It's None of Your Business

Professional Shares her Personal Struggles of becoming a Salon Owner

By Ellen P. Young

After working for three salons in 18 years, I received my independent contractor's license and decided to open up a salon where I would be a fair and nice salon owner.

I put together a business plan and went to five different banks to get a loan for a $50,000 build-out. There were 10 stylists on board to start the salon that would have 15 chairs. I wanted to keep our rent low for a higher profit for them.

After construction started, I had emergency back surgery, which put a damper on my plans to do much of the painting to save money. The build-out with furniture turned out to be a whopping $120,000. I took out another $25,000 loan and cashed out my retirement.

"No problem," I thought. "I'll make enough money and no one will ever want to leave the salon because I am a fair and nice salon owner." Luckily, the stylists chipped in by cleaning, painting and even helped decorate the salon since I was still recovering from my surgery.

All was great at first, and I had no problem recruiting new stylists. We were full the first year. I was able to pay the $1700 a month loan payments which would be paid off in five years. I lived in a cheap apartment because of my divorce one year prior and I could start saving to buy a house.

Then, it was like a bomb went off.

Two salons opened up within a one mile radius of my salon. One salon owner used a color representative to promote a color class which was nothing more than a recruiting session to get some of our stylists to go to his salon.

Three of the stylists went, and all put in their two weeks' notice. Two more stylists put in their notice for the other salon. I was down to nine stylists and 15 chairs; my salon was below break-even point, and I had just bought a house. I cried for two days. I was so afraid we were going under.

I could make it; I had my stylists to worry about. I had my sons to support. I changed my business plan, and marketed new employees because I couldn't find independent contractors with a clientele. I spent thousands of dollars to promote them. The problem was, all they wanted to do was come and go like the independent contractors; they did not understand they had to be there and answer phones just like we did back in their day.

I was a nervous wreck and then, I had stylists, stirring the pot. They decided that if I didn't redecorate after five years of a build out, they were going to walk out. I had to borrow against my business loans.

I got rid of the stylists who were a cancer and never did laundry or shop duties. Meanwhile, another stylist, who started from the very beginning told me she wanted to open up her own salon one day but would never recruit my people. I referred her, what I call the golden client…the one who refers you 20 clients or so, she would never betray me.

I worked hard, filled the salon, and two years later that same stylist who told me she wanted to open up her own salon and wouldn't recruit my stylists, did. She opened up a salon a block down the road.

It will take me eight and one-half years to pay off my business loans for running a business for nearly seven years that in reality provided an environment where others could work their businesses from. I'll be 57 when I pay off this debt. I opened up the salon when I was 38. All I wanted to do was be a nice salon owner…

Here are a few things I've learned from my personal experience that I hope other potential salon owners can learn from my mistakes.

Good luck to you if you are a current salon owner and if you are thinking of owning a salon, think really long and hard, especially if it is an independent contracting salon. For some reason a lot of independent contractors feel like they have some kind of equity in your salon. They need to know that you are the one taking the risk, not them and they need to mind their own business when it comes to your decisions.