feature | 20 business mistakes you can learn from

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I’m Glad I Mademistakessuccessful salon owners reveal the big blunders that helped them become better businesspeople

Everyone makes mistakes. After all, we’re only human. But what truly separate extraordinarily successful people from those who simply throw in the towel are the choices they make and the lessons they learn after committing the misfire. Here, 20 of the most successful salon owners in the biz share one of their most profound missteps…and how they emerged wiser and stronger.

by Angie Sterkel

know your numbersJanine Jarman Hairroin Salon | Sebastian Professional Lead Stylist Design Team Member West Hollywood, CA

“Seven years ago our compensation system was set up on a sliding scale and unfortunately, we didn’t take out deductions. Nor did we

address increasing prices. We had it all wrong! The flawed system prevented us from making a profit and even caused us to lose money at times. So I turned to the Salon Masters of Business Advancement (SMBA) course offered through P&G Salon Professional. The SMBA course provides compensation equations, policies and procedures, contracts and a review system that can easily be adapted to your business. I also now work with a small business strategist who comes in once a month to check our financials, provide insight, and push us toward our goals as we develop new ones. The moral of the story is to do your math! Add up all operating expenses and break them down weekly so you know how much you need in order to break even. Develop your commission around that number and if you’re not able to produce a profit with a 40 to 60 percent sliding scale, think about charging a credit card charge fee, assistant fee, cleaning fee, color and cut charge, etc. Review this scale twice a year and make changes as soon as your operation costs increase. A healthy salon is 15 to 20 percent profit above bottom line, so anything below or greatly above needs to be addressed. Align yourself with professionals that excel in areas you don’t. Always sign your own checks. Ask a ton of questions and be flexible and open to change!”

find a product partnerVan Council Van Michael Salons Atlanta, GA

“One of the biggest mistakes I made initially as a salon owner was having too many product lines. It overcomplicated the product pitch, and in the end we missed sales, which lowered profitability. When I partnered exclusively with Aveda, I was able to offer focused service and products. As my salons needed renovations or as we opened new locations, we started positioning the retail at the front of the salon, thereby creating a ‘retail store.’ This welcomed walk-ins and created opportunities to gain new guests. Plus, education has always been a focus at Van Michael Salons and the alliance with Aveda promoted product knowledge and advanced education. That increased participation from the stylists and allowed them to increase their incomes, which drove profitability for the salon. When our profits increased we were able to take better care of our employees, and the company grew.”

reward vs. penalizeDebra and Charles Penzone Charles Penzone | Salons Powell, OH

“Several years ago, we developed a penalty to ensure all of our team members met certain retail requirements. However, rather than encouraging professionals, this actually discouraged our team members from reaching their full potential. We realized this when we implemented a Team Member Engagement Survey, which was an anonymous and confidential way to acquire their perspectives on the work environment. Due to the resounding negative response about the retail penalty, we changed the program. We removed the retail penalty entirely and developed additional incentives for our team members (in addition to the commission percentage they already receive) by partnering with our manufacturers. We continue to develop programs to enhance our current offerings of education and tools surrounding retail to encourage our professionals to understand the basic philosophy surrounding retail. Our team has welcomed this positive change in policy and has embraced the new focus on education and incentives.”

streamlining colorNick Arrojo ARROJO Studio and ARROJO Academy New York, NY

“My first business was a big salon with lots of stylists and I wanted everybody to be happy. I had colorists from different backgrounds and they all wanted to use different color lines. I allowed

each colorist to bring in the color line of their choosing, meaning we had multiple color lines. The problems began almost immediately. Soon the colorists wanted to experiment with a color line they had never used before, which led to colorists taking each other’s color. It became an inventory management disaster and my colorists were arguing among themselves. My inventory was decimated and the colorists were at war! The big insight here is this: If you have to bring in a color line to bring in a colorist then the colorist is not the right person for you. Ever since, I have stuck to one color line. This has many benefits over my first, failed system: • Itstreamlinesyourbusiness.Youreceiveordersfromonemanufacturer,

not a dozen, which makes it easier to track and manage stock. In turn, this makes it easier to profit.

• Clientsgetconsistentresults.• Youmaximizeyourinvestmentwithyourmanufacturer.Becauseyoubuy

more color from your source, you have more equity; you are a valuable customer which means they should present you and your team with more opportunities.

• Yourstylistsdon’tcontrolyourinvestments.Thisiscriticalbecauseastylist can leave the company at a moment’s notice. If you spent hours of time and made a big investment to bring in a color line for a new colorist, and that colorist leaves a year later, you are stuck.”

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mis-hire misfireEric Fisher | Eric Fisher Salons and Eric Fisher Academy | Two-Time Global Salon Business Award Winner | Wichita, KS

“It’s easy to be fooled when hiring people, and at first I was. Applicants looked great, smiled and interviewed

beautifully. But once hired, they were late, would not commit to the appearance code and skipped classes and educational opportunities. After experiencing this, we changed our hiring and selection process completely. We now have a four-step hiring plan and it’s our priority. I believe culture is everything in a business. If you have a team of negative individuals, your culture will be negative. If you have a team of positive individuals who enjoy their career, your culture will be positive. Our four-step hiring process includes bringing the candidate in for a meet and greet; inviting them to attend a Tuesday night class; a meeting with the managers and performing a haircut so we can assess their skills. We also believe employees must be developed, so all new hires start in our Assistant Program. They work for 12 to 14 months at minimum wage and must test out of our training program to go onto the floor. We don’t want to hire anyone that will only last six months. It’s terrible for the culture, the team and the company. We now have 150 wonderful individuals who are dedicated to quality and our core values and look forward to going to work!”

start freshMichael Haase Salon Platinum Black UNITE Senior Artistic Director Los Angeles, CA

“After being in the business for some time, I decided to purchase an existing salon.

There were 12 employees. My business models were always based on an eclectic vibe and great service, and I assumed the new team would be on board. They weren’t. They lacked the service capabilities needed for success. The front desk was a disaster, clients often were dissatisfied. I tried to retrain but my efforts were infected by negativity. Eventually, all but two found work elsewhere. For those two, training began in earnest and more stylists came knocking on the door. After nine months, we have 15 professionally-trained team members—front desk, concierge, stylists and assistants. My mistake was failing to train my team before I opened the doors, and my initial interview process was weak. I learned that at the end of the day, you must start fresh and create new, just as you would with a new client. Teach only those that can be taught and are willing to change, and you’ll be amazed at what grows.”

in hot waterMarco Pelusi | Marco Pelusi Hair Studio, Inc.

West Hollywood, CA

“When I built my salon, I didn’t anticipate how quickly we would become so busy. Unfortunately, the water heater was not large enough to accommodate our growth and

we often ran out of hot water on Saturdays. I learned that the simple things—like hot water—are vital to a busy salon’s success. I also learned how to handle the clients that were unhappy about this ‘minor’ problem. I would take a moment to spend time with a client who was receiving a lukewarm or cold shampoo, sometimes holding her hand or just making a personal connection. We maintained and strengthened relationships, and built more along the way. We obviously upgraded the water heater, but this experience sharpened my people skills and deepened my client relationships. And relationships are what good business is all about!”

hire slow to avoid hiring woesFrank Gironda | Frank Gironda Salon & Spa

President, Cosmetologists Chicago Naperville, IL

“I’ve been a salon owner since I was seventeen, so I’ve made several mistakes along the way. At first, I hired people after just a quick technical interview. What I got was inconsistent work, very little loyalty to the salon and a lack of clientele. The next thing I knew my staff was holding me ‘hostage’ and I was literally working for them, not for mybusiness!ThankstomymembershipinCosmetologistsChicago,(CC),Iconnectedwithpeoplewhowererunningsuccessful training programs and promotions, fellow salon owners and managers who knew how to hire (and fire) properly. I now know that an owner has to grow a business one hairdresser at a time and one client at a time. This simple strategy will cement your name and reputation while building your salon and clientele. Now I always train my own staff and provide leadership. Hire slow, fire fast—that’s my business motto today.”

expectations and autonomyMichael Crispel | Earth Salon Toronto, CA

“I was a stylist for 15 years before opening Earth Salon and some of the stylists

came to work for me. I tried to earn their respect by leading by example and I was met with resistance. So I pulled back to get perspective and realized I was trying to do too much and was micromanaging my stylists. Then I learned the art of delegation. I found this gave them ownership in my vision for my new salon, and I ensured it by investing in their training—not only in cutting/color classes but also in customer service. Taking the time to train my stylists was the key to giving them a voice in my salon. Now I have a well-oiled machine with happy stylists because I encourage them to find their individuality, and I also provide boundaries with structure. I’m proud to say that in an area with 84 top salons in one city block, we have been ranked one of the most progressive and busiest salons with top-notch customer service and a high retention of staff and clients.”

set and communicate expectationsAntony Whitaker Former Vidal Sassoon Salons/Schools Creative Director Salon Industry Educator, Author and Business Expert

“I expanded too soon. I had the opportunity to take over another salon that at the time was one of my main competitors. I made the mistake of thinking that running one business was the same as running two. Running one salon is not easy, but doubling the size of your business by taking over an existing business with a strong culture [and egos to match] and then having two locations is a huge step. I realized it was a mistake as I tried to morph two very different cultures and egos into one without the systems and infrastructure needed. For a while, we had a general state of chaos and many unhappy people who lacked the security and consistency they had been used to before the merger.

Over time I developed a clear set of salon operating systems, wrote out all the salon policies and procedures and defined our company vision and core values. This gave everyone a consistent point of reference as to what the business was all about, my expectations and what they could rightly expect working for me. Most people want to do the right thing; often they are simply not sure of what the right thing is. As a salon owner, don’t assume your team knows what is expected of them unless there is a thorough induction for everyone, a clearly-defined salon vision, shared values, an agreed code of conduct and leadership.”

embrace retailTed Gibson ted gibson salons L’Oréal Professionnel Celebrity Stylist New York, NY

“Being an artist isn’t always enough. You have

to think of your salon as a business. Retailing, customer relations and client retention are essential to building a successful business. For example, you can only do so many haircuts and colors in a day, but selling retail enables you to offer benefits, amenities and extras in the salon. I didn’t take that into account when I opened my first salon, but since then I have made drastic changes. We focus on retail and have built a business that grew 45 percent in the past year.”

plan ahead for growthSally Hershberger | Sally Hershberger Salons | New York City and Los Angeles

“I wish we had anticipated how quickly we would expand in the L.A. market. Since my salon concept was

completely different for the area, I expected slow and steady growth. But within a year, the staff and clients grew so exponentially that stylists were on top of each other! Had I anticipated this, I would have taken the entire third floor instead of just half. We had to max out each row until the additional space could be built out. It was hard on the staff and on our clients during the process. I learned that when starting a business, you need to account for success just as much as you do for the obstacles.”

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inventory controlSteve Corthine | Stevie English Hair | Australia

“One of my biggest mistakes when I first opened my salon was lack of inventory control. I have an emotional attachment to color and a fear of running out of my favorite tints. For this reason, the

color dispensary was crammed at all times. I was also ordering monthly in the belief that I was saving money on freight charges. We weren’t processing stock as it came in, so I had no clue what was being used or going missing. A visit from my friend and fellow salon owner showed me the light. I had thousands of dollars tied up in unused inventory and our cash flow was suffering. He encouraged me to set proper inventory levels, process all stock through the computer, monitor waste and take inventory regularly. He also helped me realize that the small amount I was ‘saving’ on freight was being wasted by having all that stock lying around. As a result of his intervention, we switched to weekly orders, spend a manageable amount on professional products and are completely aware of how much inventory we have at any given time. The staff is aware of these controls, and our product waste hasdiminisheddrastically.Cashflowisbetterandtheknowledge is empowering. Our second salon will be set up this way and function correctly from the onset.”

furnish wiselyRita Hazan | Rita Hazan Salon New York, NY

“I picked furniture I loved but it didn’t wear well with the constant salon traffic. Everything was customized so it was hard

and expensive to fix and replace. After three years, we had to expand because the salon had grown so fast (thank God)! This time, I took an empty, 8,000 square foot space and built it out exactly the way I wanted. Each outlet, each station, the floors—and this time, every single aspect was considered based on wear and tear and chosen to look beautiful and glamorous…and to last.”

decisions for the benefit of allRobert Barker | Salon Owner, TONI&GUY Partnership Salons | Atlanta, GA

“Sometimes our desire to over-involve or appease staff can influence our decisions. After all, we

are in a very personal and social business. For example, a staff member might request a specialized schedule for personal reasons. Even if that decision will prevent them from building a clientele, the Salon Director or Art Director might acquiesce in order to be ‘nice.’ We have to remember that as leaders, our decisions should benefit the growth of the individual, even if it’s not to their personal liking, and also must be good for the business long term. It may not always be the fun decision, but the smart, experienced, cultured decision works for long term growth.”

retail motivationNikki Lee and Riawna Capri | Nine Zero One Salon | West Hollywood, CA

“We never made any big mistakes that affected the salon negatively—rather, we’ve learned new and easier ways to help the business run more smoothly along the way. For example, in the past few quarters we’ve held product-selling contests among our stylists and staff; we turned a poster board into a game board with prizes and decorations to keep track of everyone’s progress. Everyone on our team has responded because it brings an element of fun when getting clients to try products that will ultimately help them maintain their hair. We never want to be slave-drivers forcing stylists to sell products, so this was the perfect way to increase sales with genuine intentions. The best lesson we’ve learned overall is to not take yourself too seriously and take things one step at a time.”

avoid costly delaysAndy LeCompte | Andy LeCompte Salon | Los Angeles, CA

“I signed a lease on a space, trusting the city would allow us to pull

permits within six weeks, but it ended up taking seven months, and then another two for the bank loan to close before we could start construction. With a lease that only allowed two free months for leasehold improvements, it was a huge, costly mistake. I knew going into it that it could be difficult to pull permits for intensification of use without additional square footage, but I checked with the city and they told me it was as simple as filing some paperwork and waiting six to eight weeks. Six months later it was a huge problem. We opened the salon one full year after we started paying rent—adding a huge financial burden to our start-up. My advice? Find a space that’s already zoned for this type of business!”

understand and accept your strengths and weaknessesRuth Roche | RARE Salon | New York, NY

“Looking back on being a salon owner, I think the

biggest mistake I made was trying to be the boss and a friend at the same time. When I needed to be firm with people, it would always put stress on ME (not necessarily on them) due to my personal relationships. Although many people are able to do both, I think you have to have a certain personality type to separate business and friendship. I am hyper-aware of other people’s feelings, and although that is a good thing, sometimes business is business and you have to put it aside. I had to learn to be a mentor rather than a friend, and in the end it forged friendships that will last a lifetime. How ironic! Just over a year ago, I sold RARE Salon to (my employee at the time) Fatima Sheikh. She has a business mind yet is highly creative. It is the perfect fit. I remain as artistic director, and am able to travel with Pureology much more than before. Fatima and I have a great relationship. I am so proud of her. The lesson? Do what you are good at, and if you aren’t good at something, or it is not your gift, hire someone else to do it. Or simply choose a different path!”

be clear about compensationGinger Boyle | Planet Salon | Beverly Hills, CA

“I realized pretty quickly that I had to set up specific compensation parameters. When someone reaches a

certain number, they get a raise, plain and simple. It was the only way I could avoid the perception of favoritism. Guidelines make everyone accountable and that leads to better compensation over time. As a salon owner, you have a lot invested in your business and you have to know where you are going. It comes down to management, compensation and planning, and when those parameters are clearly laid out, you help yourself and your staff, and your guests experience a positive salon environment.”

manage thoughtfullyOscar Blandi | Oscar Blandi Salon

New York, NY

“Throughout my business career I have learned to put a lot of time into making hiring

decisions. And if it doesn’t work out don’t be afraid to fire quickly! It is particularly difficult to find the right manager; this person must be groomed to run your salon the way you want it done.Youneedagreatmanagementteamtobuild and guide your salon in the direction you want it to go. Relationships with your team are alsoveryimportant.Youneedtoshowthemthat you are part of the team…and invested in creating a business family.”