From Start-Up to Success [what I learned in my first two years]

Twinsburg, Ohio-based Natural Beauty Salon was established November 9, 2001. As we enter our third year of business, I celebrate, reflect, and never stop moving forward.

As I complete two years in business, there is much to celebrate, reflect on, and, most importantly, plan.

In 2001, after spending years making other people successful, I decided it was time to make it happen for myself. Opening just seven weeks after September 11th, what chance did my business have of succeeding, I asked myself over and over during sleepless nights of preparation. I did my homework, hammered out a business plan, researched the market, created a niche, picked a product line, and decided on a compensation structure. Since opening my doors on November 9, 2001, I’ve learned what happens when my best laid plans are pitted against the fluctuating economy, inept plumbers, and empty voicemail boxes after running countless ads for help.

Sticking to a Budget

The best thing I did for my business in the long run was to stick to a budget while outfitting my salon. I knew this would benefit the health of the business in the years to come. Yes, it was tempting to buy new salon fixtures and create a beautiful décor; however, I remained steadfast to my $18,000 budget. I bought used and restyled salon fixtures. I scoured auctions and used lots of elbow grease to put together fixtures at a fraction of the cost of new ones. I bought a used credit card machine from a former salon owner to avoid the recurring monthly rental expense.

Keeping my initial fixed costs low became a focal point of every decision. If I could keep my monthly expenses low, I would have the luxury of building my business at my own pace, instead of the pace of my creditors. I decided to start small and build; I would stick to that theme.

I also understood I needed to have a cash reserve account. From my research on why businesses fail, I saw that cash flow problems were high on the list. I made sure to have several months rent in the bank — an emergency fund, so to speak. I am happy to say I still have most of that fund in the bank today.

The location I settled on was in a growing community, not in a strip mall but in an office building off the beaten path. After surveying several different locations I decided rather than have a huge setup fee and high rent, I would opt for a low initial investment that I would be able to grow into. Would I have grown faster in a higher-traffic area? Could I have afforded the monthly expenses while growing? Possibly, but possibly not. Instead of location, location, location, my most important mantra was marketing, marketing, marketing.

Marketing Sense

As a small business owner, I can tell you one thing for sure — everyone wants a piece of you and your advertising dollar. Fortunately, having a marketing background helped me avoid “sticker shock” when it came to advertising expenses. I also knew full well that due to my remote location I would have to spend a lot more in advertising to ensure a visible business presence.

First off, I used the local paper to introduce my new business to the community. I put my menu as an insert into the publication several weeks before I even opened. This helped build anticipation and excitement for the new business. More than 6,000 menus went out, resulting in my phone ringing before I was even open for business. The newspaper also ran a feature article because of the large advertising dollars I spent.

Tracking advertising is crucial to making the right choices. Don’t spend a dime unless you can track whether or not that dime is working for you. Some of the most successful advertising and marketing plans over my first two years were:

  • A monthly newsletter that goes out to clients who have been in the salon within the last six months. The newsletter contains important goings-on at the salon including shows attended, educational events, new products, treatments and services, and monthly specials. The newsletter is also published online.
  • Donating to raffles, area fundraisers, and women’s club luncheons is a priority. Any time I can donate a gift certificate, put together a basket full of products and have brochures in front of potential clients, sign me up! As a small business owner I may not always have money to donate, but time and services are easily available and the return on investment is high.
  • We also partner with schools for staff appreciation days. We go to the school, do hand treatments and I always have a contest to win a $50 gift certificate to the salon. I add these names to my database and these potential new clients receive a newsletter.

    I did a coupon mailer magazine my first year in business. While it was good for exposure we tended to get “coupon shoppers,” so I discontinued this form of advertising after the first year. I joined the local chamber of commerce and while I was too busy to attend many events the first year, I have made it a priority to attend as many events as I can this year. The networking opportunities are endless.

    I give a lot back to my clients. I offer a retail rewards program where clients can accumulate points that add up to dollars they can spend in the salon.

    I have ads in the Yellow Pages, in the local church bulletin, in the local town calendar, local grocery stores, and local high school publications. I network with other non-competing area businesses for special promotions. I partnered with an area restaurant for my Piña Colada pedicures. Every client who had a Piña Colada pedicure at my salon got a free piña colada from this restaurant. Each piña colada drink ordered at the restaurant got 20% off a Piña Colada pedicure at my salon.

    Since many women get engaged around the holidays, in December I started a promotion with a local jeweler offering a discount on a natural nail growth program to get brides’ nails looking fabulous for their special day. I have found that cross-marketing is essential to reach out to new clients. And like many other salon owners will tell you, most successful advertising is still word of mouth. A satisfied customer is still your best business-builder.

    The Staffing Problem

    I knew right off the bat that staffing would be a challenge, but I underestimated how big a challenge it would be. I thought by year two I would have expanded my staff more, but the quality and number of potential candidates remains low. One thing I have learned: hire slow, fire fast. Even when you interview and think you can mold a potential employee into what you need, what you see most often is what you get. I have had my share of two-weekers.

    If you don’t state your expectations clearly to employees, you have only yourself to blame when expectations are not met. I have never been one to delegate or criticize and that is a deadly combination as a boss and manager. I am learning to be more proactive in managing employees.

    Fortunately, I do not need a full staff to cover monthly expenses. Going back to starting conservatively, my sales dollars alone cover all expenses. This affords me the luxury to wait and hire the right person instead of needing to fill the salon up with a full staff immediately.

    By placing my salon in an area that did not have many salons I didn’t realize this also meant minimum recruitment possibilities. I have forged a relationship with a new beauty school in my town and hope to hire and train future professionals to add to my staff. I would rather build from a few good people who will project and protect the salon’s image. While patience has never been a strong suit of mine it is a virtue I am developing.

    My Biggest Mistakes

    Where do I start listing the mistakes I’ve made? (There have been plenty!) One decision I regret is not taking more space when it was available. My landlord was anxious to get me into more space early on, but I was afraid of taking on too much too soon. Now the space is no longer available and I am boxed in for three more years.

    Some specials have flopped, some products have bombed and learning exactly what to stock and in what quantities is still a learning curve. I have learned from every misstep though and fortunately none have been too costly.

    Never rehire a fired employee — it’s déjà vu all over again. Never ignore a potential problem in the hope it will go away, it never does. Get everything in writing, check the fine print many times before signing on or signing off anything. A new merchant service vendor I switched to is saving me money every month; however, I have to buy out the other vendor because I signed a three-year contract. I figure I’ll break even after year three.

    Regrets … I’ve Had a Few

    If I could go back and change things, I would have taken a half-day off every week, midweek, to attend to business matters. Having only Monday off makes it very difficult to get all business dealings completed in that one day. I end up playing phone tag with advertisers, manufacturers, distributors, and even my husband the rest of the week! I am not an owner who yaps on the phone while servicing clients. That time belongs to my client and I devote my whole self to her while she is in my chair. As I grow this year, I hope to take Wednesday afternoons off to work on the business not in the business.

    I also would have put more effort into recruiting employees. I was so busy running the business the first year that I find myself backtracking now to get the staff I need. It is an age-old question: Which came first, the client or the employee? Do I bring in employees and have them build or do I bring in clients and hope to move them over to new staff members? I needed every client I could get that first year and could not risk them not returning. Now I can scarcely fit in new clients, so finding staff is crucial to moving the business forward.

    Advice for New Owners

    Having a business background or solid business adviser is crucial. One of the best books I read was The E-Myth Revisited. Author Michael Gerber explains how just being a good cook, nail tech, or seamstress has nothing to do with running a successful business. You need a lot of support. If you do not have a network of supportive friends and family members it will be a long row to hoe. Many believed in me more than I believed in myself at several stages of this journey. Their support has helped me refocus and persevere when I sometimes lost my way.

    Don’t ignore the numbers, they don’t lie. I feel a good salon software program is essential to tracking monthly numbers. You will never be able to make a solid business decision without solid numbers. Follow your gut. Many poor decisions could have been avoided if I listened to my inner doubts. I love Oprah’s advice: When in doubt, don’t.

    This may all seem a bit cliché, but don’t try and reinvent the wheel. There is nothing wrong with patterning yourself after another’s success. Find your unique selling position. Success in whatever way, shape, or form is still success.

    Wait 48 hours to make any business decisions. Take time to talk things over with a trusted adviser before you leap.

    Read as much as you can about the business. I subscribe to several trade publications and read every one each month. I also research online, read national business trade publications as well as local papers to stay connected to the community in which I do business.

    Take full responsibility for successes and failures. The great part about this business is that it’s not life and death. Take time to pat yourself on the back for a job well done and be able to admit mistakes to yourself and others. Don’t beat yourself up; take time to enjoy your business. Often I read about other salons with tons of employees doing so much more than we are but I have to remember everyone starts somewhere, and I am only two years young.

    I still love what I do and feel blessed each day for another day in this business.

    What’s Next for Natural Beauty?

    I recently hired a receptionist who wants to become a cosmetologist. She was actually a client who loves the place and wants to make a career change. She has office management experience and is already an asset to the salon working as a receptionist. Soon, if all goes well, I will sponsor her at a local beauty school and set up an education repayment plan.

    I will concentrate on rounding out the staff at Natural Beauty. After researching for several years, I am putting a more formal training and coaching program into place to help move staff members toward their personal and professional goals. I will also set up profit-sharing or 401(k) investment accounts for the staff.

    It has been difficult to get time for my other love this year, teaching. I am putting together an eight-hour symposium this summer with other area educators. I believe that with success comes the responsibility of sharing knowledge and elevating the professionalism of the entire industry.

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