GMSB 281
[00:00] Antony Whitaker: Hello and welcome to this week's episode of the Grow My Salon Business podcast. I'm your host Antony Whitaker and as always, it's great to have you join us here today. This is a weekly podcast for ambitious stylists and salon owners. And every week I either bring a guest on the show or I'll dive into a new idea or revisit the foundations of what it takes to succeed in the salon industry today.

[00:26] Antony Whitaker: We'll also feature new startups and new ideas as well as initiatives from established people and brands. Hopefully you're aware that we're doing an intimate live two-day business school event on the 16th and 17th of March in the House of Sassoon, London. Early bird pricing is currently available and you can find out all the details at growmysalonbusiness.com forward slash course forward slash business school.

[00:48] Antony Whitaker: And I'll make sure that we put those links. In the show notes of today's podcast. So with that said, let's dive into today's episode as an industry, depending on where you live in the world, we have created regulations and in some countries, licensing around what you need to know or do when it comes to how to cut and colour hair.

[01:14] Antony Whitaker: And we do that so that both you and the clients are safe in terms of hygiene and sanitation, and to ensure that hairdressers have an understanding of how to use the chemicals that we use every day in the salon in a safe way, so that the clients feel protected by us having an expected level of training and professional standards.

[01:35] Antony Whitaker: So what I want to talk about with you today is that if we require a level of training for the practical side, meaning the technical creative side of what we do. What are some of the things that we might require if we had the same approach for when someone wants to open a salon? In other words, what do you need to know, or what should you know, in order to open your own salon?

[02:01] Antony Whitaker: Whether that's a traditional employee-based salon, or a rental salon, or even a salon suite. So that you have the tools. The best chance of success. What is it that you need to know? Because regardless of the type of business model that appeals to you, I think that it's important that you set yourself up to succeed before you go into debt or spend your life savings on going into business unprepared.

[02:26] Antony Whitaker: So with that said, here's what I think you need to learn or know about before you go down that path of business ownership. 

[02:33] Antony Whitaker: Now, just to be clear, this is aside from all the legalities around business permits and licenses that are needed to operate because they vary from city to city and country to country. And I'm also not going to include all the health and safety regulations that you will need to know about. And I'm not including what you need to know about the professional licensing to work as a hairstylist that are required in some countries.

[03:00] Antony Whitaker: And I'm not including what you might need to know about all that exciting stuff, like the building codes in your city, or the waste disposal and environmental issues, or what insurances you might need. And I know all that list of stuff that I'm not going to cover there might at first sound a little bit overwhelming and enough to put anyone off, but that's just part of being in business.

[03:24] Antony Whitaker: And so take comfort from the fact that literally millions of people have done it before and there's absolutely no reason why you can't also muddle your way through that as well. Aside from all that, what are the things that I think should be a requirement for anyone going into business? Well, the first one would be that you need to understand that with business ownership comes a different level of responsibility and accountability.

[03:52] Antony Whitaker: So if you transition from being an employee to a business owner, potentially with employees, then, although the potential for financial reward increases. The risk that you take on increases as well, and so does the level of responsibility increase. Whether that's the legal responsibilities of contracts and leases, or the moral responsibility that comes with employees and suppliers, as well as the obvious financial responsibility with landlords and banks and tax, etc.

[04:26] Antony Whitaker: And while we're talking about money, the responsibility increases on you. To be a good steward of the money that is flowing through the business and to learn to manage it properly and the responsibility for the safety and the livelihoods of others increases, whether that's the clients or the team members.

[04:44] Antony Whitaker: And when we talk about your team, the responsibility to train others increases and the responsibility to get those on your team increases. Busy increases too. So that's the first thing to understand that with business ownership, there comes a big increase in responsibility and accountability, whether that's to the landlord, the government, the tax man, or to your clients and employees.

[05:10] Antony Whitaker: The second requirement would be that, as I always say, you need to understand that you don't open a salon. You open a business that happens to do here. And so you need to learn some financial skills and understand the language of business. So for example, what exactly is profit? What is the difference between gross profit and net profit?

[05:33] Antony Whitaker: What is cost of goods or cost of sales? What are fixed costs? What are variable costs? Do you understand how to work out your break-even point? What is a cash flow forecast? What taxes are you liable for? And what are the numbers that matter in your business if you are to survive and grow? Now, I know that at first some of that might sound a little bit overwhelming, but it's not as difficult as it sounds.

[06:00] Antony Whitaker: And if you're going to open a business, you need to know that stuff. And while we're talking about financial things, the third requirement would be that you need to understand how to price your services. You need to understand the difference between the traditional, let's call it a la carte, menu-based pricing option where you pay for every service you have

[06:23] Antony Whitaker: and how that differs from the membership model where the client pays a fixed monthly fee that's sort of based on the gym membership model, and the third option is the time based model, which is sometimes referred to as hourly pricing, where you charge the client based on the amount of time a service takes.

[06:46] Antony Whitaker: The fourth requirement for someone opening a business would be that you have to understand the different business models there are and the laws around employment which can vary from country to country and even from state to state and in some cases city to city. Essentially, they will either be employees or they'll be self-employed and under that term self-employed comes a range of phrases some of which have a definite legal definition depending on where you live.

[07:15] Antony Whitaker: So they might be called renters, or chair renters, or booth renters, or independent contractors, or freelancers, or suite operators, or studio operators, or sole traders, whatever. They're essentially very, very similar things, in many cases, exactly the same thing. But as I say, some of those words actually have a clear legal definition around it, and they're often used without an understanding of what that legal definition means, which has a big impact on, amongst other things, tax.

[07:47] Antony Whitaker: Now the fifth requirement would be the commitment to evolve as a business owner. For example, another profession in order to keep your license, you have to attend a minimum of two weeks of business education a year to ensure that you know what you're doing. Not about hair, but about management, about marketing, about finance, HR and legislation.

[08:10] Antony Whitaker: Now, there's nothing compulsory like that in the salon business. And so, it's easy to keep putting it off and thinking that it's a waste of time and money. But business changes, laws change and technology changes. So, it's essential that as a business owner, that you keep abreast of how those changes impact on you and your business.

[08:30] Antony Whitaker: And finally, the sixth requirement would be that you had to belong to the professional trade body that represents employers in your state or country. So in the United States, that's the PBA or the Professional Beauty Association. In the UK, it's the NHBF or National Hair and Beauty Federation. In the Australian market, that's the AHC, meaning the Australian Hairdressing Council.

[08:55] Antony Whitaker: And if you're not in one of those countries, and I know that for many of you, you aren't, but there is usually a comparable organisation wherever you are. So that's my list of six requirements that I believe will not only help every salon owner succeed in business, but ultimately it would be good for the industry itself.

[09:17] Antony Whitaker: Interestingly, before we wrap up in Germany, when you open a salon, they actually do have a system where every salon has to have someone on their team who is what's termed a Meister, meaning master craftsman, and every salon has to have a Meister who is not just hairdressing competent, but after the initial three year hairdressing apprenticeship, it takes additional training and an examination And a few years of working experience to become a Meister.

[09:48] Antony Whitaker: And in order to run your own salon and to train other apprentices, you need to become a Meister. Now, whether that makes the industry any better or more professional, I don't know, but I think that most people listening to this would agree that there are benefits for everyone if you had a system, something like that.

[10:07] Antony Whitaker: So with that said, we are about to open our money online course. So for those salon owners who are listening and recognize that money is an essential topic to master, then visit growmysalonbusiness.com forward slash course forward slash money. And once again, I'll put that link in the show notes for today's podcast, because when you get clarity, And have the confidence that you need to handle the financial side of your business.

[10:32] Antony Whitaker: That will be the best investment that you have ever made. So if you want to find out more, then go to growmysalonbusiness.com forward slash course forward slash money and join the waitlist so that you get priority notification as soon as enrollment opens. So once again, that's growmysalonbusiness.com/course/money

[10:50] Antony Whitaker: and I'll also put that link in the show notes for today's podcast. So with that said, thanks for listening, and I'll see you next week.