What Successful Salon Owners Are Doing to Overcome New Industry Challenges

With millennials dominating the workforce and technology changing how we do just about everything, it is crucial to reevaluate how we are running our businesses and serving our clients. The salons that succeed in today’s changing landscape are the ones that understand this and lead the industry through innovating their business practices.

I had the honor of chatting with four successful salon owners about their businesses and industry challenges, and what they are doing to overcome them.

Here are some of the challenges that they shared with me:
o The cost of running their salon
o Keeping staff motivated to attend education
o Attracting new clients
o Attracting the right staff
o Marketing

I first spoke with Marco Pelusi, a globally renowned celebrity hair-colorist, platform artist and hair color educator, who owns Marco Pelusi Hair Studio in West Hollywood, California.

Marco’s love for the beauty industry began with his family’s upscale chain of East Coast salons and has continued throughout his career. As an industry vet and educator, Marco has seen a change in expectations that new hairstylists have when starting their careers, and the disconnect with what is most important for having success as a stylist.

1. With high-fashion multicolored hair trending and in demand, newer stylists are not interested in learning the basics and foundation of hair coloring and hair cutting. These young stylists see influencers’ high-fashion work and they don’t understand what it takes to make a living behind the chair. If you don’t have a clientele that is willing to pay top dollar for your four-hour color service, you need to broaden your skills and clientele.

2. Younger stylists understand the value of social media for marketing their talents and connecting with their audience. Understanding what makes a true connection with another person, whether on social media or in person, is the disconnect that Marco sees as a challenge for the millennial stylist.

Marco has addressed these challenges in his own business by mentoring new stylists through education and making a point to connect with them in a personal way. At the salon, he always finds time to check in with his team and ask them how they are doing.

Tomas Perez was kind enough to take time to talk to me between his busy schedule with his two barbering businesses. Tomas is a barber of 20 years and works serving his clients in Chicago, and also owns and operates Cary Barbershop in historic Downtown Cary, Illinois.

Running and managing business operations is always an intense amount of work, but here are what Tomas has found to be his greatest challenges:

1. Hiring the right barbers who want to work and stay in the industry. Tomas has had the experience of hiring young barbers who stop showing up to work without notice. He has found that many of the newer barbers do not understand the work ethic that is required to grow a barbering business and make a living.

2. Attracting new clients through social media advertising has become more challenging. There has been a surge of new barbershops opening, including franchises, which has made it harder to stand out and attract new clients and talent.

Tomas has addressed these issues by staying involved with the local community and offering value to his team through education and mentorship.

Regina Pawliczek opened Chrome Salon in Florida, New York in 2012.
Since opening, sales have far exceeded the original business plan, now grossing $500K—especially great for being located in a tiny village in Upstate New York. Most of the salon’s clients travel from the surrounding area to visit Chrome Salon. They are 80% pre-booked and take deposits for most bookings to ensure they don’t get last minute cancellations, asking clients to kindly give a 48-hour notice for cancellations and reschedules. This policy was implemented 2 years ago and has almost eliminated last-minute cancellations.

Here are some of the challenges that Regina shared with me:

1. The high cost of running the salon, with payroll expenses, rent, and merchant service fees, has been a huge challenge. Following the industry standard of 50% commission is no longer working with the high overhead of running the business. Regina strongly recommends to new salon owners that they pay an hourly wage, plus commissions on a scale, which she has incorporated with new hires.

2. She has found that by raising service prices to meet the rising cost of running the business and to generate more income for the stylists, the stylists tend to see fewer customers, and they don’t go the extra mile to generate more income. Regina is working on how to address this with her staff.

3. Regina has a great staff. She takes time in hiring and has had few regrets. The challenge she faces is that a majority of salons are paying their employees cash and/or as independent contractors (1099), leaving it up to the stylists to pay their own payroll taxes—the problem with this is that it’s illegal. An independent contractor is just that: someone who comes in occasionally to work, not on the regular salon schedule. They provide their own bookings and supplies. When the salon has them on the schedule, supplies all the products and books their appointments via reception, that person is an employee, not an independent contractor. Regina has had great job candidates that have backed out of the job offer when they found out that there are payroll taxes to be withheld.

4. The last challenge that Regina spoke of was education. She has a written and signed agreement with all of her staff when they accept the job position, which requires a minimum of 20 advanced training hours per year. The salon offers in-salon advanced training programs at no cost. There is an education fund offered to stylists. They can choose to build their fund from their retail product sales commission. Some of the stylists who have been in the industry for more than a decade act as if they no longer need to participate and have become complacent. This year, she is focused on ensuring that everyone completes what they have agreed to when accepting their job.

Regina has proven that sticking to her high standards of ethics and business practices pays off in having a successful salon.

I had a great chat with Erin and Evan Silver. The couple has owned Silver Salon in Easley, South Carolina, since 2012.

Here is what they shared about the biggest challenges they face, and how they have created solutions that make their salon culture great:

1. Building a team with the right people who are humble, hungry and hardworking is always a challenge, and that is why they take their time to hire and protect the salon culture. They believe in building equity in people and helping them grow. Having a work/life balance is important to have true success, and it is a value shared among the team.

2. Giving consistent and outstanding guest experience. Each new guest at arrival receives a welcome gift, a beverage and a tour of the salon. The team gives a thorough consultation to assure that the guest leaves happy and with no surprises at checkout. The salon team mission for each client is, “Our goal is to change the way you feel about yourself… not just do hair.”

3. Leadership can be another challenge. The Silvers are building leadership teams within the salon. Each team leader is mentored on how to lead people. They even have a book club for the leaders to read great leadership books.

4. With all the challenges of running and operating a salon, it can feel lonely with the lack of support and connection of other owners. The Silvers have found that, as owners, you need to make a point to reach out and connect with the other salon owners. They have also found great support through the Summit Salon program, which provides business management and coaching.

I hope you have been inspired by these salon owners and how they have created positive change for their businesses.

I would love to hear from you on how you have addressed industry challenges.

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