by Celeste Trapp, originally published here
Owning any business is not an easy job, certainly not a guarantee for profitability, or even staying in business. If you own a salon or even if you want to own a salon, take note of these five mistakes commonly made that could affect your profitability and success: 1) Weak Foundation or policies; 2) Ineffective or non-existent Marketing; 3) Failure to Coach Performance; 4) No Systems; and 5) Under Utilization of Technology. (These mistakes are based on being a commission based salon). The first mistake will be covered in this issue of The Stylist and the remaining mistakes in future issues.
BIGGEST MISTAKE ONE: A WEAK FOUNDATION
Policies and procedures not clearly communicated — Does your staff know exactly what is expected of them? Employees of any company should have clear communication with their employer’s policies. If you don’t have solid policies, now is the time to decide on them and put them in black and white in an Employee Handbook.
Policies around attendance, chores, and dress code, for example, are a necessity to hold your employees to the standards you want for your salon. Without having these policies in writing you are basically saying “Do as you want,” which is recipe for a poorly operating team, as well as a team that is nearly impossible to manage.
Once you have your policies in place, have your team sign off that they have read them, and then you have to enforce them. Yes, you have to make sure your staff follows the policies consistently. You may have a policy that states an employee will receive a verbal warning for an infraction (it’s a good idea to give a laundry list of possible infractions) and then receive a formal write-up if the behavior happens again.
But then what? What happens if they receive a write-up? You probably do not want to fire them unless the write-up is for something worthy of termination. So you might think about a bonus program that would be void for a certain time, then upon receiving a bonus or a work detail blocked off on their books to assure that team members do not want to receive a write-up. The ultimate goal here is that your team knows what is expected of them and knows there is a consequence if they fail to meet those expectations. A common best practice for parenting — more on that later.
Get a non-solicitation agreement. As a commission salon you should be helping build a clientele for your staff. There is an investment on the salons part to do so and you should protect your investment with a non-solicitation agreement. If your staff chooses to go elsewhere this agreement states they are not able to solicit your clients.
You can’t restrict them from practicing their trade, but you can stop them from calling your clients and inviting them to their new salon. This means you must be able to decipher which clients are your clients and which clients are the employee’s clients. Having salon software to track how a client was referred is imperative such as New Client and New Client Request.
A New Client Request means the client requested the stylist. A New Client means the salon attracted a new client (making it the salon’s client) and they were placed with the stylist. Although a commission salon should be helping fill a technician’s books, they should always be reminding their team it is not just the salons responsibility.
Technicians need to be coached on how to grow their business through referrals, social media and self promotion. (such as they should always be carrying their business card). Have a non-solicitation agreement that clearly states any guests the technician brings to the salon directly or through referrals are legally allowed for them to take with them if they were to ever leave. So basically as a business owner you are saying we will invest in you and help fill your books and we encourage you to market yourself and build your own clientele that you can take with you.
Now as a hard working business owner you may say, why would I encourage any team members to leave and take clients? What I have found in the past 15 years is nearly all applicants have some desire to work for themselves. The industry attracts people who want some form of independence; perhaps it goes hand in hand with being creative. Instead of fight it or fear this fact, my approach has been to recognize and support it.
I have even gone as far as offering a Salon Ownership Mentorship program to employees. This two year course (quarterly classes) teaches wannabe salon owners what it takes to open and operate a successful salon. It is eye opening as you can imagine. Many of my employees who are in the program may take what they learn and eventually leave my company and I will feel good I helped them be successful. However the rest of the group (of mostly long term employees) now have a better understanding of what it takes to start and run a business and have more appreciation for their positions within a company like ours and hopefully will remain as leaders (who now have a better understanding of business) in our salon family.
I strongly suggest you have an attorney review your Employee Handbook and Non Solicitation Agreement and make sure you have policies that are legal and that you have not missed legally critical policies like compensation for working overtime, family leave act, drug and alcohol policy etc. Your attorney should also look at threats to your business like wage claim suits, class action lawsuits and other claims that might be made against your business.
Having clearly thought out policies and procedures designed to protect you from legal nightmares will help you not only sleep at night but also help assure the longevity of your business.