1. Chapter 32
The Salon Business

2. Being both a great artist and a successful business person=
The greater you chances
of success
Entire books have been
written
Following information is
a general overview
Weymouth.ac.uk

3. Become your own boss: Own Serious undertaking-requires:
(Booth rental-not legal in PA. )
Serious undertaking-requires:
*significant financial investment
*strong line of credit
Most owners work behind the chair
*time consuming
*no guarantee of profit
*definitely not for everyone

4. Opening your Own Salon
Huge undertaking
*financially
*physically
*creatively
*mentally
Face challenges that are complex and unfamiliar

5. before opening your doors decide:
*what products to carry
*what types of marketing and promotions
*best methods and philosophy for running the business
*whom to hire
Consider the following basic issues and perform basic tasks

6. Create Your Brand Identity
Simple concepts-use as building blocks
Read bullets
Will solidify your concepts and serve as references for inspiration,
guidance, and a reminder

7. Create a Vision and Mission Statement for the Business Goals
Vision Statement: long-term picture of what the business is to become and what it will look like when it gets there
Mission Statement: actions of the organization
*overall goals
*core values for decision making
*lays the foundation-company’s strategies

8. Goals: set of benchmarks that help you to
Goals: set of benchmarks that help you to realize your mission and your vision
Set realistic short-term and long-term goals

9. Create a Business Timeline
Year One:
*determine and complete all aspects of starting the business
Years Two-Five:
*tending to the business, its clientele, employees for growing and expanding

10. Years Five-Ten-if successfully achieved:
*Add more locations
* expand the scope of the business
*construction of larger space
Years Eleven to Twenty:
*move from being a working cosmetologist into a full-time manager

11. Years Twenty Onward:
*consider selling or
*changing it in some way (junior partner)

12. Determining Business Feasibility
Means addressing certain practical issues
*do you have a special skill or talent?
(sets your business apart)
*does the town offer the type of clientele you want (products and services you want to offer)?
*how much money is needed to open?
*is funding available?

13. Choose a Business Name
The name:
*explains what it is
*identify characteristics (sets apart)
*influences how clients perceive the business
*creates a picture in client’s mind

14. Choose a Location
Good visibility
High traffic
Easy access
Sufficient parking
Handicap access

15. Many written agreements and documents needed *leases
*vendor contracts
*employee contracts
*and more
For legal purposes
*who does what
*what is given in return
Must be able to read and understand them

16. Business Plan
written description of your business ~today
~future (next 5 years)
Agreement with yourself-not legally binding
However, needed to obtain
financing

17. Includes description: ~business ~services provided ~demographics
*race, age, income, educational
attainment
~salaries and benefits
~pricing structure
Interstellar-solutions.co.uk

18. Expenses
~equipment ~ supplies
~ repairs ~ advertising
~taxes ~insurances
~projected income and overhead expenses (up to 5 year)

19. Business Regulations Laws
comply with all local, state, and federal regulations and laws
contact local authorities
~business licenses
~other regulations
*zoning
*business inspections

20. Comply with all federal Occupational Safety and Health Administration (OSHA)
Safety Data Sheets
(SDS)
Federal laws on hiring/firing
*payment of benefits
*social security
*unemployment
*workplace behavior

21. Insurance
must purchase insurance
~malpractice
~property liability
~ fire
~burglary
~ theft
~business interruption
Must have disability policies

22. Salon Operation
Running of the business
Record Keeping
Maintain accurate and complete records of all financial activities
Salon Policies
Rules and regulations
Everyone is treated fairly and consistently

23. Types of Salon Owners
Individual ownership:
Make your own rules
Meet all duties and obligations of running a business
Sole proprietor is the owner and manager
determines policies
assumes expenses
receives profits/bears all losses

24. Partnership
more opportunity for increase investment and growth
*can be magical or a disastrous
Ex. Urban Edge (was in Quakertown)
John Paul Mitchell Systems

25. Partnership:
Two or more people (not always equal)
~more capital or money
~pool skills and talents
~share work
~responsibilities
~decision-making
~must assume one another’s liability or debts

26. Corporation: ownership controlled by one or more stockholders
Incorporating
*protects your personal assets
*saves money in taxes
*greater business flexibility
*makes raising capitol easier

27. Characteristics of corporations:
Raise capitol by issuing stock certificates or shares
Stockholders-has ownership interest
Sole stockholder or many stockholders

28. Meetings required to maintain corporate status
Income tax is limited to the salary you draw-not the profits
Costs more to set up
*formation fees
*filing fees
*annual state fees
Required to pay unemployment insurance taxes on salary (sole proprietor or partner do not)

29. Franchise Ownership
Contractual relationship
Operating under the franchisor’s trade name in exchange for a fee
Under the franchisor’s guidance and stipulations

30. Advantages:
Known name and brand recognition
Franchisor does most of the marketing
Protected territories

31. Concerns:
Agreements in what you can and cannot do
No guarantee of making a profit
Be sure to research
Have a attorney read the contract/explain
Must pay the fee (profitable or not)

32. Business Plan
Includes:
Executive Summary
Vision Statement
Mission Statement
Organizational Plan
Marketing Plan
Financial Documents
Supporting Documents
Salon Policies

33. Purchasing an Established Salon
excellent opportunity/look at all sides of the picture
Seek professional assistance from an accountant and a business lawyer

34. Agreement should include:
Financial audit
*actual value of the business
*may not retain all of the former owner’s clients without help from former owner
written purchase
sale agreement

35. complete and signed statement of inventory
~value of each article
initiate an investigation
~default in the payments of debt
identity of owner

36. Use of name and reputation for a definite period of time
Disclosure of all information ~clientele
~purchasing
~service habits
Disclosure of conditions of the facility

37. Noncompete agreement- seller will not work in or establish a new salon within a specific distance
Employee agreement-will the employees stay with the business

38. Drawing up a Lease
your own business
~not always the building
Rent or Lease-specify clearly
~who owns what
~who is responsible for repairs and expenses

39. Secure the following: exemption of fixtures or appliances
~can be removed without violating the lease
agreement about necessary renovations and repairs
option to allow you to assign the lease to another person

40. Protection Against Fire, Theft, and Lawsuits
Have adequate locks
Fire alarm system
Burglar alarm system
Purchase:
~liability
~ fire
~malpractice
~burglary insurance

41. all laws cosmetology
~safety and infection control codes/city/state
keep accurate records of everything!!
Ignorance of the law is no excuse for violating it

42. Business Operation
Need: ~excellent business sense
~ aptitude
~good judgment
~diplomacy
~sound business principles
~circle of contacts
*local entrepreneur group
*Chamber of Commerce

43. Smooth business management:
Sufficient investment capital
Efficiency of management
Good business procedures
Strong computer skills
Cooperation between management and employees
Trained and experienced personnel
Pricing of services

44. Review price list “starting at”
Review expenses chart (next page)
Allocation of money
know where your money is being spent
accountant and accounting systems are indispensable

45. The Importance of Record Keeping
simple and efficient record system
necessary regarding taxes and employees
record all income and expenses
retain check stubs, cancelled checks, receipts, and invoices

46. Purchase and Inventory Records
help maintain inventory
~ preventing overstock
~shortage of supplies
alerts you to theft
shows net worth

47. keep running inventory
~use and retail value
used daily
~consumption supplies
sold to clients
~retail supplies

48. Service Records
keep client cards
~treatments given
~merchandise sold
Include:
name, address, date, fee charged, products used, results obtained, preferences and tastes

49. Operating a Successful Salon
take excellent care of your clients
Salon-physically attractive
well-organized
smoothly run
sparkling clean

50. Planning a Salon’s Layout
best physical layout
~salon you envision
maximum efficiency
low-budget
~several stations
~small to medium sized reception area
~retail area-reflects the importance

51. High-end salon or luxurious day spa
~ expect higher quality of the service
~matched by the environment
~more room in waiting areas
Lounge area with beverages and snacks (between services)
private areas for clients to conduct business (phone, laptop)

52. private areas for clients to conduct business (phone, laptop)
retail area
~spacious, inviting, well lit
layout is crucial
advice of an architect
professional equipment and furniture supplier are good resources

53. Create small salon or renovate existing space
Keep plumbing in same area
Electrical wiring up to code
Get everything in writing from contractors, design firms, manufacturers, and architects
Get 3 quotes
It takes about 6 months for a new salon to operate at full capacity-have $$$

54. smaller salons Personnel size of salon determines size of staff
large salons require receptionists, hairstylists, nail technicians, shampoo persons, colorists, massage therapists, estheticians, hair removal specialists, housekeepers
smaller salons
~personnel perform more than one type of service

55. Interviewing potential employees:
level of skill
personal grooming
image as it relates to the salon
overall attitude
communication skills
good hiring decisions is crucial
bad hiring decisions
~ painful, more complicated

56. Payroll and Employee Benefits
successful business=everyone feels appreciated and happy
share your success when financially feasible
meet your payroll obligations
offer benefits
schedule employee evaluations

57. create and stay with a tipping policy i.e. stylists tip assistants
put pay plan in writing
create incentives
~earn more money
~ prizes
~tickets
create salon policies and stick to them

58. Managing Personnel
make a positive impact on lives and their ability to earn a living
learn how to manage other people
Learn what you can and cannot say when hiring, managing or firing

59. Be familiar with civil rights laws
*Equal Employment Opportunity Commission (EEOC)
*Americans with Disabilities Act (ADA)
Have a written personnel policies and procedures manual
Every employee must read and sign it

60. The Front Desk
“operations center”
employ professional receptionists ~handle the job of scheduling appointments
~greeting clients

61. The Reception Area
first impressions count
attractive, appealing, and comfortable
~receptionist
~retail merchandise
~ phone system
~business cards
~displayed price list

62. The Receptionist
second in importance
Well-trained
first and last person the client contacts
~pleasant
~ greet each client with a smile
~address each client by name

63. Efficient, friendly service fosters. good will, confidence, and
Efficient, friendly service fosters good will, confidence, and satisfaction
duties include:
~role of greeter
~answering the phone
~booking appointments
~inform the stylist client has arrived

64. ~preparing daily appointment information
~recommending additional services
~through knowledge of retail products
~salesperson and information source for the clients
~straightens up the area
~maintains inventory
~daily reports

65. Booking Appointments
Must be done with care
make the most efficient use of everyone’s time
client should not have to wait for a service
a professional should not have to wait for the next client

66. each person should know:
*how to book appointment and how much time is needed for each service
pleasing voice and personality
appearance that conveys salon image
knowledge of various services
***all services, cost, and time they take
unlimited patience with both clients and salon personnel

67. Appointment Book
helps stylists arrange time to suit their clients’ needs
computerized system
actual hardcopy

68. Use of Telephone in the Salon
good habits and techniques increase business
improve relationship with clients and suppliers

69. Good Planning
Business calls to clients and suppliers
~quieter time of day, quieter area
pleasant voice
use correct grammar, speak clearly, “smile”
show interest or concern
be polite, respectful, courteous
be tactful

70. Incoming Telephone Calls
lifeline of salon
Clients:
~call ahead for appointment
~call to cancel
~reschedule appointment

71. *use good manners
“Good morning”
Salon name
“May I help you?”
“Thank you”
Answer phone promptly

72. If you do not have information…
~put client on hold
~get information
~offer to call back with info
Do not talk to client in room while speaking with someone on the phone

73. Booking Appointments by Phone
record client’s first and last name, phone number, service booked
confirm appointment one-two days before
Automated systems can or text

74. Be familiar with:
~services
~products
~costs
~what stylists perform specific services- color correction
be fair
**exception-requests

75. When client requests an unavailable stylist:
Suggest other times
Suggest another stylist
Put on cancellation list

76. Handling Complaints by Phone
difficult task
respond with self-control, tact and courtesy
tone of voice sympathetic and reassuring and concerned
try to resolve quickly and effectively

77. Building Your Business
First area of opportunity-Social Media
Platforms:Facebook, Twitter, YouTube, Instagram-free to use
Build awareness
Engage your audience
Some salons: one person in charge
Others allow staff to post

78. Social media guidelines:
Same user name for all accounts
Get permission from clients before posting their image
Post regularly
Respond to questions, comments, or “likes”

79. Advertising
includes all activities that promote the salon favorably
attract and hold the attention
a satisfied client is the very best form of advertising
develop a referral program
hire an agency

80. advertising budget should not exceed 3 percent of your gross income
plan well in advance
know what you are paying for
get everything in writing
know your clientele-which type of media they use
what kind of messages attract them

81. Newspapers
*ads, coupons
Build a website
newsletters/discount offers
Website offerings, social network websites, blogs
Direct mail
Classified advertising

82. Giveaway promotional items
Window display
*attracts attention
Radio
Television

83. Community outreach
*public appearances, women’s and men’s clubs, church functions, political gatherings, charitable affairs, bridal fairs, fashion shows, radio and TV talk shows

84. Donations to local organizations
Client referrals
In-salon videos
On-hold message featuring salons best attributes
Follow up every visit to determine client’s satisfaction
Personally contact any client that has not been in the salon for more than eight weeks

85. Selling in the Salon
financial success revolves around
adding services or retail sales
*means additional revenue

86. Important that professionals feel confident in selling services and retail
Helpful and knowledgeable professionals make customer care their top priority
Offer good advice