Describe the types of salon ownership. 5. List and describe the categories of information that should be included in a business plan. 6. Why is it important to keep good records, and what types of records should be kept? 1.Name and describe the two most common options for going into business for yourself. 2.What responsibilities does a booth renter assume? What are the disadvantages of booth renting? 3.List at least three factors that potential salon owners should consider before opening a business.