Opening a new salon with no clients (please help stylists & owners)
- Thread starter sliver108
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squidgernetball
Ubergeek
From the sounds of it though, they have to make up the shortfall in commission which isn't the same as over here, so their therapists are self employed but get the minimum wage, no matter what!We already know how commission works, we use this in the uk too, the main thing were trying to say is don't employ untill you NEED to
Vic x
RED STAR
Well-Known Member
If I'm not mistaken, we have a similar version of this if we pay a % split, rather than a traditional 'rental'.
It's a 'grey' area that MR TAX MAN is not soooo keen on.
It is my understanding, if I take, say 50% from a stylist, and it leaves them with less than the minimum wage, I would have to pay the shortfall, i.e 50/50 split, OR minimum wage, whatever is the greatest.
It is not the same as self employed.
Sometimes it is favoured with new start up's. As no one really knows how busy they will be initially, it protects the stylist/therapist if business is slow.
Also, it can help attract staff, as there is no initial financial outlay. There are pro's & con's with both.
It's a 'grey' area that MR TAX MAN is not soooo keen on.
It is my understanding, if I take, say 50% from a stylist, and it leaves them with less than the minimum wage, I would have to pay the shortfall, i.e 50/50 split, OR minimum wage, whatever is the greatest.
It is not the same as self employed.
Sometimes it is favoured with new start up's. As no one really knows how busy they will be initially, it protects the stylist/therapist if business is slow.
Also, it can help attract staff, as there is no initial financial outlay. There are pro's & con's with both.
Yes we will need to bring in stylists that are pretty well established at first. The only other option is for my wife to go back to working with a salon and essentially "use them" to build up her book and then leave. We are both not to keen on the lack of ethics behind doing this. Not to mention that a few day ago she was hanging out with a bunch of her x co-workers and many expressed an interest in finding a new salon. So why not give them a new home because they are looking to move anyways.
We are only at a difference of around 10% currently. Many of my wife's friends are doing $3,000 a week and in some cases $4,000 in revenue a week. Now of course they only get around 45%-48% of that and tips but still. The cuts start at $50 and most of these styles are charging $55 plus. Our areas, judging by your housing prices, don't seem that off either so I am not sure why what our stylists bring in is 6 to 8 times what you do a week/month. They are just doing average cut and color services, no specialized services really.
Honestly our cost to compete in this market is around in the middle of other salons. It isn't rare to see the interior construction of a salon near us to hit $300,000. I know of one salon that has a mini spa in it with 8 styling chairs that pay around $7,000 a month in rent for around 3,500 sf. I guess the greater the risk the greater the potential reward. Not only that but you have to offer the right services for the right market. I would love to spend have the rent we are anticipating spend but we would be in a market where the incomes wouldn't support our model and basically we out of business quick. I would love not to pay front desk people or shampoo people but that really isn't possible. Trust me I tried to get my wife to give up on the shampoo people and that may save a little. We honestly don't have a ton of money. We are in our late 30's with 2 kids and managed to say a little. I guess we are upper middle class. $3,000 for an entire shop fit out sounds great. If we did that over here we would be forced to lower our prices by 60%-70%. That would also mean that much less income and overall a lot less profit. There are people with less than us and some with more but the important thing is that the business model can justify the expenses or lack there of. We are close to the largest mall in the US and some rents around here could easily be around $60 a sf or I guess another way to look it would be to say that for every $5 in monthly rent you get "1 sf".
surf girl
Well-Known Member
My salon is 50 sq ft lol so almost £5 a square foot too
my refit was £3000 in pounds so that would be $6000 dollars, my cut and finish price is £20-£25 which equates to $50 us. I could easily have spent hundreds of thousands kitting my salon up but I'm from (I hate to stereo type but lower class background as opposed to your upper middle class) that's where I see the difference here I value every penny and have learnt to use money in a different way to you guys I think. I don't mean that in a bad way it's just an observation. I have room for around 10 chairs in my salon but only have 3 at the mo. I answer the phone myself and have a shampoo girl on Saturdays, (again only spending what is vital) adjusting your prices because of the amount you spend on refit by 60-70% is silly if your worth it, charge it it won't be any more or less income if you have no customers anyway. With having your wife's friends eave their salons and bring the clients with them sounds great in theorey as long as they are self employed, otherwise their doing the bad moral thing you said about, pinching clients is frowned upon no matter where you are in the world. I think there are 2 optiones here, 1 wife works as stylist & all staff except shampoo girl are self employed. Advantage of this would be no wages risk if no clients come for them and a guaranteed income each week (booth rent ) they provide their own stock etc. disadvantage: when their up and running propperly they get lots of money and you still get the same rent as you always did. (Unless you do % split but 50% of nothing is nothing don't forget) option 2 is employ staff at minimum wage & commission as you stated. HOPEFULLY they bring clients and your making money from the get go and have total control over them as their employees. Disadvantage: if there's no customers there's no income & redundancy will come inevitably, hopefully before you've gotten yourself too far into a financial crisis :/I am so glad I am talking to people like you. It makes me wonder if my wife you be able to do the same thing. She manages a couple rail roads over here but she doesn't have enough time as it is. So I doubt she could cut down to part time but that gives me another idea. The owner would absolutely need her to train the person taking her job. He was actually a client of hers when she was working full time at a salon and going to college for a business degree. He liked her so much and felt that he could trust her to manage the books etc. I am almost wondering if he would let her work part time to help transition a new person into her job. It would take a new person 6 months minimum to figure everything out since my wife built a lot of the operation procedures from the ground up. The last person that has my wife's job completely screwed so many things up and he still gave her a severance to help transition my wife into the role. 1 to 2 years isn't realistic but a month or 2 would seriously help out. I was a waiter years ago before I went into management at some pretty nice places and I have thought about doing that 2-3 nights a week at first just to help out. I have also planned on doing the receptionist job for 30-40 hours a week. I can easily to a lot of my marketing, bookkeeping, and tracking from up there.
Thanks for the advice daydreams!
I have a lot of business experience outside beauty - I am a qualified business risk analyst and have been a non executive director of big businesses where I specialised in business development. I also have a lot of restaurant and catering business insight as my sister in law has become a real big cheese in the industry. My knowledge of beauty and hair is that in the UK you have to start small or have a seriously large divorce settlement or be backed by a corporate.
There doesn't seem to be anyone on salongeek who is turning over the numbers you are talking about and with the time/inclination to comment on their experience.
I would suggest you offer something to the stylist to keep them loyal to you, otherwise, if they have a client base, why should they stay with you? I would suggest that you offer them a book keeping service so that they save on the hassles of after hours admin.
I also suggest that you have a separate income stream to take some of the financial strain off the new business - don't try and live on what you make.
And don't overestimate your stylists ability to make minimum wage. You've just read loads of posts from people prepared to work hard for less than minimum for years in the certainty that it will all be worth it in the end...
It took me 2 years to turn over £1000 a week. Ultimately it comes down to cashflow - as with any business, if you can keep the overheads covered until the income catches up, you'll make it. All businesses hit a lean patch around month 6 which can last for a year or more. You need to be able to respond to what the market tells you is successful and there are all sorts of factors that you can't possibly take into account in advance. I had a competitor open across the way and another relocate to my doorstep. The church down the road opened a homeless shelter and a modest b&b got a license and is now a shisha and cocktails club. All of these things affected my business in ways I couldn't have predicted. Then there was the therapist who developed celiac disease and kept fainting and vomiting at work, the therapist who fractured her shoulder, the one that stole....
There doesn't seem to be anyone on salongeek who is turning over the numbers you are talking about and with the time/inclination to comment on their experience.
I would suggest you offer something to the stylist to keep them loyal to you, otherwise, if they have a client base, why should they stay with you? I would suggest that you offer them a book keeping service so that they save on the hassles of after hours admin.
I also suggest that you have a separate income stream to take some of the financial strain off the new business - don't try and live on what you make.
And don't overestimate your stylists ability to make minimum wage. You've just read loads of posts from people prepared to work hard for less than minimum for years in the certainty that it will all be worth it in the end...
It took me 2 years to turn over £1000 a week. Ultimately it comes down to cashflow - as with any business, if you can keep the overheads covered until the income catches up, you'll make it. All businesses hit a lean patch around month 6 which can last for a year or more. You need to be able to respond to what the market tells you is successful and there are all sorts of factors that you can't possibly take into account in advance. I had a competitor open across the way and another relocate to my doorstep. The church down the road opened a homeless shelter and a modest b&b got a license and is now a shisha and cocktails club. All of these things affected my business in ways I couldn't have predicted. Then there was the therapist who developed celiac disease and kept fainting and vomiting at work, the therapist who fractured her shoulder, the one that stole....
I can echo all of the above......As much as I would have liked to open my salon with a 'TEAM'.....Thankfully, with some words of wisdom from my sister, who has 'been there, seen it, and got the T shirt',
I opened with, ME, MYSELF & I.......
Sometimes it was a little 'awkward' when client's say "Oh, is it just you on your own....?
I'd say "Yep, how lucky are you, you will be given my undivided attention!"
Before you leap in with both feet.....look at all the salons around you.
Are they banged out every day.....
Also, look at the 'businesses for sale' sites.....I see many salons that I thought were doing 'really well', but in reality, they are 'on the market', obviously not all is what it seems.......
And yes, people may say they are 'raking it in'........earning $$$$$$..........in my experience, no one will shout from the roof top's, ' My business ideas gone a bit s**t!
Just make sure you do your homework
I am starting to realize that our business models are very different lol. Every stylist is revenue over here. My overhead will basically be the same no matter what so why not pack the house so to say?
I have always paid special attention to branding and corporate-like operations. My opinion is that most salons and even restaurants (my past profession of 24 years) operate like drunken sailors. I have worked for both sides of the coin. Last restaurant I worked in we broke even the 2nd month....I know....really. No of course then had 14 other brands/locations hence name recognition but they did no advertising. They always did things smart and I noticed that. Every detail was meretriciously thought out. I am trying to bring that over to the beauty industry.
Thanks for your response!
surf girl
Well-Known Member
It's going to be a struggle to combine business models as the industries are believe it or not very different, I'm interested to follow along and see how you get on and what ideas you implement tho so please keep us posted on how things are progressing, every stylist here is revenue too lol unless they have no customers... Then their a liability lol
RED STAR
Well-Known Member
I worked in a salon that had the 'Why not pack the house' way of things........2 weeks later, I was gone!
Your self employed stylist are there to make THEMSELVES a living - not to make YOUR salon look good.
ie. 8 CLIENTS A DAY shared between 10 STYLISTS =
A war zone!!!Create a 'DOG EAT DOG' environment......be sure your ready to clear up the mess.
I worked in a salon that had the 'Why not pack the house' way of things........2 weeks later, I was gone!
Your self employed stylist are there to make THEMSELVES a living - not to make YOUR salon look good.
ie. 8 CLIENTS A DAY shared between 10 STYLISTS =
Create a 'DOG EAT DOG' environment......be sure your ready to clear up the mess.
I thought I explained the fact that we are not going to bring stylists in that didn't have a decent book at first. I wouldn't bring in newbies to a new salon no matter how much advertising and marketing i did. We are trying to plan our business model out to attract quality stylists as well as clients. Essentially we are partly playing off of other salons weaknesses. Culture wins...does it not? There are a lot of pissed off stylists out there just itching to leave there places. If we can match commissions, offer a little more in incentives, provide a better culture, and offer advancement in the future I have never seen a case were you couldn't attract better employees in general. I know everybody is in the same industry but number wise I think we are very different. MANY decent stylists bring in $3,000 a week here in revenue for their salons. The better ones do $3,500 to $4,000 a week in revenue. We only need a few average ones making $2,500 a week and we are offer to a good start. Then fill the remaining holes with stylists making less. We only need to be operating at 20 some percent capacity to break even. I think that is the key here....we will not hire people at first that do not have a book.....to be fair to all involved...us and them. Any new salon owner that packs the house with new stylists or stylists without a book are complete idiots imo lol. You also have to realize that starting with a smaller location doesn't really save us that much money. Overhead is pretty much set in stone for the area. What can I say...the cost of market entry is just very high here I guess.
surf girl
Well-Known Member
Do u mind if we continue to question? I mean that in a good way because I don't want you to feel I'm not picking but I am genuinely interested.
What will you do when the above scenario happens? Only a few customers with more stylists?
Even the busiest stylists in the industry have quieter days / weeks what will you do to bump up the clients that day? Or won't you do that? And how do you plan to share out limited clients I.e walk ins & new customers? Or will they go to your wife for her to build her coloumn? How will the others feel and how will you deal with keeping things sweet?
What will you do when the above scenario happens? Only a few customers with more stylists?
Even the busiest stylists in the industry have quieter days / weeks what will you do to bump up the clients that day? Or won't you do that? And how do you plan to share out limited clients I.e walk ins & new customers? Or will they go to your wife for her to build her coloumn? How will the others feel and how will you deal with keeping things sweet?
RED STAR
Well-Known Member
I'm not sure anymore what you are asking us for, here on 'GEEK'............, as it seem's to me you have it all sown up.......
Good Luck with your New venture.
Good Luck with your New venture.
Sliver108, how is your business venture going? Would love an update on this thread
Hopefully well, as Silver108 hasn't revisited the site since July 2015.
