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 Britt Seva, and today we’re going to talk about that money, which is always so fun. These episodes always end up being such a blast.
I decided to center this week around money myths and lies. One of my pet peeves is when I see a lot of misinformation floating around the industry, it really grinds my gears because what I think a lot of people see—actually just as humans, this is like a human psychology thing is we love to see things that back up our existing beliefs. So if I believe the sky is pink all the time, like I’m in California, we have these beautiful pink sunsets. I’m obsessed. But if I want to think like the sky is pink, it’s never blue and if I find 10 other people who also agree with me, I’m like, “See, nobody listens to us, but it’s pink.”
We love it when other people back up our beliefs. Now that’s kind of a silly example, but a common example is most of the world thinks small, dreams small, plays small, doesn’t live up to their fullest potential, or likes to make excuses for not having to do the things that scare them or push them outside a comfort zone, and so they actually seek out things that affirm their beliefs.
So when people say you shouldn’t sell retail in the salon, retail can be done other ways to make more money. Every time you see somebody else saying that, you’re like, “Yeah, see, I knew it.” For me as a business coach. I just cannot understand that, like I know too many people making so much money selling retail. I always go back to like, “Do you want to put on the bandaid or do you want to get to the root of the issue?”
And I think so often in life and in business, we focus on the bandaids. We like to focus on the bumps and the scrapes and the bruises. Meanwhile, a piece of our lower leg’s been chopped off and no one wants to talk about it. And so when people are like, “Well, retail in the industry is dead,” honey, if retail in the industry is dead, why do I know thousands of people making tens of thousands of dollars, some hundreds of thousands of dollars, selling retail in their salon still? Retail’s not dead. The problem with retail is the same plague that poisons our entire industry. The problem is actually that people have not evolved their way of selling it. People are still trying to sell retail like they did in 1987, like the way my grandma would’ve tried to sell retail. It’s legit.
That’s the actual issue is that people are complacent and people think what worked 15 years ago should work now, even though we don’t live a life anything like we did 15 years ago, even though consumer behavior has completely changed. And then we say things like, “Well, retail can’t be sold because of online retailers.” Really? So you never leave your house? Literally everything you buy is just online. Everything. I mean, everything. Don’t tell me like, “Well, a lot of what I do—” No, I literally mean everything. You never go out and spend a dollar in person. Well, no, of course not. Of course not. Sales still happen in person all the time. The people who have understood what it looks like to sell in salon are making all the money with it. The people who are not and who are saying “Well, Ulta’s winning, Sephora’s winning. Amazon’s winning, manufacturers selling direct to consumer are winning.” They are just because they’re better at it than you. So get better.
Do you really think your clients would rather buy from a major corporation than from you? That truly, in your heart, your clients hate you. They’re like, “Oh my gosh, you’re the worst.” They don’t want to support your business. Do you really think that’s what it is? Or do you think that your clients have convinced themselves it’s just better to buy from Amazon? It’s just better to buy directly from the consumer? Make it so that’s not true and then you will win.
But instead we get so fixated on—and we love it when somebody affirms our belief of retail is hard. Retail is stupid. Retail can’t be sold in the salon. Awesome. I’ve been struggling with retail. So a hundred people tell me it’s bad. That makes me feel better about myself. That’s literally how all of us work. That is one extreme example.
This is not a retail-based podcast. I went off on a bit of a tangent there, but the reason I wanted to talk about the myths and the lies is because so often we just love those super magnetic concepts that float around that convince us that us playing small is actually correct and it’s not.
So I want to focus on the myths and the lies and then break down the truth.
The first we’re talking about money here today. Money is evil and wealthy stylists are bad.
It’s funny. You’ll talk to a lot of successful stylists and they’ll say, “Everybody loved me when I struggled and then when I started making some money, I got haters.” Happens every single time and it’s always why I say when you get your first hater, congratulations, you’re finally a big enough deal where people want to have opposition.
You talk to anybody successful and they’ll tell you they’ve got haters. Like if you don’t have haters, it just means you haven’t reached that level of success yet. Legit. That’s what it’s all about. And it’s because still to this day, even though we all got into this industry to make money, if you did not get into this industry to make money, then you should just call out your hobby and take up another job. Like legit, you became a stylist because you thought you could make good money. You became a barber because you thought you could support your family with it. Like we all did. So when we then turn around and say, “Money is evil and wealthy stylists are bad,” didn’t you show up here to make money? This is your business. This is your career. It’s not bad. But when you put that energy out there, you’re not going to make a whole lot of it because you’re projecting that it’s evil and it’s bad, and the other thing is, it’s just not true.
Money has been completely villainized in our industry and I can’t tell you why, but I’m working to help to resolve it. I think a lot of it comes from jealousy. I think a lot of it comes from misunderstanding. There’s no doubt.
88% of our industry is still not making the money that they should be statistically. Like you can look that up, look up the Bureau of Labor and Statistics, look up the fact that the average income in our industry is still 28 grand a year. Look up the fact that only 12% breaks six figures. Look it up, go ahead.
It does not have to be that way. We are playing small. And the reason is because there’s this venomous cycle of beauty professionals convincing each other that retail sucks, that business coaches are stupid, that social media is a waste of time. Convincing of these lies that keep everyone around them playing small so that they don’t have to overcome their own fears.
That’s what it comes down to. Affluence equals influence. You want to make an impact. You want to change the way things shake out. You want to change the way your family lives. Affluence is the way that happens. Making more money, you can villainize it if you want to, but the reason why it is so magnetic and the reason why it has so much power is because affluence does equal influence. Money simply creates more opportunity. It doesn’t make anybody happier. It doesn’t make anybody better. It’s why you see a lot of rich miserable people. It just amplifies what’s already there. So if you’re a good person with good values, money is only going to make that deeper for you and richer for you. It doesn’t have to be evil. It’s all about what you do with it, right? The idea that money is evil and wealthy stylists are bad is what is keeping our industry in a state of struggle.
Our industry is categorized as the second least profitable in every industry in the country. Every single one. Think of all the industries, ours is the second least profitable. Do you think that’s because people don’t want to get their hair done? Do you think that’s because people don’t like hair color? They don’t like texture services? They don’t like extensions? They just don’t like it? We’re trying to sell something people don’t like? Do you think that’s really what it is? Or is the problem possibly us? Think about it. Dentists, doctors, lawyers, they don’t have this issue. We got it. You got to ask yourself why.
Second lie: cost of goods is screwing us. If I see one more beauty professional post about cost of goods on their feed, I might throw my laptop against the wall. It’s happened before, it could happen again. It infuriates me. Cost of goods is not screwing us. Inflation is what’s making you angry.
And then for those of you who are like, “Well yeah, yeah, it’s all a part of it.” No, no. That’s the entire thing. You’re looking at cost of goods and you’re like, “I don’t understand. It’s just cost of goods that’s gone up.” No, everything has gone up.
We’re living in inflation. The reason you’re so hyper fixated on cost of goods is because it’s what’s screaming at you. It’s what’s in your face every day. When you’re paying twice as much for an apple as you paid a year ago, you’re just paying it because you’re like, “Well, you know, last year it was a dollar. Now it’s a $1.79, but I like apples and 79 cents doesn’t seem that bad.” But when you’re paying an extra 79 cents per tube of hair color, we’re crying about it. It’s inflation. It’s not cost of goods, right?
So my pet peeve about this—I’m not saying, “…so just roll with it. It’s no problem.” No, it’s a huge problem. But we’re focused—again, like I talked about at the beginning, you’re fixated on the wrong thing. The cost of goods is not the problem. The inflation is the issue. And what I don’t want you to do is raise your prices and then go around telling your clients “Due to cost of goods increase I’ve got to raise my prices.”
You know why? Because there’s a potential deflation that’s going to happen on the flip side of this. Do you know for the first time in my lifetime, I’m watching economists actually use the word depression, which The Great Depression was a hundred years ago and never ever have I seen economists start saying, “Listen, it’s on the table,” until now.
If you build your price increases around the idea that it’s only because cost of goods has gone up, you should expect your clients to come knocking on your door in a year and say, “Well, cost of goods has come down. Are you going to reduce your prices?”, because my answer is your business coach is heck no, because you’re not raising your prices due to cost of goods. You shouldn’t be, never.
And when I say that, some of you were like, “Well then how do we cover the cost?” Formulate. You use the dynamic pricing model. It’s not that it’s not baked in. It’s not that you don’t cover that. That is not the reason, and it’s not what we explained to our clients because now on the converse, when cost of goods go down, they’re going to say, “So are you doing a price cut?” The stylists who did that and the salons who did that are going to be in a position of negotiation and bargaining with our clients when the recession hits in the next year, which 90% of economists at this point are saying are going to happen.
When I recording my podcast on the recession a few months back, only about 30% of economists were. Now it’s 90%. You can Google that yourself if you’d like to.
So when you’ve baked your pricing into the idea of it’s all because of inflation, it’s all because of cost of goods, you’re going to be in a heap of trouble. That’s why we don’t ever publicly announce to our clients why we do things like that, because then it’s going to come back and bite you in the butt when things turn, right?
Really shifting gears, next lie, salon owners shouldn’t make money off their stylists. What? First of all, the mindset is wrong. The mindset, when I say things like—and I hear this all the time—”My owner’s making a lots of money off of me,” that’s a huge sign that you don’t feel like your owner is a leader. You feel like they’re literally a boss or maybe you don’t even trust them. I don’t know. But like that’s some deep ish when we start saying stuff like that.
Salon owners should make a profit. Business owners should make money. Why would you ever open a business hoping to create debt? You’re working for somebody you believe should not make money. Do you despise them? You just don’t like them. You can’t stand them. Why are you working for them? That doesn’t even make sense to me.
And two, salon owners shouldn’t be making good money if they’re not leading. They shouldn’t. To be a great business owner and to turn a good profit, it takes a lot of work and you really do have to know what you’re doing, but no owner is going to be able to keep their doors open if they’re not turning a profit. If an owner has been running their salon for 10 years and is still not turning profit, friend, you might just do better as a booth renter, honestly, because I think the ownership game is just not for you, right? It’s just a different game.
Owning a business and, and running a chair, two totally different games. Both are beautiful. Both can be really successful and not the same thing at all. So really think about what is the game you want to play.
But salon owners should be making money and stylists who work for the owners shouldn’t be saying things like “The owner shouldn’t make money off of me”. It is a business. My employees don’t say things like “Britt shouldn’t make money off of us”. It doesn’t look like that. It doesn’t feel like that. It’s not what we’re doing. So really think about the mindset there.
Next, stylists make more money when they booth rent or work in suites. This is a real big lie and it’s not to say—and some of you are like, “No, I left a commission salon and now I’m a suite owner and now I make more money.” Good for you. You’re part of the 12% that that’s your story. Congrats. I’m super stoked on you. Super happy for you.
The thing I want to uncover is I believed this lie when I was in cosmetology school. I thought the way to make money was to booth rent, like you could not make good money as an employee. I know so many employee stylists who walked away from being an employee and took an immediate 30% pay cut because they didn’t realize how expensive it was to run a suite, how expensive it was to run a booth. They didn’t realize they were paying 7.5% more in taxes immediately. All they think of is like, “Well, all the tax write-offs.” Yeah, but your tax rate just increased. So yeah, you get the write-offs, but you’re going up in all of the other ways and write-offs, I don’t think write-offs work in the way that people think that they do.
I used to think this when I was 18—my daughter probably thinks this, when you’re like, “Oh, I bought a cup of coffee. The coffee was $4. $4 write-off.” You think of it as $4 of free money. No, no. All the write-off does is it works down your tax bracket. So if you have enough of them, yes, it can make a significant difference. But it’s just the tax on it, that’s really becoming the write-off. So we think of like, “Oh, $20,000 in write-offs, I saved $20,000,” no, that’s not how that works. And so we oversimplified the economics of being independent and we think it’s going to be a landslide victory and it’s not. This is a time where cost of goods is really high.
If you’re a commission stylist, I don’t know that I’d make a jump right now. If your salon’s doing well, like they’re covering that for you and so really thinking about is that always the move? Not always. The reality is stylists make more money when they attract and or retain clients. It’s as simple as that. You can be a commission stylist. You can be a booth rental stylist. You can be paid in Doritos potato chips, it doesn’t matter. You will earn more if you’re retaining and attracting, that’s it. It’s super duper simple. How you get compensated has very little to do with it truly. It does.
When we were a blended salon, but we had commission stylists who had been commissioned for almost 20 years, and the reason was because they were attracting and retaining so high that they were making so much money in commissions that if they went independent, they’d have to work so hard to sustain it. They were like, “The money’s great. Why am I going anywhere?” It just became so easy to stay.
They increased their money because of the demand, not because their commission split even went up, the demand was just there, and so it made sense.
Second-to-last lie, don’t claim your cash. It’s so ironic because we’re in this industry who’s like, “We want more respect. We want to charge our worth. Pay us for our time. We are valuable. We are essential.” The amount of people who in 2020, myself included, were like, “Uh, beauty professionals are essential.” We were so essential coming out of 2020. We’re essential now. But then we want to run in the underground. We’re like, “but don’t claim your cash,” “but don’t run a legitimate business”.
What? So you’re asking to be respected. You’re asking to make more money. And then you also are like, “but I’m going to run my business illegally,” because that’s what it is.
Listen, I love cash as much as the next guy. When I was 13 years old, I babysat all the little chickadees in my neighborhood and I made a ton of cash and it was amazing, right? Love cash. Cash is king. I get it. But if you ever want to get a PPP loan, if you ever want to buy a car, if you ever want to buy a house, if you ever want to get a business loan, you can’t go in and say, “Oh, and I also make $18,000 cash.” They’ll be like, “We don’t want to touch this application because that’s fraud.”
You can’t just not claim your cash. It’s actually illegal. So you’re shooting yourself in the foot and people say, “Well, I don’t want to pay more in taxes.” The first time I had a six-figure tax bill at the end of the year, I was so upset. I have a CFO who works as part of my business. Like not CPA. I have a CPA. I have a CPA, a bookkeeper, a CFO, and a financial advisor. I got a lot of financial people I’ve got working for me because I want to be smart with my money. I don’t want to just make the money. I want to be smart with it, right? And I was so upset, like in mourning for a couple days, because I was like, “Man, I feel like I’m working so hard just to give it all away.” And he was like, “I’ll let you be upset, but I don’t ever want to have this conversation with you again.” He was like, “The fact that you are so blessed that you get to give away a hundred thousand dollars, do you know the impact you’re having in the fact that you’re able to do that? That you have a business that is so successful?” He’s like, “You kept yours. You’re doing all right. Your family’s okay. Are you stressed? Are you living in debt? No, you’re not. Okay. Well then don’t complain about the taxes.”
People who pay more in taxes are making more money so we can complain about the tax rates, right? We can do that. We can move to Puerto Rico where the tax rate is next to nothing. There’s a lot of things we can do. We can move to states where the tax rate is low. I’m in California here and New York, we get taxed like crazy. I could move somewhere else if I wanted to, but I like my lifestyle and paying my California taxes allows me to live in a home that I like and I’m willing to work really hard to do it. And so when we do things like we don’t claim our cash, you’re ultimately cheating yourself and your growth.
I know it’s really tempting, but if you want to be seen as a legitimate business owner, you got to run a legitimate business.
Lastly, there is a glass ceiling on what you can charge for your area. Few people in the last few weeks have come to me and said, “Britt, I know I should raise my prices, but I’m already the highest in my area.” Okay, you’re the highest in your area. Why do you think you should raise your prices? “Because I’m seeing 27 new guest requests a month.” It is like nails on a chalkboard for me. So 30 new people a month want to come in to see you. You’re already the highest in your area. People know you’re the highest in the area, and 30 new people a month are signing up and you’re telling me you can’t raise your prices. That’s that fear mindset.
That goes back to rule number one where we think wealth is bad, money is bad. People are begging to see you. Perception is the reality, right? Value is what they get, price is what they pay. Your value is so high. You’ve done the work, earn it. There’s a reason why when you look at—I try to compare our industry to others because I think it helps things to make sense. There are some doctors, like all doctors go through a really similar experience, right? Med school residency, they check a lot of the same boxes and then you get into a specialty and you decide to be a dermatologist. You decide to be a surgeon or whatever, and there’s other facets, I totally get that, but let’s even just talk about surgeons. There’s some surgeons who make like 180 grand a year. There’s some surgeons who make more like 2.5 million a year. There’s some surgeons who make more like 25 million a year. What’s the difference between the one making 180,000 and the one making 25 million? Truly, what’s the difference?
Some of you were saying skills. Some of you were saying education. No and no. Perceived value.
Any of you watched the show or listening to the podcast called Doctor Death. I’m going to take a little turn here for the podcast nerds. It’s about a physician who potentially scammed his way through medical school, like we don’t even fully know the story, but made a ton of money, a ton of money doing faulty surgeries. Arguably helped no one, arguably helped not a single person he did surgery on and people were lined up to see this man. Why? Because his perceived value was really high, which should scare you. If I’m saying that, you don’t know the story, yeah, it’s scary.
That’s why the story came out because it’s like we can’t just look at perceived value when it comes to our medical and our health and stuff like that because we can be very easily misled. But when you look at plastic surgeons who are famous on social media, they get a bunch of people lined up outside the door for them. That doesn’t mean they’re the best person for the job at all. All it means is they’re perceived value’s high. They know how to market themselves.
So when you say to yourself, “I’m the highest in my area. I can’t possibly charge more,” no, you have to charge more. Your perceived value is high. Are you ripping people off? Are you a terrible stylist but you’ve made it look like you’re good? No, you are actually good, right? So the idea that there’s a glass ceiling on what you can charge is not true.
The reason why people are nervous is because for the first time in like a hundred years in this profession, we are actually starting to make what our time is valued at. For the first time ever, we’re seeing a lot of stylists break through the a hundred thousand dollar barrier. We’re seeing a lot of stylists start to build real legitimate businesses, and it scares us because for decades before nobody was modeling. It.
Y’all are pioneers. You’re game changers. Own it. There is no glass ceiling. Get yours.
Y’all so much love, happy business building, and I’ll see you on the next one.
