(Continued from Part 1)
Now you are running the circus. You have a shiny new salon and a three-year lease and an enthusiastic staff awaiting your next command. Everyone is looking forward to reaping those rewards you promised.
And so you send out letters to all your clients announcing your new venture and inviting them in. And many of the clients you haven't seen in a while come in. They tell you how happy they are for you. They tell you how much they've missed you. They may even tell you things like, "I just didn't like it at that other place, but I didn't want to tell you; you seemed so happy there." Or "I'm so glad you left that place, the parking lot was just so dark! I was scared to go to my appointments after work!" Or "I just felt bad after I started having my hair done by So-and-So at That-Other-Salon — I just couldn't face The-Stylist-I-Used-to-Go-To-Where-You-Worked."
Maybe you join the Chamber of Commerce and the Mayor comes out to cut the ribbon of your new business. Maybe you have an open house and raffle off a year's worth of services.
Maybe your shiny new salon stays shiny and new for a whole year — or two. And then ...
And then what happens? One of your renters shoves a piece of paper in your face and tells you that you can't treat your renters like this because the IRS says that makes them employees.
One of your renters keeps standing up her clients and showing up hung over. Her clients are all complaining to you, but you keep telling them that you aren't her boss. You can't do anything about it but talk to her.
Someone quits. She doesn't give notice — you just open the salon one morning and her stuff is gone.
Another renter is struggling. Becky's going through a bad divorce and she's had to move back in with her parents. She misses a lot of days at work because of court hearings for custody. When she's in the salon she looks like she just woke up. She hasn't paid her rent in three weeks, but you're cutting her some slack because you know she's going through a rough patch right now.
Your esthetician gives you two-weeks notice right before you go on vacation.
There's a heat wave that summer and after 35 days of temperatures over 100 degrees, keeping 2,000-square-feet of salon space at 68 degrees delivers a whopping $1,500 electric bill. You find yourself reeling from sticker shock as you realize your expenses this July are almost double from last July — utility rates have increased, supplies have gone up — but you just can't bring yourself to raise everyone's rent. And you have four stations empty... and Becky's two months behind on her rent now. She finally got her divorce settlement finalized, but she had to move out of her parents' place and get an apartment. She'll pay you when she can, or maybe you can take it out in services — that you wouldn't normally get from her, but you want to cut her some slack. So you start buying the cheap toilet paper. Your renters can supply their own cotton from now on. The salon isn't going to offer coffee and cookies anymore, and you keep jacking up the thermostat to 78.
One of the pedicurists refuses to properly disinfect the foot spa, but when you tell her she has to, she shoves that SS-8 from the IRS back in your face and reminds you that you're not the boss of her. Meanwhile, Ms. "I’m Self Employed" has gotten to some others. Now two of your stylists refuse to sweep up their stations, saying they're "too busy" and "why doesn't the receptionist do it?"
Then the new makeup artist starts sniveling because the lighting in the salon is "all wrong" and you need to install true-color lighting, and put in a new fixture directly over her station. Which turns out will cost you a few thousand dollars to replace all the bulbs in the salon — not to mention the electrician to put in that new fixture, and getting approval from your landlord.
You're getting sick of hearing about how you can't control anything in the salon because you have renters, not employees. You consult with an attorney. You find out they're right; you can't tell them what to do and you can't take their keys away from them.
You think about changing to an employee salon. Turns out, it's really expensive. But at least you'll have control of your circus again. So you re-define everyone. You take their keys away from them. You establish hours for the salon and no one can work before or after that, and everyone is now on a 60/40 commission.
You lose three-quarters of your staff.
You realize that even if you get the salon fully staffed again, and even if all your staff members are booked, you can't break even unless you change the commission rate.
You start taking 50%.
You hire several new staff members, but they're all new licensees, fresh from school. They don't have any clientele and they need a lot of hand-holding.
You don't have time to mentor the new blood, manage the salon, AND take care of your own clients.
When your lease is up, you opt to downsize. You and your remaining staff move to the spot next door with only 600-square-feet of space. It's cozy and it's doable, and since the three people who are still with you are people you have known and trusted for a long time, you all agree to go back to a booth rent situation.
A few years later, one of your trusted, loyal renters tells you she's leaving. And she's taking the other two with her. You just aren't "stepping up" like a salon owner should and you've been letting the salon go to pot for the last few years. You never do any advertising to bring in new clients and you said you were going to add new station and get a fancy pedicure station last year, but you never did. And you never buy coffee and cookies for everyone like you used to — and no one's cleaned the blades on the ceiling fan in years.
You're hurt and you feel betrayed. This person has worked with you for years, been with you through thick and thin. And now she's giving you two days’ notice. She's opening her own salon. Turns out, she's already signed a lease and sent out notices to her clients. She never told you she wasn't happy with you as a salon owner and coworker anymore. She never mentioned that she wanted to open her own salon. She never asked you for help or advice.
Well, that's a very long way to get around to talking about leadership.
This story will be continued shortly in Part 3…