Start here if you missed Part 1: Identifying A Major Problem In the Beauty Industry


You have a dream to be a salon owner, talented and busier than any stylist in your salon. You have a clever business name, an eye for salon design, a business plan, and some money. You hustle hard, get some business cards, go through a build out that almost breaks you, hire a few people, and open your business… Now what?

Suddenly, the lessons of being a small business owner begin. In this article, we’ll focus on the core qualities of your salon business in order to provide clarity on the central responsibilities of the small business owner.

As an owner of a multi-million dollar salon, I’m often asked what the secret is behind building a business that maintains momentum, generates profit, and becomes sustainable, which relates to minimizing turnover or how to continue increased growth every year.

We’ve put together the following concepts to simplify the disorder in business ownership with an illuminated business strategy. Regardless, if your company is a newborn or full of blood, sweat, and tears, there are three fundamentals that every business owner needs to master in order to truly drive your revenue upwards and develop long-term sustainability.

Before we dive into the three fundamentals, let’s layout the five interaction points of a salon infrastructure or foundation. Visualize these five points as high functioning zones in the salon.

  1. The private employee spaces where team building and productivity should thrive.
    The main service floor for guests where team productivity and excellent customer service parallel.
  2. The internal business structure where you practice all compliance policies, fair pay and compensation concepts, exert strategic financial decisions, and measure revenue/expense metrics.
  3. Within these zones, the business owner can see how the three fundamentals connect and come into play with our three interaction points. This will give us a multidimensional view of our salon company.
  4. The consultation traveler / carrier.
  5. The back room color mixture amount assignments.

Let’s outline the three fundamentals:

Fundamental 1 – The Dual Experience

Experience 1: The Employee Experience

How well you treat your staff is at the core of how your company will grow. Without a happy team, there cannot be longevity. Without longevity, there will not be sustainable growth within your company. You, alone, will not be able to magnify your service or products in years to come.

Everything you do with your employee experience, like compensation plans, incentives, training, staff space design, salon policies, and goal-settings will serve to duplicate yourself, your skills, and your vision. Otherwise, you will not, truly, be an entrepreneur that creates autonomous growth and recurring revenue. You’ll end up being a reactive slave to your business and a babysitter to the fiery demands that need to be put out.

Experience 2: The Guest Experience

Without clients, there’s no business. Take great care that you nurture your guests at all times. Be cautious to not let salon policies like late, cancellations, no show, or client complaints hinder your client retention. Handle these situations firmly with understanding, but don’t forget that businesses that have extremely generous customer service policies lead the market in setting the standard for excellence. Read up on companies like Ritz Carlton®, Nordstrom®, Chick Fil A®, or Amazon® to see how they approach customer service policies. They are shining examples of exemplary customer service delivery, and salon professionals would grow exponentially by following their lead.

Your team is responsible for delivering this quality of experience after extensive training on your branded systems. As the business owner, you’re responsible for creating and training those systems. You, as the “macro-visionary,” should be honed in on the duplication process of these systems in order to be sure that your brand and style come across clearly with every guest interaction. Your team’s mastery of this experience will drive new traffic as well as retain existing clientele with a deep appreciation for your brand vision.

Fundamental 2 – The Expense Outflow

As a salon owner, you have to decide how much revenue you allow to exit your business everyday, every week, every month, and every year. Are you choosing wisely to allocate your expenses in a way that continues to feed your business, or are you reckless and uninformed? Are you considerate of tax deductions that can be applied to your expenses?

Running out of money limits your ability to expand. Designating your expenses correctly requires a professional eye. This is not to be taken lightly. Enlist the help of a professional. YOU deliver great service. You don’t need to know how to be an accountant.

Finding this key person is your dominant priority. Compiling and hiring the right team is a requirement to being a great business owner. Be sure to assign and delegate these tasks to trained professionals such as:

  • An accountant for large financial tasks.
  • A bookkeeper for daily accounting.
  • A business coach to help educate you on the workings of a stellar accounting workflow.
  • A front desk training system to insert the correct management of your daily revenue collection into your accounting systems.

Remember to educate yourself on the importance of financial strategies, core financial knowledge, and reports to be used by a business owner.

Fundamental 3 – Your Cash/Revenue In-flow

The key to all growth of your company is how much money you make. This is the most important part of running a small business. I’ve met so many salon owners that ignore the magnitude of how they generate revenue. In reference to your sustainability and profitability, analysis of the presentation of your pricing can alleviate your lack of a paycheck. This blog series, we will focus heavily on this fundamental and balancing your pricing.

To many entrepreneurs, making more money ranks up there as one of the most important needs they have, yet these same owners never put attention to creating a formal and strategic pricing suite. They casually manifest a set of prices that have very little to do with their expenses. They illogically tie emotions to pricing. They’re held prisoner by the fears of their employees to re-adjust the prices accordingly.

These salon owners end up with flat pricing structures that simply allow no individual growth for their employees. They view price increases as a reaction to other’s demands, not systematic metrics that present clear data as to what price point will be a breakeven and profitability point. Precisely dealing with how much service or product revenue you’re capable of generating every hour, everyday, every week, every month, and every year will become the one true way of getting into the black side of loss/profitability.

Without a doubt, all business owners can agree that how much you charge will determine how much money you can make. It would be safe to say, then, that our pricing qualities will directly affect our company’s ability to sustain and even, to survive.

Within all of the complexities that make up the third fundamental, your revenue generation is the most influential on how sustainable your company will be. For this reason, The Statements Project immediately goes to the four point pricing suite as our first task:

  • The service and pricing brochure (or lack thereof)
  • The website price list
  • The front desk and computer pricing templates
  • The staff training procedures on service lists and proper product fees

We connect the dots to bring clarity to what fees should apply, and train staff on all services presented on the service offerings menus. We then connect back to the color room and stations to complete the pricing suites in order to stabilize all revenue coming into the business.

Here’s a basic equation that can assist you in formulating your accurate pricing structure:

Refer to our worksheet on to assist in walking you through the process (coming soon).

  • Determine your total annual service and product revenue
  • Calculate your total sum of expenses on your accounting program
  • Add up how many days your business is open
  • Project a reasonable profit margin layer
  • Divide this profit margin amount by the amount of days you’ll be open per year
  • Increase your prices per day /per hour to incorporate new profit layer

These metrics can help you determine what your hourly, daily, monthly, quarterly, and annual goals are. Once you have this number, you can calculate your pricing to strategically generate more revenue. To salon owners that are also stylists, I understand how overwhelming all the tasks can be. We are unsure of what is/isn’t our responsibility. We lose ourselves in our work and forget the core pillars of our business. I encourage you to refocus on these three fundamentals within your business, starting with Fundamental 3. Determine whether or not you need to raise your prices, which will affect your cash in-flow.

Here’s to your future success! Cheers!

Nik Trowbridge

Please join me on for Part 3 to learn the 10 Steps to raising your prices.

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