Master Hair Stylist / Businessman – Mentor, Michael Brothers
This Mentor has built a highly successful business using both his artistic skills as a stylist and the business skills he developed over the past twenty two years operating his own salons. Michael was helped along the way by several people who became his mentors. Another key to his success was that early in his career he recognized the importance of building long lasting relationships with his customers, employees and business partners. In his article, Michael shares the keys to becoming a successful stylist and the basic principals he followed to start and grow his salon business. His article should be read by anyone interested in becoming a hair stylist or learning more about the salon industry. Because Michael’s business model is based on many of the same principals used by many successful personal service businesses, his article should also be of interest to anyone in any skilled trade or service business considering making the transition from employee to business owner.
My parents did not promise me any financial help if I wanted to go to college. So I knew that I had to look for alternatives. I was artistic and tried to think of different ways to use that talent where I could also make a good living. I settled on hair styling because becoming a stylist would allow me to use my artistic talent and because it required the kind of training I could afford. Back then there were and still are programs in high school where you are able to work half a day at a job your senior year and receive credits towards graduation. But unlike today, back then I also had the opportunity to work as an apprentice for a stylist rather than going to a beauty college in order to get my certificate, which eliminated the cost of tuition. But the requirement for going this route was 5,000 hours of apprenticeship training compared to 2,500 of classroom training at a college.
The man I apprenticed with was someone I admired and wanted to emulate. He taught me how to style and color hair and I soon became the top person in his salon. I hired an assistant as my appointment book grew. But as a stylist you only have two hands and there is only so much time in a day. To make more money, I had to become more efficient and make use of the down time when my customers were under dryers or being shampooed. The way to do this was to double book. This means that when one of my customers was not in the chair, I was working on someone else. This can be a difficult balancing act. I want each of my clients to feel that they are getting all of my attention and that I am catering to their individual needs when styling their hair. I was able to do this successfully with the help of my assistant and continued to grow my appointment book. I was making about $50,000 a year back then and felt that I was doing well. I had no interest at that point in my career in running my own business and was happy as an employee. But after five years at that salon, the owner overplayed his hand trying to grow his business and got into financial difficulties.
I then moved to another salon in a different part of town. I was nervous making that move because I didn’t know how many of my customers would follow me. As it turned out, I only lost two. I worked a lot of hours at that salon. My days began at seven in the morning and lasted until seven or eight o’clock at night from Tuesday to Saturday. I had a full time assistant and was making around $100,000 after paying my assistant and giving half my gross to the salon owner. I was able to buy a house and take a vacation. But after five years at that salon, this owner also got into financial difficulty. He became payroll happy and couldn’t control his costs even though the salon was doing a good business and had revenue in seven figures. He came to all of us and said that we would have to take a pay cut, which being the top producer was something I was not willing to do. I had several successful businesswomen as clients and they all encouraged me to go out on my own. Although I wasn’t entirely comfortable with the idea of running my own business, the encouragement I got from these professional women made me feel more confident and I began looking for a way to start my own salon.
I found my opportunity with a woman who was starting a spa and wanted someone to open a salon in her building, a renovated mansion built in the 1920s. My share of the build out and equipment cost was $20,000. I had good credit and savings. But no banker would talk to me about a loan. The consensus among the bankers was that they had never made a profitable salon loan and considered the business risky. One banker told me that his bank had tried making loans to salons in the past and every one of them went belly up. The statistics do prove that starting a salon is a high-risk venture. For every five salons that are started, only one is still in business after five years. Of the ones that survive after five years, few make it past ten. But here is where relationships with people willing to help mentor me again came into play.
One of my customers, a very successful businesswoman who had encouraged me to go out on my own, took my appointment book to her banker and was able to get him to reconsider. That book showed appointments out for over a year. Besides having a good book of business, I had good personal credit. I always paid my bills on time and had never bounced a check. I also had personal savings and had purchased a house. With her help, I was able to get the banker to approve my loan. This is an important lesson for anyone wanting to start a business that needs the help of a banker. Your personal credit is going to be a reflection of your business credit. Handle your personal finances responsibly if you want to convince a banker you can successfully handle your business’s finances.
The build out was beautiful. The waiting room was one of the front sitting rooms in the mansion and the work area was in a converted kitchen with marble floor and gorgeous countertops and cabinets. I furnished the waiting room with furniture from my house to save money. I had one full time assistant when I started. I began to train people just out of beauty school and built the salon up to four employees. During this time, I also learned another important business principal. Spend money on things you cannot do or things you know you cannot do well. It was during this time that I hired a good accountant and attorney. The attorney helped me do the legal organization of the company and keep my filings with the state current. My accountant helped me budget, pay my payroll taxes and income taxes on time, look for ways to minimize my taxes and helped me evaluate my investments. My job was to style hair and write checks to pay the bills. I also gave my long time assistant a percentage of the company. She worked hard helping me grow the business. Her dedication was something that I appreciated and wanted to reward. She was emotionally invested and now she was financially invested in the success of what was now “our” company.
While I continued to teach new people just out of beauty college, my salon space was full and I had no place to put them. I knew it was time to expand and I began looking for a larger space. I found an old building in an area that was being redeveloped. It was a 4,000 square foot box, a perfect building for me to renovate. My accountant told me that acquiring a building would give me some tax advantages. Buying was also about 25% cheaper than leasing space in an the area of town where I had considered relocating plus I didn’t have to give 10% of my gross to the landlord as part of the lease contract. But to purchase the building and renovate it I need a bank loan. So I went back to the same banker who had helped me start my first salon. Because I was working with an accountant, I was able to take my banker a business plan and a budget that included key man life insurance and disability insurance, something that is important when you are running a personal service business and is an important consideration for a banker. He approved my loan and I began the one-year renovation.
I wanted the salon to be elegant and hired a good designer to make that happen. I also visited salons in New York and Los Angeles to help me get ideas. During the construction period, I bought some of the equipment I needed each month and put it in storage. By the time the building was completed, I had purchased and paid for all of my equipment for the new salon. I was also fortunate that the woman who owned the spa where I leased my space was supportive. She gave me ideas on the renovation and worked with me to make a smooth transition even though I was creating a new business that would compete with her. Her generosity is something that is unusual in business. This whole experience was another example of how important it is to build good relationships. When I decided to buy the building, I had the relationships with an accountant, attorney and banker to be able to get things done and a landlord who helped make the transition a smooth one.
When I moved I was on the hook for a lot of money. I started with just four people. But we made money the first day we opened. I now have 20 people working in the salon. These include 12 stylists, 8 of which I have trained. While stylists need to be skilled in their trade, that is only about one third of what I look for when I want to hire someone. To me the most important key to success is being a nice person. This means that you have to convey a good image to your customers as someone who cares about them and their appearance so that you can build a strong, long-term relationship. It is these relationships that help you build and maintain a good book of business, which is important for any stylist to be successful.
The past several years I have learned more about the salon business. I even brought in a consultant who only works with salons to help me improve my business. I also attended a seminar on salon management put on by a company that supplies a lot of the products we sell. Most of the salon owners were MBAs and did not work behind a chair. I learned that there were algorithms for almost every problem in the salon business that had been worrying me when I started to grow. I have been able to delegate more responsibility to my managers and now take off Saturday and Monday. But I still work 12 hours four days a week. I also found that I love to restore old buildings. I have purchased two more with a partner who is in the real estate business and am looking to do more real estate development. I am also looking at others ways to expand my salon business.
How to Prepare to Become a Stylist or Salon Owner
- Today you have to go to beauty school to become certified. You can no longer get a certificate through an apprenticeship program. These schools vary in price and there are some scholarships available. Shop around.
- Make sure you are committed to being a professional hair stylist and not a hobby stylist otherwise you are unlikely to build a good book of business that will sustain you. Only about 10% of the people who graduate from beauty college are still in the business after three years.
- Be willing to start at the bottom and learn everything you can from the people above you. If you have talent, work hard and are patient you will rise to the top.
- Find someone in the business you want to emulate and try to get him or her to train you. Having a good mentor is a great advantage.
- Start saving early and live within your means. That way when the time comes you will have the capital you need to start your own business. I started saving when I was 19 and when I became successful I often saved half of what I made.
- Pay for someone to do things you don’t like to do or are not good at. For me this first meant hiring an accountant and lawyer and later a building designer and salon consultant.
- Build a good personal credit history. This is key for you to be able to obtain business financing.
- Have two accounts for your business, an operating account and a savings account where you make regular contributions. That way you can handle emergencies like replacing an air conditioner that seem to happen as a regular part of running any business.
- Be nice. Build long-term relationships with your customers and employees.
Being a stylist can be a good career opportunity for people with artistic talent who can also build the strong personal relationships that are necessary to build a book of business. A computer can never replace a stylist. The business is also pretty much recession proof. During the depression women still got their hair done and bought a tube of lipstick. Appearance is important and people have historically cut back in other ways when things are tight in the economy.
I am now 40 and very humbled buy the loyalty of my customers, employees and my long time business partner. I also feel fortunate because I love what I do and cannot imagine retiring. Most people work because they have to and not necessarily because they like their work. I was also fortunate to have had people who have mentored me at every stage of my career and I have always appreciated what they have done for me. It is now my turn and I want to give back and become a mentor to young people by training and teaching. If there is an interest, I would also like to work with YPNG to develop a discussion board or do a Skype conference where I could answer questions from YPNG members about hair styling as a career and running a salon.