Intro: Do you feel like you were meant to have a kick-ass career as a hair stylist? Like you got into this industry to make big things happen?
Maybe you’re struggling to build a solid base and want some stability. Maybe you know social media is important, but it feels like a waste of time because you aren’t seeing any results. Maybe you’ve already had some amazing success but are craving more. Maybe you’re ready to truly enjoy the freedom and flexibility this industry has to offer.
Cutting and coloring skills will only get you so far, but to build a lifelong career as a wealthy stylist, it takes business skills and a serious marketing strategy. When you’re ready to quit just working in your business and start working on it, join us here where we share real success stories from real stylists.
I’m Britt Seva, social media and marketing strategist just for hair stylists, and this is the Thriving Stylist Podcast.
Britt Seva: What is up and welcome back to the Thriving Stylist Podcast. I’m your host Brit Siva and in a very noisy world and in a place where there are no shortage of ideas of what we can be doing to grow and change and elevate our business as beauty professionals, I wanted to shed some light on the difference between structural impact versus financial impact strategies in our business.
I think so often we think that everything we do will produce more money or that everything that we do should be geared towards how do we make more money, and that is actually a recipe for disaster. This is why you see some stylists skyrocket to the top only to have the empire crumble, because all they had been focused on was more money, more money, more money, which all that does is it puts more pressure on the business.
Unless there is structure to support that changing and growing and bustling business, the empire will fall down. It’s just simply logical, right?
If we were to build a beautiful but very sustainable home, let’s say it was two bedrooms and maybe it was 800 square feet. It was doable. It was beautiful. It was clean, it was solid. It was well built. And then we decided, “You know what we’re going to do? We’re going to add on a second story and we are going to double our square footage. We’re going to do it only in 30 days and we’re not really going to change anything to the frame of the house. We’re just going to keep building up and up and up.”
Then a year later we’re like, “You know what we need is two more bedrooms.” So we try and build up higher. And now you’ve got this three story house, but you haven’t changed anything structurally to the lower levels. It’s all going to come crashing down, right? That’s not going to be structurally sound yet that’s what we do when we layer on these pieces to our business in effort just to make more money without thinking about the structure.
Now, the other thing we do is sometimes we add structural elements thinking it’s going to make us more money when sometimes it actually causes you to lose money. Or sometimes we put structure into place because we see somebody do it. But the person who’s adding that structure is 15 steps ahead of you, right?
This is an industry where it’s not one size fits all. One of the things that I had been talking about really openly, mostly in 2021, end of 2020, into 2021 was the idea that pre-booking is not sustainable. I still believe that. I don’t believe pre-booking is sustainable. I think that it creates an income cap for those who are at a place in their business where they’ve created a lot of scalability.
That being said, the place that I went wrong is I said it as if it was a general rule, like nobody should ever pre-book. No, no, no. If you’re still in the building stages of your business, pre-booking is great because you need to secure as much business as possible.
The challenge with pre-booking is it gives us a false sense of security as if once somebody’s pre-booked with you, it means that they’re like locked for life and they’re never going to move that appointment, which is not true. So we get this false sense of, “Well, this is going to be great. They’re set. I’ve locked in my income.” No, you haven’t. You’ve created a false cap, but that’s a different podcast for another day.
Generally speaking, that can be a really good thing. Pre-booking can be good, but when we make these structural impacts, like pulling back pre-booking, for some of you that should have happened in your business a long time ago. Structural changes have to be done in alignment with where our business is at the moment, not what somebody else is talking about, not what seems like it’s trending. Like what truly makes sense for you, so we’re going to talk about structural impact and financial impact strategies.
Now, another thing I should share—I’m talking about structural and financial impact. Not necessarily growth, because with any of the things I’m about to mention, sometimes we put them into place and they actually have a negative impact unintentionally, and we need to be able to triage that and troubleshoot it, and part of this podcast is bringing that awareness.
I shared an episode not too long ago about a stylist who was given advice from another business coach about how your business is booming, it’s time to make these structural changes. And when she made the structural changes, it had a really negative impact on the demand for her time. That’s an example of doing something that structurally and financially could have had a positive impact. Unfortunately, it wasn’t super positive, right?
And so we need to really look at balancing these structural impact and financial impact strategies to make sure we’re getting our desired result.
So let’s first compare the two and talk about when you might consider making both because both are necessary.
When we create structural changes in our business, the point and purpose of doing that is to create more order and stability. And so structural changes reduce chaos and they allow us to do less better.
Now, when we are in the early infancy starting stages of our business, you need to have order and stability. There’s no doubt about it. You have to have structure, but it doesn’t need to be super rigid because you’re not trying to reduce chaos. There is no chaos yet, right? You’re hoping for the chaos. You’re hoping for that booming business, like bring on the chaos. But when we are at a place where we have a clientele flow and maybe we’re having a harder time fitting guests in, we’re shifting our schedule, you do need more structure, right?
Reduction of the chaos is critical. So we need to have structure at all stages of our business, but how much we need changes over time.
Then when we look at the financial impact whenever we’re looking at financial impact strategies, the objective is always to increase both revenue and future potential. And that’s a piece that I think we forget as well. We are living in an “I want and I want it now” era where once we’ve decided something, we’d like those results to come to fruition yesterday. Like there is—nobody has any patience anymore. It’s really difficult to wait and say, “Okay, if I plant the seeds now in four years, I’ll have everything I want.”
We’re living in this time of instant results and so it can be really hard to think about what could I do that’s going to create that long term financial potential, but I want you to try and keep that in mind.
Now, the other thing is when we do things that increase financial impact or shift financial impact, it almost always increases workload. It will increase clientele and income as well. Sometimes it doesn’t increase clientele. Sometimes it just increases income, but very, very, very rarely do we do things that have a great impact on our finances and our financial future that doesn’t involve more work.
Now more work is not a bad thing and sometimes a shift in the work being done, sometimes you truly are working smarter, not harder. It’s just changing the workload that’s happening. But the idea I’ve heard so many great just interviews and articlesI’ve read about the idea of passive income recently. Basically all of these articles are written in saying this idea of passive income actually poisoned a lot people’s minds because they were trying to say the only income that’s passive is maybe like stocks, something like that. However, that’s really volatile.
So the idea of having consistent passive income, all of these economists were saying like, “you can do all the research” were really struggling to find any sort of business model that creates true passive income. If you want to make more money, it’s going to involve more work. There’s just not great examples of that. I could not find any. If anybody finds some great passive income resources, please pass them along. But it’s challenging. There’s always going to be some work involved if you want any level of business to pay off, right? I’ve seen some people even say like, “Well, if you sell retail online that it’s passive.” No, it’s not.
So you build the webpage or you’re promoting links to your online retail store. Unless you’re promoting it, unless you’re talking about it, it’s not moving or you’re putting money into advertising, right? There has to be some energy and some efforts to actually produce the results.
So when we’re doing the structural impact, it’s creating order and stability, and when we’re doing financial impact, it’s the goal is to increase both revenue and potential revenue. So let’s look at the structural impact strategies.
Number one, defining your brand and target market. That’s something that I believe everybody in the industry should do starting from the time they’re in cosmetology school, knowing that your brand and target market will and should change over time. It’s this evolving thing. It’s not something you get tattooed on your inner arm. This is something that changes, trends are changing. What clients want are changing, you’re hopefully changing as a human and what you like to do and who you like to interact with and who you connect best with will change, always, right?
And I think one of the things is when I talk about brand target market, people say, “Like the services I do?” No, that’s not what brand target market is about.
When I coached to Thrivers Society years ago, I talked about doing something called an avatar or a dream client file. That’s been completely phased out of the program now for some time. And when we look at what it looks like to truly create a brand target market, it’s not just around, like, “my name is Britt and I do root touch ups,” or “my name is Britt and I specialize in haircuts.” The brand target market is much, much deeper than that.
And as we shift and refine that brand and target market, it changes the structural impact of the business, right? The predictability, what we’re known for, how we market, it really changes our structure.
Number two, when we put policies into place or remove policies, that’s going to have a structural impact.
One of the things that I see as being a little bit dangerous right now is we’re seeing kind of overprocessed way of doing business in our industry. First of all, you should know I’m the queen of talking about structure. I love structure. I love guidelines. I think we should really step away from the “kitchen cosmetologist” mindset that really plagued the industry for decades and look at running our business as a super serious business. But I think one of the things that came out of the pandemic is this idea that like everything has to be so processed and a policy for everything and a procedure for everything, and we are slipping a little too far to the right or to the left where we’re forgetting to also be human. I think that we have to remember as service providers, we are humans serving human beings, and there’s a fine line between order and predictability and so much process that it’s becoming intimidating or it’s becoming unsustainable or it’s becoming confusing to our clients, right?
So policies and procedures are important, but just think they’re always going to have a structural impact. And is it the impact that you’re truly looking for?
Number three, pricing structure and not price increases. We’ll talk about price increases later, but pricing structure. So when we say, “I’m not going to charge a la carte anymore, I’m going to switch to block-based,” or “I’m not going to do block-based anymore. I’m going to do session pricing,” or “I’m not going to do session pricing. I’m going to do equitable pricing,” or “I’m not going to do equitable pricing. I’m going to do a la carte pricing,” or “I’m not going to do a la carte pricing, I’m going to do hourly pricing,” right? Those are pricing structure changes.
And the reason I want you to understand that is I think there’s this misconception that if you change the structure, it will have a financial impact. It might almost be like a caveat to the structural change. Like, okay, because you changed your structure, your income could go up a little bit or down a little bit, but it’s generally not going to be a catalyst for this huge financial change.
And if you think about that logically, even why would the way you tie the pricing up in a bow change how much you make, very rarely would that happen. When you look at other companies who have done it across the board, it just doesn’t generally pan out that way.
So what it might do is create simplicity for you or make it easier for you to talk about pricing with your clients or make things a little bit more flexible or a little bit less flexible. Those are structural changes. But generally speaking, that’s not going to be a huge financial windfall one way or another unless it’s really poorly executed.
Then we have scheduling changes. That has again a structural impact. If you expand days, if you cut back days, that’s mostly a change for you. Does it affect your clients? Yes. But changing your schedule doesn’t have to have a financial act on you at all and actually rarely does it.
I was coaching a new stylist recently who was like, “You know, my salon only allows me to take clients five days a week. But I feel like if I worked seven days a week, I’d grow much faster.” And I said, “You know, I fully disagree.” I said, “Are you fully booked at five days a week?” “No, I’m struggling.” Okay. Well then if you’re struggling to fill five, why would adding to make things better? You’re going to be sitting around a whole lot more spinning your wheels and spending your time wondering why nobody’s coming in to see you. It’s generally speaking really terrible for your mindset.
So just opening more opportunity doesn’t innately bring you any more business or money. Also, the idea that if you shift your schedule back, if I don’t work evenings, my clientele’s going to leave me. If I don’t work Wednesdays, my clientele’s going to leave me. Well, then your clients didn’t really love you. Then they loved your Wednesdays, but they didn’t love you. There was a break in the service.
And so often when we are so scared of our clients, which is truly what’s happening in those moments, when you’re so scared of your clients, that’s a real clear sign that they’re not loyal, right?
When we look to the retention funnel that I coach to in Thrivers Society, loyalty is pretty low down on the retention funnel. So if you are scared that if you aren’t available on evenings any more your whole business is going to fall apart, that is an indication that you have a massive structural break. Your clients are stuck somewhere in trust or nurture, and you’re not getting them to the point where you’re worth it.
So when we change our schedule, it shouldn’t have a financial impact. It should be improving our lifestyle in one way or another.
Another structural impact piece would be developing a method. That’s something we talk about in the Scaling Stylist Method. I would not bother developing a method unless you are already taking home a hundred grand or more in services as a beauty professional or a salon owner. It’s too complex and sophisticated. But once you get to that place, it increases predictability for your clientele. It makes marketing a whole heck of a lot easier, and it makes your income more predictable for you too, in all the right ways. So develop a method is a structural change. That can be really good, but again, it’s very sophisticated.
Then we have improved guest experience. Again, structural impact. So I talk about this a lot as well as I think there’s this idea that if we add more amenities, if we get better throw pillows, that we’re going to make a lot more money. No, I think that it can have some good structural impact though. It’s great for our marketability. It can be good for referrals. And it certainly improves guest experience satisfaction, but that won’t innately increase income.
You know what else it won’t do is it won’t innately help salon owners to retain stylists. I talk to so many salon owners who are like, “I offer all the amenities. I provide beer and wine. We have chips. We have a laundry service. We bring in educators. What am I missing?” Well, the writing’s on the wall there. If you have offered everything to the moon and back, and you’re still not sustaining people, that structural piece isn’t the hook for anybody.
It’s not the hook for your clients. It’s not the hook for your staff, right? So it’s good. It’s certainly improves things, but it’s not the windfall.
Then we have, last but not least, shifting retail and product lines. For those who say that, that retail is dead. I got news for you. It’s not dead. You just need a new structure and strategy. The beauty industry retail subsect is massive. It’s exploding. It’s growing at a really rapid rate.
Then we can say things like, “You know, clients prefer to buy things online.” No, they don’t. They’re just irritated that there’s not a great experience in the salon, so why bother? Like it’s the same experience buying online that it is buying from you, so why not just have it shipped for free? Like they’re just going to go with what seems most effective. And if buying from you is not anything great, then sure. They’ll just order online. Who cares?
But if buying from you is a true experience, they’re going to prefer that every single time, right?
It’s the idea of like why for my daughter’s birthday do we every single year go out to her favorite steakhouse when I am completely competent to fry up a filet mignon for her on my stove at home? I can do that 365 days a year, but that’s what the girl wants on her birthday. So why do we go to the fancy steakhouse instead? Because it’s worth it because of the experience that comes along with it, right?
And so when you think about “what is the retail service experience I’m providing,” if you’re just selling filet mignons, then yeah, nobody’s buying. But when you think about everything else, that could be a part of it. That’s where you’re going to get that structural win, right?
But if you have a line that isn’t in alignment—this goes back to target market and brand. If you’re selling a line that isn’t in alignment with your target market and brand, definitely that needs to be a structural change. Okay. That’s all structural.
Let’s go into financial impact. The first is going to be hiring and the reason I put that under financial impact and not structure is because generally speaking, the reason we hire is to ideally produce more income. Now that does have an effect on our business structure, for sure. And you can see there’s a lot of interwoven pieces between these two, but hiring can have either a positive or a negative impact on our business.
There’s this misconception that to make more money, you hire an assistant. An assistant, let’s be honest, is an expensive endeavor at minimum. If you’re paying your assistant minimum wage, you’re looking to pay another what, at least at minimum, minimum, no matter what state you’re in, 15, 20, 25, $30,000 a year for that person. That’s a massive financial commitment you’re taking on.
So what I always say is if you’re bringing on an assistant, there better be a plan for them to pay for themselves and that doesn’t have to mean double booking, but that has to be a landslide victory to you, that you’re going to come out ahead in that.
Now, maybe for you, you’re like, “You know, the reason I’m hiring an assistant is not necessarily to have that landslide financial victory. I want to build a salon team.” Great. So then you’re thinking about that long term financial potential, right? You’re building a team. I’m good for that. I could see it. I get it. I still think that assistants could pay for themselves, but I see you and I can roll with it, right?
So when we are bringing on an assistant, we just have to ask ourselves like, what is the point and purpose of this? And is it going to pay off and beyond the assistant thing? I got stuck there for a second. Whenever you’re hiring stylists, we think the same way, like what is the point and purpose of this and what is the financial impact going to be on the business?
Price increases. Price increases do have a finance impact. Generally speaking, it’s just incremental. So when we think about “I’m doing a price increase and I’m charging an additional 10% for all of my services,” well that will increase your income by 10% a year generally speaking, like doing rough math.
So when you’re increasing your income by 10% a year, it’s just not enough to stay ahead of the economy, so you would need to be increasing your prices by more like 15%, 20%, 25%, 30% in order for that to be a bump significant enough for you to be really growing with the pace that things are growing right now.
And the challenge is most clienteles can’t sustain a 30% price increase. It’s just too hefty. So that’s why I’m saying price increases are good. Keeping them incremental is good. It certainly moves the needle. It’s just not enough, right?
Then we have improved marketing strategy. Marketing is the lifeblood of your business. It is so funny to me when people complain about, oh, social media is too much work. Oh, Yelp is too much work. Oh my website’s too much work. It is making more money, too much to work. Like help me help you. Like help me understand, help me understand our relationship with marketing because marketing is the money maker. Like when I think about my business, I’m like, where’s my marketing at cuz that’s the life. That’s the lifeline. That’s where all the money is coming in from. So it’s that balance of like nurturing our existing clientele for sure, because it’s six times cheaper and easier to retain an existing than to find somebody new.
But that marketing, man, that marketing strategy has huge potential in the financial impact. So when we’re looking to change the way we show up externally in our business, when we’re looking to change our referral program, change our social presence, change our website that has massive financial impact and I want you to make sure you’re categorizing it that way, then scaling your existing offering.
So when we look at like, instead of adding on a new service to your menu, which I’m going to talk about in a second, going deeper on what you already have. So I think often, especially right now, we’re in this place and space where everybody wants to start extensions. I love extensions. I’m an extension gal myself. I think they’re great. Do I think everybody needs to do them? No.
What happens when you invest in extensions is that word “invest” is for real. You’re investing in the product. You’re investing your time. You’re investing your effort. You’re investing education. The investment is massive and the payoff is not guaranteed to be there. Some markets can sustain extension. Some markets can’t. Some stylists have a knack for it. Some don’t, just like some stylists have a knack for bridal and some don’t. It’s the same thing. You can’t just go to one extension class and have it be a landslide victory. It doesn’t work like that.
So when we look at maybe, just maybe, instead of taking on a new service, getting better with what we’ve got and diving deeper into scaling our existing offer, the potential’s massive.
So another thing you could do, if you are an extension specialist, and like I said, I don’t think extensions are bad, but going deeper with extensions, instead of saying like, “I’ve mastered extensions. Now I’m going to try a new blonding technique,” like, why don’t we just like master one thing? Like, why don’t we get really incredibly good at the one thing.
That is becoming masterful is actually a much faster and easier way to build and scale a business than trying to do a thousand things well, right?
So diving deeper into your existing offers is great for financial impact referral program strategies. We touched on really briefly and then I want to get to retail sales really quickly.
So selling retail is a huge financial lever opportunity in your business. Huge. And for those of you who say like, well, “I’m commissioned, I don’t make retail sales,” I would have a conversation with your owner about that. I don’t think owners are being mean or bad when they don’t offer retail commissions. I think the reason they do it is they are not set up for retail success themselves. I think they’re likely running with a keystone markup, which doesn’t allow for commissions. And so that’s a huge part of it. They themselves are running in the red on it. So they just don’t have any money to pay you with, even though you’re selling a $20 bottle of shampoo, there’s literally no profit on that for many salons because they’re not set up for success with it. So they’re like we can’t afford to pay you a commission. Would love to, it’s not there.
So generally there’s a structural break there, which goes back to our structural impact strategies, right? So that’s part of a bigger conversation. But when we look at retail, it’s not just selling the bottle of shampoo. Retail equals retention. It equals referrals. It builds trust. It does so many powerful things.
So when we say, how do I have a financial impact retail treatment sales, all of these things are a part of it as well.
So I hope this podcast has been of benefit to you. The point and purpose of this one was to just really think about what changes you’re looking to make in your business and the impact they may have. So many of us get hyper fixated on super things from anything from time to time, like I need to take a new class on haircutting. I really need to change my Instagram structure. I need a new cancellation policy. What about texting my clients? Like we think about all of the possible things that we could change in our business instead of looking at the buffet. Really ask yourself, “What do I need my business right now? Do I need to increase revenue and potential? Or do I need order and stability?” And then choosing from the a la carte menu I presented right here.
So as I always like to say so much love, happy business building, and I’ll see you on the next one.
