We're Still in Business. Now What?

by Jeff Pulford

Jan and Artie took their first weekend off in years. It was September of 2010 and they felt they needed to re-evaluate their salon business, and their life … a "retreat weekend" was in order.

They met as high school sophomores in Center Harbor, New Hampshire, a small community on the shores of Lake Winnipesaukee. They enjoyed life, hated school and didn't much care about the future. They were smart, adventuresome, and as it turned out, very talented.

Bill (Jan's Dad), watched as Artie and friends celebrated with Jan on her 21st birthday in the usual, crazy way. The next day, he cautiously asked about their future plans. After a typical non-committal answer, he asked if they would be interested in the beauty business.

Jan's Dad recommended a private beauty college that specialized in training colorists.

Three years later, they were the proud owners of J & A Salon in Tucson, Arizona.

Jan and Artie put their all into business, attracting good employees and booth renters. They leased a space in a neighborhood of middle class working families. The quality of their work was superb and they prospered.

But then, the recession of 2008 hit, which Artie described as a disaster for them. However, being tenacious, they worked harder, cut every possible expense, laid off unproductive employees, and kept their best booth renters.

As their retreat weekend approached, they were tired, a little scared, and confused about what 2011 would bring. That first night, they decided to try a fresh approach and called Jan's Dad, Bill. It was he who had recommended the beauty industry, helped a little financially and they trusted him.

Bill owned an insurance agency dedicated to the beauty business and was thrilled to be asked to provide the counsel they desired. He knew Jan and Artie could use some business insights to be successful in the coming, difficult years. The simpler ride of easy money from plentiful clients was over. It was back to basics. He explained that their artistic skills were a given, but that good business practices, ethics, and a fail-safe insurance program would help set their salon apart, and attract and keep good clients.

Bill flew out to Tucson, intent on helping Jan and Artie. He got right to work, reviewing their financials, business practices and procedures, and completed a salon inspection. The three started a list of things important to the business that included:

People: Themselves, salon workers, referrals, friends, distributors, and vendors.

Financial: Accounting, profit and loss, pricing of services, costs of running a business, lawsuits, catastrophes, disability, and workers compensation.

General: Marketing, advertising, education, health and welfare.

Clients: They focused a lot of their discussions on their salon clients. Artie and Jan decided their clients chose their stylist because they liked them and their work, had pricing they could afford, and offered reliability, and convenience. They noted that in this down economy, their customers were watching every dollar; and in the wake of some local stories in which customers had been harmed by beauty services, clients were more mindful of safety concerns. The three of them developed a goal of offering an oasis of comfort and safety in their professional salon. They made a list and reviewed solutions to achieve this goal.

Pricing: A simple-to-understand menu, sensitive to what clients can afford to pay.

Money: Make it easy for clients to pay. Cash (change ready and safety precautions in place). Credit Cards and Debit Cards (make sure the salon's credit card vendor is easy, safe, and inexpensive. Other (these are hard times, consider options such as trade and payment plans).

Insurance: Clients must and should know real protection is available. General Liability for slip and falls, products sold, and lease compliance. Professional Liability covering the salon and its employees, including off premises events like weddings. Booth renters must obtain their own insurance policies. They are independent business people. They need to protect themselves and their clients and not expect the salon to do so. Property and loss of income coverage is also important.

Health and Safety: Salons are full of plumbing, electrical devices, and chemicals. Inspect, clean and verify safety. Also, ensure the salon staff doesn't transmit flu or colds to each other and/or clients.

Within a week, every task on the list was completed. The electrical and plumbing issues were repaired. They updated their money procedures and insurance. The salon was clean and safe, well-marked with the bathrooms spotless. Aside from their time, the total cost was $522 including $318 for electrical and plumbing.

Jan and Artie were elated, confident they would keep their current clients and excited about their next project.

Looks like 2011 is going to be a great year!

Jeff Pulford is the owner of Pulford Insurance headquartered in Salinas, CA. Thirty-seven years experience insuring salons and spas, independent stylists, beauty colleges, and barbers has given Jeff a unique perspective on the importance of business acumen that distinguishes the financially successful salon professional. Jeff can be reached at 831-758-9449 or InsureBeauty.com.

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