Opening a new salon with no clients (please help stylists & owners)

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sliver108

Member
Joined
Apr 24, 2015
Messages
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Location
Pa
Thanks you for reading this far, THANK YOU! Please help provide us with some insight. I, the husband, have been working 40-60 hours a week on our business plan for months now. It has reignited an interest that I had in this industry from years ago so much so that I want to become an apprentice or go to school a year after we open to practice this craft myself.


Yes, you read that correctly. My wife was a stylist for 13 years but 3 years ago she decided to pursue another career. She went down to part time for a year and then around 2 years ago stopped working in a salon completely. She did not leave for financial reasons. She was able to build a very nice clientele book and have a great lifestyle while working at an upper class salon for her last 7-8 years. We have chosen to open a salon because we feel we have a lot of the pieces necessary to run a successful salon(s). The only thing that worries us is the last part of this post’s title, “0 clients”. Obviously this is a large contributing factor when it comes to the success of the salon at first. Financially we will just be able to get this thing of the ground but if we ran into problems with profitability we would not be able to flip a $100,000 bill in that area. We already expect it to be half that approximately but double that would shut us down or be almost impossible.


Currently our monthly expenses are around $28,000 and we will be a commission based salon. So to be conservative and say the stylists will take 50% of all revenue we would need to have revenues of $14,000 a week or $56,000 a month. I come from the restaurant industry where we would easily do $18,000 on a Saturday but your industry is foreign to me numbers wise and my wife never saw the management/number side of her/your business. We are in the Pa in an area of considerable wealth were women’s cuts easily “start” at $45-$50 and other services are proportionate.


My main question is this….what should we expect when we first open our doors? Obviously marketing and location will play a large parts as well as hiring stylists with decent client books. I am aware that my wife having a book of 0 clients and her being the only contributing (or maybe noncontributing) owner is a shortcoming off the bat. Using $4,000 a week in revenue (on the high end but very possible around here) that she would be missing I figured we could just pad that into 8 other stylists at $500 a week per stylist since we would need most of our stylists (10 stations total) would need a book to be hired by us. So when you look at it that way it isn’t as bad. I just think my other numbers are off as far as expectations and of course I realize all situations are different. The numbers/expectations I am worried about are as followed….


#1 revenue increase percentage and profitability/break-even

1st month $5,000 a week or $20,000 a month

Then increasing by $275 a week or $1,100 a month until the beak-even is hit at around the 9th or 10th month. From what you have witnessed at a new salon are these number too low or too high? I can’t imagine most salons investing over $90,000 or $100,000 in this start-up area.


#2 Am I seriously just being overly conservative and scared when it comes to salon generated clients? We plan to do heavy social media marketing; an aggressive client referral program; and around $5,000 in initial advertising and then $1,800 a month in advertising and then increasing based on revenue to around 3.5%. Besides the affluent area we will be located in it is also very suburban and built up retail wise. We will have to forgo the pricey SF price of our local “Lifestyle” shopping centers but are not planning on being hidden in an alley. Most likely we will be in a strip mall or stand alone. What are the percentage rages for salon generated clients vs. stylist generated clients? I just have no idea how many clients we will be able to bring in.


So what do you think?
 
Firstly, clients won't just come flocking through the door when you open. For the first month before opening you need to promote and market your socks of, flyer drops through letter boxes, local magazine ads.

As for percentage cocommission, that depends on a couple of factors.
Who will be supplying the product?
Will they be employed and.a commission rate paid on top of their wages?

Not sure how you work over there but in the UK if the owner supplies products it generally is 60/40, 65/35 the higher to the owner. Some do a 50/50 split. If they supply ptoducts.if they are self employed they take charge of their money, clients and pay you.

If it's employed some.do a commission rate on retail products sold.
 
I can't even think about all your figures. It's too early! First coffee is kicking in.

A few thoughts. Why will people come to you? Why will they change where they're currently going, for your salon? Do you have a usp or anything to make you stand out? This doesn't have to be big. The salon near me serves prosecco. It looks lovely and I want to go there and get my hair done. Shallow eh?

As a guideline, in the first year, you will most likely lose money. In the second year you may break even and in the third year (if the first and second have been survived) you may turn a profit!

You're talking big figures and being the creature of caution that I am, that can also mean big losses.

You may make a go of it and it may be fantastic but whenever people look at doing this with no client base whatsoever, I do wonder where they think their clients will come from.

I started out with a solid client base and have grown organically. As my clientele has increased I have employed staff. As the business has gained money, I have moved into larger premises and sublet rooms. All while working my arse off for the crappest salary and continually striving to get more and more clients.

I wish you the very best of luck and please keep us up to date with how it all goes.

Vic x
 
Echo above! I only started breaking even 18 months in. I will have been in business 2 years in July and I always planned for not turning a profit until the 3rd year but it looks like I am on track to do that and hopefully a bit sooner! We were not a salon and started from scratch and it takes time to build up, it won't happen over night but just be patient and stick with it, provide the best service you can and kiss goodbye to your free time! It's worth it though, I'm so happy I did it. Currently living off my tips and handouts from my hubby (never had less money in my pocket than at the mo, even when I was an apprentice! )but don't have any regrets yet!
 
Thank you very much for the responses and I will be sure to properly respond after I get a little rest (it is 5:40AM here).
 
1st question is why do you need staff if your wife is a stylist, just have her only untill she is fully booked every week, only then will you be ready for a commission stylist. The running costs of your salon sound very high that concerns me as some times in the early days it's normal to have completey dead days with 0 customers. I'm 18 months into by business and only now have enough customers to confidently cover bills and my overheads are approx £200 a week! A business plan is all good but you have no business if u have no customers. Could your wife build a mobile client base now while u take care of setting up the salon so you will at least have some customers to bring? I had a large mobile round before I opened and I have doubled my client base since opening but still I'm only in the position to take a very small amount for drawings (it covers our weekly food shop) my business plan showed fantastic figures but without the customers those figures unfortunately just arnt realistic
 
Firstly, clients won't just come flocking through the door when you open. For the first month before opening you need to promote and market your socks of, flyer drops through letter boxes, local magazine ads.

As for percentage cocommission, that depends on a couple of factors.
Who will be supplying the product?
Will they be employed and.a commission rate paid on top of their wages?

Not sure how you work over there but in the UK if the owner supplies products it generally is 60/40, 65/35 the higher to the owner. Some do a 50/50 split. If they supply ptoducts.if they are self employed they take charge of their money, clients and pay you.

If it's employed some.do a commission rate on retail products sold.

I couldn't agree more that clients will just not come flocking through the door. We were planning on a heavy marketing plan starting 1-3 months before the opening. It includes everything you said and a whole lot more. How much time and money did you spend doing this?

We will be supplying the product. My wife is used to stylists getting mad that commissions are too low and then on the flip side they also get mad when I product cost is taken out (even from gross sales and not just their cut). Honestly, I/we just want to be upfront with what we are doing so there is no miscommunication and resentment. At the same time I would like to sell our potential stylist a great pay plan. Recouping a product cost via a subtracted percentage or dollar figure per each stylist makes the most sense to me. That way they are only paying for what they use. The argument from their side is always "that is the cost of doing business so why does the owner make me pay it". In reality we all know that our overhead partly dictates how much the stylist walks with anyway but the message of this "varying cost based on their services" is often lost. It sounds like the UK has some common sense people over there ;-). It sounds like there is more of a standard way of doing the split with all parties understanding.

In Pa we have to pay a minimum wage if the commissions do not equal that amount or greater. For all intensive purposes we are straight commission.
 
I can't even think about all your figures. It's too early! First coffee is kicking in.

A few thoughts. Why will people come to you? Why will they change where they're currently going, for your salon? Do you have a usp or anything to make you stand out? This doesn't have to be big. The salon near me serves prosecco. It looks lovely and I want to go there and get my hair done. Shallow eh?

As a guideline, in the first year, you will most likely lose money. In the second year you may break even and in the third year (if the first and second have been survived) you may turn a profit!

You're talking big figures and being the creature of caution that I am, that can also mean big losses.

You may make a go of it and it may be fantastic but whenever people look at doing this with no client base whatsoever, I do wonder where they think their clients will come from.

I started out with a solid client base and have grown organically. As my clientele has increased I have employed staff. As the business has gained money, I have moved into larger premises and sublet rooms. All while working my arse off for the crappest salary and continually striving to get more and more clients.

I wish you the very best of luck and please keep us up to date with how it all goes.

Vic x

I COMPLETELY am the same way with my coffee intake. My wife and children know not to bother me until it starts working :).

The last restaurant company I worked for was heavy into their branding and I took a lot of notes. There are of course the obvious reasons such as they know the stylist; they having been looking to switch and just needed a motivator; and they are new to area. Our USP's will fit into 3 areas. First we are going to be HIGHLY client service oriented not only from the time they walk in and walk out but from their first contact and ongoing. I am a big believing in over the top client/customer/guest service.I am developing a system currently that will support this. Second we are going to offer just a little more and this could be tied to number one. A glass of wine or a beer...of course. A very detailed consultation at first and then ongoing thorough ones to make sure they are completely happy...absolutely. Third and most importantly we are going to be education based and of course this could tie into number one and two. We want the client to understand what a certain product does for their hair, how their hair works overall with certain styles; and hoe to closely match that "just done salon look" as close as they can at home. My wife would also like to offer classes and things like Friday night happy hours were things are explain while they have a drink and get done up for date night etc.

I am fully aware (and not happy ;-)) that it will take a while. I am still hammering out some profitability projections. How much did you fork out up until your break-even point Vic x?

I guess the figure seem a little large to some and some may shrink but they seem to be inline for our area etc. Two salons near us pay $18 a square foot (yearly) and this is not uncommon. Their is also a loan in there and the other costs realistically can't go any lower without possibly hurting business.

Trust me we are a little scared as well lol. We plan on hiring some experienced stylists so that should help. I mean you can't hire only apprentices and assistants and expect to survive even if you yourself had a full book, in most cases.

Maybe we are trying to "grow into our business" a little more than most but I don't feel it is completely overboard. On the flip side I would worry about the lack of revenue that wouldn't be generated from other employed stylist; being stuck in a lease and unable to grow; and then outfitting a larger location after the first was done. You do bring up some good point however and the experience to prove it.

Thank you very much for your response.
 
I read an article yesterday about charging the stylist for the colours when their on commission, it's not seen as right anymore because the client is covering the cost of the product so why should the stylist also pay for it too
 
I would say if it's your dream then go for it! Although, same for me as others have said my first year I lost money, second year broke even and finally in my third year I'm making money and doing well! I think you have all the right ideas just research the area really well and only do it if you have the money there already to back you up during the tough times :)
 
Echo above! I only started breaking even 18 months in. I will have been in business 2 years in July and I always planned for not turning a profit until the 3rd year but it looks like I am on track to do that and hopefully a bit sooner! We were not a salon and started from scratch and it takes time to build up, it won't happen over night but just be patient and stick with it, provide the best service you can and kiss goodbye to your free time! It's worth it though, I'm so happy I did it. Currently living off my tips and handouts from my hubby (never had less money in my pocket than at the mo, even when I was an apprentice! )but don't have any regrets yet!

If I may ask how much money did you have to put out of pocket over the last 20-21 months at "artificially break-even"? What free time lol? I am so used to working hard long hours of 70-90 a week. Actually I love working with people and building a business. I think this is very rare imo. My bosses used to ask me why I left work at 3:30 AM. Simply put, I feel it has given me an edge in certain areas. It is a competitive thing I think. I just don't want anyone else to "outdo me". When I feel like I am getting slightly burnt out I chill out for a while and recoup. When I start to train to be a contributor in our salon I will most likely fall asleep with scissors in my hand and stab myself in the eye.
 
I COMPLETELY am the same way with my coffee intake. My wife and children know not to bother me until it starts working :).

The last restaurant company I worked for was heavy into their branding and I took a lot of notes. There are of course the obvious reasons such as they know the stylist; they having been looking to switch and just needed a motivator; and they are new to area. Our USP's will fit into 3 areas. First we are going to be HIGHLY client service oriented not only from the time they walk in and walk out but from their first contact and ongoing. I am a big believing in over the top client/customer/guest service.I am developing a system currently that will support this. Second we are going to offer just a little more and this could be tied to number one. A glass of wine or a beer...of course. A very detailed consultation at first and then ongoing thorough ones to make sure they are completely happy...absolutely. Third and most importantly we are going to be education based and of course this could tie into number one and two. We want the client to understand what a certain product does for their hair, how their hair works overall with certain styles; and hoe to closely match that "just done salon look" as close as they can at home. My wife would also like to offer classes and things like Friday night happy hours were things are explain while they have a drink and get done up for date night etc.

I am fully aware (and not happy ;-)) that it will take a while. I am still hammering out some profitability projections. How much did you fork out up until your break-even point Vic x?

I guess the figure seem a little large to some and some may shrink but they seem to be inline for our area etc. Two salons near us pay $18 a square foot (yearly) and this is not uncommon. Their is also a loan in there and the other costs realistically can't go any lower without possibly hurting business.

Trust me we are a little scared as well lol. We plan on hiring some experienced stylists so that should help. I mean you can't hire only apprentices and assistants and expect to survive even if you yourself had a full book, in most cases.

Maybe we are trying to "grow into our business" a little more than most but I don't feel it is completely overboard. On the flip side I would worry about the lack of revenue that wouldn't be generated from other employed stylist; being stuck in a lease and unable to grow; and then outfitting a larger location after the first was done. You do bring up some good point however and the experience to prove it.

Thank you very much for your response.
I employed the minimum I could and spent the minimum I could. I didn't do loans or debt and had no savings at all. So I worked up a full column so I was stacked out and employed my first member of staff on 20 hours a week and tried to build her column. She has worked incredibly hard to build her own client base. Just as we settled into having some money the opportunity came up to expand into the rest of the building. We put every penny into that, paying for things as we went.

I have frequently had no money to take home for me but have managed to pay my staff. She is also my daughter so has an interest in this working. From day one, I made it clear there were no free rides. If she doesn't cover her salary there's no job. Last week I paid her for a 50 hour week. She has, fortunately inherited her mother's work ethic!

Alongside this, my husband works to pay the household bills so we're not that dependent on my income, so if there was no money from me, we'd muddle through. If there was money, we'd feast. I would reiterate here that my salon has had to totally fund itself. I'm not some 'trophy' therapist, playing at running a business. This HAS to work, and all indicators are that it is.

We became Ltd to protect our home etc from bad debt and this has been a good move for us as spending etc has been really monitored.


Vic x
 
1st question is why do you need staff if your wife is a stylist, just have her only untill she is fully booked every week, only then will you be ready for a commission stylist. The running costs of your salon sound very high that concerns me as some times in the early days it's normal to have completey dead days with 0 customers. I'm 18 months into by business and only now have enough customers to confidently cover bills and my overheads are approx £200 a week! A business plan is all good but you have no business if u have no customers. Could your wife build a mobile client base now while u take care of setting up the salon so you will at least have some customers to bring? I had a large mobile round before I opened and I have doubled my client base since opening but still I'm only in the position to take a very small amount for drawings (it covers our weekly food shop) my business plan showed fantastic figures but without the customers those figures unfortunately just arnt realistic

The stylists we hire at first would have to be somewhat established. We are only looking for very meager service revenues from these stylists at first and then around $1,600 a week by around the 9th month. These are not ridiculous in our area. A bunch of my wife's friends do $3,000-$4,000 a week in service revenues.

My numbers concern me as well lol. However considering our area they are not that high. I was very conservative just to let you know. How the hell is your overhead that low?! My wife has kept in contact with a lot of her stylists that are itching to be "cheerleaders" for us to a degree.
 
The stylists we hire at first would have to be somewhat established. We are only looking for very meager service revenues from these stylists at first and then around $1,600 a week by around the 9th month. These are not ridiculous in our area. A bunch of my wife's friends do $3,000-$4,000 a week in service revenues.

My numbers concern me as well lol. However considering our area they are not that high. I was very conservative just to let you know. How the hell is your overhead that low?! My wife has kept in contact with a lot of her stylists that are itching to be "cheerleaders" for us to a degree.
So you mean your only taking on stylists WITH a clientele to bring with them? $1600 is approx £800 in uk money I have never ever reached that amount in services in a week :/ and I'm pretty busy nowadays. A salon I used to work for was very highly priced and their stylists used to make £2500 at the busiest per month and that place was established for years. What does an average week look like for these stylists? Are we talking extension services? Colours? I can see that it's much of the normal cut and finish type of clients to bring in that much? As for the cheerleaders lol you'll soon find out who your real friends are once your opened a few weeks, I had friends that promised me the earth and then disappeared. My overhead is so low because I am extremely careful with my money. Please don't take this bad but you seem to have a lot of cash to throw around which means you have a lot to loose. I diddnt have that luxury. I started my salon with £3000 that was the entire shop fit out, decor, fixtures, electrics, stock... Everything. Because I started out with nothing I have so much drive to make it succeed there's no way I can risk failure by being silly with cash. The rent on my property is around £250 a month, the location is like the sort of strip mall type place you mentioned earlier. I wanted bigger and better but it would have cost me £1000 a month, so I took the cheaper option. All my bills are definatley the cheapest (I haggle people say I'm in the wrong business with my tactics lol) and I get stock as and when I'm running low. I have a helper on Saturdays who is family & I rent out a chair to a self employed stylist for a set amount per week. It's taken me 18 months to comfortabley pay the bills and I'm not in a position yet to have enough customers or cash to employ anyone. My 1st business plan was great, showed I'd be making £50k plus year 1 then upwards to 100k on year 3... Reality is, I had a loss of £1000 ish for year 1. Year 2 has come in at £2000 profit which I have used @£50 a week to feed my family. My figures diddnt show me that! Do a best and a worst case scenario business plan, use say 4 customers a week for your worst case & see how your figures come out. I had some weeks in the beginning where I diddnt even get 4 customers mind!
 
If I may ask how much money did you have to put out of pocket over the last 20-21 months at "artificially break-even"? What free time lol? I am so used to working hard long hours of 70-90 a week. Actually I love working with people and building a business. I think this is very rare imo. My bosses used to ask me why I left work at 3:30 AM. Simply put, I feel it has given me an edge in certain areas. It is a competitive thing I think. I just don't want anyone else to "outdo me". When I feel like I am getting slightly burnt out I chill out for a while and recoup. When I start to train to be a contributor in our salon I will most likely fall asleep with scissors in my hand and stab myself in the eye.


Hi there, well at the time I opened, I still kept my other job working as a college lecturer which I reduced to 18 hours a week and so had my income from that and was prepared not to have any salon income for 1st 2 years whilst the business grew. So the days I wasn't in the salon I employed a receptionist 20 hours a week as I didn't want my stylist left on her own for long periods of time as she was only 19 and I didn't think it was fair to leave a newly qualified person with that much responsibility. I also had some other p/ t stylists initially but it was too soon with not enough business so I then had a couple of girls that were happy to just help out as and when I needed which suited us both. I was finding that at the end of every month, I was really struggling to find the receptionists wages and that without that expense I could break even. My hubby was having to help me out each month to make sure I could pay her. It was a tough call as she was my friend but she understood and much as I loved having her there and she was a great help in the first year, I had to let her go in the October as I just couldn't justify it. By then my stylist was over 20, much more confident and I didn't feel bad about her being there on her own on the days I Was working at college. Luckily my receptionist found a new job within a few weeks so it all worked out ok and since then I also had the opportunity to take redundancy from my college job so left there at the end of January and am at the salon full time so my stylist only had a few months of working on her own! since I have been there full time, I am already noticing the difference in rebookings etc and the salon is doing really well. If it can just maintain this level and hopefully continue to grow I will be really happy as it is starting to stop feeling like an expensive hobby and more like a potentially profitable business!

My redundancy money will last me until September if I am good, so I intend to start paying myself a wage from then. Probably not as much as I got from my previous employment but at least something to start with even if it's just the minimum wage to stay below tax threshold! I'm lucky my OH is able to support us financially during this time but I am used to having my own money and would hate to be dependent on him all the time!

So if I can give any advice, it's to keep your wages bill to the bare minimum. I was definatly over ambitious and thought I Would have enough work to keep 2 stylists busy every day but that wasn't the case and was an expensive mistake!
 
I can echo all of the above......As much as I would have liked to open my salon with a 'TEAM'.....Thankfully, with some words of wisdom from my sister, who has 'been there, seen it, and got the T shirt',
I opened with, ME, MYSELF & I.......
Sometimes it was a little 'awkward' when client's say "Oh, is it just you on your own....?
I'd say "Yep, how lucky are you, you will be given my undivided attention!" :D
Before you leap in with both feet.....look at all the salons around you.
Are they banged out every day.....
Also, look at the 'businesses for sale' sites.....I see many salons that I thought were doing 'really well', but in reality, they are 'on the market', obviously not all is what it seems.......
And yes, people may say they are 'raking it in'........earning $$$$$$..........in my experience, no one will shout from the roof top's, ' My business ideas gone a bit s**t! :oops:
Just make sure you do your homework :)
 
I read an article yesterday about charging the stylist for the colours when their on commission, it's not seen as right anymore because the client is covering the cost of the product so why should the stylist also pay for it too

This whole product cost thing makes me think of the way car dealerships over here (the US) sell cars when you have a trade in. You are looking to buy a new car and at the same time trade in your old one. It is the salesmen job to find out what where you value a larger discount. They can give you more on your trade in but the discount will not be as large on the new car. Or they can give you a very large discount on the new car and give you little on your trade it. It all comes out in the wash and ends up being the same in the end. It is a smaller commission with included product costs or a larger commission with a separate product cost via % or $ amount. I am truly looking out for the stylist when I say that a separate product cost is better. Some will simply use more than others so why should the stylists not using the product be charged via a lower commission. I also have a hard time understanding why so many people are thick headed about the hair salon's business model in general. "When you get your car fixed there is a part cost and a labor cost so why is it different with hair salons"...this is a comment I hear often. Well why when you eat out at a nice place doesn't your bill have a chef's fee and then food fee lol. Because that not the business model and I am sure years back that could of happen but someone decided to use common sense and realize that the perception is that the customer is being nickle and dimed and would feel the value was as great. Either way it is a cost of doing business that "wouldn't have existed" if that service was not being performed and that product wasn't being used. An example would be this.... Why should a new/apprentice stylist charging a lot less for a cut and color that is using hardly any product be equal to a an established "colorist" charging twice the amount when they are using "a lot" more color. That is why I don't agree with lumping everyone together. The more you use, the more you pay.

I was curious and looked at the housing values of your area and I was shocked to find out that they are no different from here...well not drastically. I was trying to gauge the numbers you were throwing out at me. A 500 sf salon here in a less than desirable area would still cost $500 a month in rent. By undesirable I don't mean poor exactly but poor enough where we would have to cut our prices in half. We are not NY but a lot closer to NY then poorer county areas of the south. Women expect to pay 45-60 a cut not to far from us around where we want to set up shop. They just wouldn't travel to the areas where rent is lower to send that kind of money. The only left to do would be to match the market pricing and even though my wife has cut on the side for 2 years she was charging $45 for a mens cut and has the experience to ask for that. Unfortunately but I guess fortunately we need to be in a market that will pay that. Of course the bills will go up but then again so will the revenue. You have to be in the right area with the right prices.
 
I would say if it's your dream then go for it! Although, same for me as others have said my first year I lost money, second year broke even and finally in my third year I'm making money and doing well! I think you have all the right ideas just research the area really well and only do it if you have the money there already to back you up during the tough times :)

It is my dream Lil lisa and my wifes as well. We just feel like we can do a better job with all of the aspects of running a salon. That may have come off sounding a little snotty but we have so much experience combined that it just doesn't make sense not to do it. Not to mention decent credit and some cash. I notice a lot of stylists that become owners making silly amateurish business mistakes. My wife learned the trade for 16 years and currently runs a business in another field (finance, hr, payroll etc.). I have managed; done operations; some marketing; and most importantly client/guest/customer service with a VERY strong focus on retention. We are absolutely prepared to have a loss and it would be naive to with otherwise imo.

I really do appreciate your response and thanks for the wishes. This is obviously a little scary for us. On top of that I am a fanatic about seeing around the corner as much as possible but I also realize the rest will be seen and felt once the doors open.
 
Very best of luck. Keep us in the loop x

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I employed the minimum I could and spent the minimum I could. I didn't do loans or debt and had no savings at all. So I worked up a full column so I was stacked out and employed my first member of staff on 20 hours a week and tried to build her column. She has worked incredibly hard to build her own client base. Just as we settled into having some money the opportunity came up to expand into the rest of the building. We put every penny into that, paying for things as we went.

I have frequently had no money to take home for me but have managed to pay my staff. She is also my daughter so has an interest in this working. From day one, I made it clear there were no free rides. If she doesn't cover her salary there's no job. Last week I paid her for a 50 hour week. She has, fortunately inherited her mother's work ethic!

Alongside this, my husband works to pay the household bills so we're not that dependent on my income, so if there was no money from me, we'd muddle through. If there was money, we'd feast. I would reiterate here that my salon has had to totally fund itself. I'm not some 'trophy' therapist, playing at running a business. This HAS to work, and all indicators are that it is.

We became Ltd to protect our home etc from bad debt and this has been a good move for us as spending etc has been really monitored.


Vic x

I am not sure how it works over there with minimum wages but I will explain how it works over here. We live in Pennsylvania and the salon will be in Pennsylvania as well. This is technically and legally called a "commission only" employee. We have to pay $7.25 an hour if that is not met by commission. You are talking about being out $290 a week if no service revenue is produced. At around $625 in service revenue a week we have stayed clear of that law. That is because the stylists cut will be around $290 of that so we have met our legal requirements. Until we build up our brand/salon it wouldn't be ethical in our opinion to bring on a stylist that couldn't produce at least that little. Not only that but we would have a the budget to do it. That is why we would be recruiting so many at first with enough clients to at least bring in the minimum amount. Essentially they pay for themselves so it is of no great risk to us.

We are also not banking on bringing home a great income for a little bit. I will take some receptionist shifts and that money is already in the budget so I would rather some of it go to our family. Besides that my wife will take the standard cut that every other stylist would take. Then we plan to more or less use savings to get us through. Rice and beans time lol.
 

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