Grow my Team or Go Solo ?

By Jay Chapman

Salons come in all shapes and sizes, from pocket-sized microbusinesses to bustling teams of epic proportions. What’s the sweet spot for you? Making the most of your current size, or taking a leap and expanding your team? Should you stay the same or should you grow your business? Let’s take a look at the pros and cons, because there’s lots!

There’s always risks associated with growing your business, especially when it comes to employing team. Wages are usually your biggest expense and wages are attached to PEOPLE! And people can be... well... hard bloody work!

As with almost every salon dilemma, you (the salon owner) are the problem AND the solution! And growing your business is a choice! So, what’s the attraction of a bigger team?

We hair and beauty people are pack animals. We do our best work when we bounce off one another, share ideas, support and confide in each other. Studies show that people looking for work in our industry are often drawn to salons with bigger teams. There’s a perception that bigger salons have a proven model, stronger client base, plus better conditions and opportunities for staff. (Not always true but anywho!)

When you decide to grow your team, your profit margin is one of the first things to consider. Overheads will be growing, superannuation will soon hit 262526% or whatever it is, the tax man is getting hungrier and more greedy, commercial rents are chubby and staff know their entitlements inside-out and back-to-front (just as they should).

All this adds up to your baseline expenses being high. The revenue a pocketsized salon needs to turn over each week to break even and stay afloat is creeping up, chewing away at already-thin profit margins.

Across the hair and beauty industry, profit margins vary massively. Between 10% and 25% is pretty standard but leaves next-to-no wriggle room if you are not careful with how you grow.

Because of the above reality, we’ve seen a huge trend of salon owners and employees opting for in-home set-ups. And why not? No more travelling to work, car parking or massive rents! Not to mention the obvious advantage... NO workmates to deal with!

Then there’s the downside. The monotony of working where you live and the isolation that comes with being a “onesie” doesn’t cut it for many in our “social butterfly” community. Plus! When you really crunch the numbers and manage your money properly, the margins ain’t that crash hot in the end!

Sure you have great flexibility, but you still need to pay tax in the business and personal tax, put money away for your retirement in superannuation, have an accountant and bookkeeper, pay for your products, put money aside for your holiday pay and for when you’re sick, you have your bank fees, eftpos, software fees... Plus a lot of clients expect a lower price point because they are having a service done in a small operation or from someone’s home.

So, what IS the solution? Many salon owners contact me seeking advice and clarity around what is the right next step for them. Together, we unpack what’s really happening in their salon, take an honest look at what’s possible, and get clarity around the best and most logical steps forward.

Sometimes, the best option is to stay AND grow but this really comes down to what your vision is for your career and business! You can train your salon team in a way that creates a more streamlined environment, enabling you (the salon owner) to step back while your team does their thing. I know that I always wanted a team around me because I have a very specific skill set, and I need people to plug those gaps so we could be the complete solution.

I know for sure that having only one, two or three team members can be a false economy. One team member leaving (for whatever reason) creates a huge hole in your salon’s earning capacity. And that can be paralysingly stressful! I found my profit margin, stress levels and balance was at a sweet spot at around 8 members.

Choosing to have a micro salon with a very small team means your business is in a higher risk category. You just need to own that risk and work with it. Done right, it’s a profitable business model. I’ve worked with many “micro category” salon owners with thriving, profitable, safe and sound businesses.

Small-scale is not for everyone. If you feel the pull to grow but don’t know how to move forward on it, start by understanding the FIVE things most likely to be holding you back from growing to where you want to be.

1. Slow momentum: This takes many forms, most commonly a simple lack of business smarts around when, how and why to grow a salon business. You simply get stuck, typically in a frustrating “one step forward, two steps back” rhythm.

2. False safety: You find yourself in the perfect, safe sweet spot! 2 members and everything running just fine. The truth is, once you settle for “just fine”, you stop trying and everything slows down. You need to keep pushing forward, always planning for your next team member and keeping your marketing machine cracking!

3. Lack of planning: Few salon owners expand to having a big team and thriving business without a plan and clear goals. The bigger your business, the more crucial it is for you to stop stabbing in the dark and start planning for where you want to be. Fast-growing businesses are not based on winging it.

4. Stuck on the floor: The bigger your team, the more time you need to spend on the backend of your business. Working 40+ hours each week cutting hair or in the beauty room is a tick-tocking time bomb for any growing salon business.

5. Comfort zone: We’re all human. We’re hard-wired to opt for the path of least resistance through life. When you have a team to keep busy with clients and a culture to keep aligned, you have to get comfortable with being uncomfortable.

At any given time in your business, you have two choices, step forward into growth or step back into safety. Both are valid choices. But if you do desire to grow, know this... everything you have ever wanted begins just one step beyond your comfort zone. The only things holding you back are the walls you build up around yourself. The good news? You built them, you can also knock them down.

Growing a business and being self-employed is challenging no matter what size salon you have. You just have to pick the challenge that’s right for you based on the pros and cons and the risks!

Jay is a specialist salon coach at Your Growth Coaches. For more salon wisdom, visit the YGC website www.yourgrowthcoaches.com.au