Thoughts On The Future Of Salon Ownership
We were too! The announcement arrived on December 21 and the salon closed that day. Did this whole scenario send shock waves throughout the professional community? The answer is, in many cases, yes.
MODERN reached out to a select handful of salon owners, representing various segments of the industry, to serve as a panel and get their take on the fact that such a high profile salon closed so abruptly, but also on the way it happened.
AE: Arik Efros, co-owner (with Eva Scrivo) of the Eva Scrivo Salons and Academy, is directly impacted by the closing as the Eva Scrivo flagship salon is practically across the street from the (now closed) Ted Gibson Salon. (It was Efros that actually suggested we do a follow up to our original story.) Ironically, Gibson and Backe are now working out of the Eva Scrivo Upper East Side location.
CP: Coral Pleas is the CEO and Founder of the Cutting Loose Salons – a group of 3 salons (80 employees) and an academy that have won multiple awards and was recently named as a Top 200 Salon from SALON TODAY.
FR: Frank Rizzieri is a salon owner (NJ, NY and Orlando, Florida) and owns the Rizzieri Aveda School of Cosmetology and Massage, managing more than 200 employees. With 3 decades of industry experience, the co-creator of R Session Pro Tools is a regular at NYFW, and has worked with countless celebrities and magazines.
LL: Larisa Love, artist, mentor, hairdresser, brand ambassador and owner of the Larisa Love Salon in studio city, CA., 27-year-old Love has a unique vision as a millennial, former booth renter and now salon owner. Love shot to fame by utilizing social media.
Efros, Pleas, Rizzieri and Love were asked to respond to four questions. Here are the questions and their answers:
WHAT DOES THIS MEAN TO THE SALON INDUSTRY? IS THIS GOOD, BAD OR WHAT?
AE: First, I would like to congratulate Ted and Jason on making this very difficult and courageous decision. There are many salon owners who wish that they could do the same, but feel trapped because of everything that they’ve invested into their businesses, financially and personally, and all the sacrifices that have been made, as well as the perception of failure when your name is on the door. I’m sure that as good as they feel about their decision now, coming to it was a devastating process. This wasn’t the typical business closing where a lease had ended or the owners could no longer pay their bills, they simply accepted that they did not want it anymore and had the courage to follow through.
I think that it’s good for our industry that due to Ted and Jason’s honesty in their public statements, they have expressed and brought to light what so many salon owners feel and the constant challenges they face. It may also help to liberate some to follow in their footsteps, if doing so would improve their own lives – “if a big-name NYC salon can do it, then why not me?” Perhaps it will even help to make some hairstylists appreciate that owning a salon is extremely difficult and often ungratifying, to have greater respect for what their bosses go through to provide a place for them to make a living and express their creativity, and to be more supportive, rather than antagonistic, toward the business that nurtures them.
That being said, this is not the first big name New York salon to close in recent years, but the reason they closed is a story that has played out over and over again across salons and has plagued this industry for as long as it’s been around – stylists absconding with salon clientele and the disenchantment with employees and the salon business that owners feel as a result. While the act of using company resources, which often includes years of training and mentoring, to form a close personal relationship with clients and then taking them to a competitor (or to open one’s own competing business) is not uncommon in other industries, nowhere is it as prevalent as in the salon industry – to the point where it is actually considered by many to be an acceptable and standard practice. Until our industry makes a concerted effort to curb this insidious conduct, we will all be its victims – owners and stylists.
CP: I believe we will see more of this happening in our industry. I do not judge, as I do not think there is just one way to run a salon. I was in Washington D.C. this year with some school owners lobbing against Gainful Employment. It is more than just social media and millennials that are changing our industry, it is new laws and regulations, as well.
FR: My first reaction is that my heart goes out the Ted and Jason and their staff. To close your salon and have co-workers lose their jobs and your business, especially before the holidays, is sad for the industry. Every salon that closes sets us back. It affects our product manufacturers, distributors and the entire salon support system.
That said, I always believe that in business, where there is crisis, there is also an opportunity. A salon that closes might be bought by one of the employees or a new salon concept can evolve. Many of us started our dream of being a salon owner because we were able to acquire an existing salon. This can be a win/win for everybody.
LL: This means that times are changing!! It means that the artist behind the chair does not have to work behind a known name to become successful and known themselves. It means social media is taking the artist by storm and giving the platform that we all have desired. This does not mean that all salons will be closing down, it simply means we need to change within and create a community within the salon.
WHAT DOES THIS MEAN TO THE SALON OWNER?
AE: In our experience, the best way for salon owners to protect their businesses and the clientele they work so hard to obtain, is by having true mutual commitments with their stylists, which means non-compete and non-solicitation agreement. It enables owners to operate their businesses with integrity and without fear of their staff, and to invest in the careers of their stylists without the reservations that come from distrust, which is also good for the stylists. It helps to keep everyone honest, or at least more honest than they otherwise would be. But owners should be prepared to do their part as well – your employees are not going to blindly sign legal agreements if they don’t feel they’ll be getting something of value in return, including education and other investments into their careers, as well as an environment where people feel that they can thrive. And obviously this will not work if hiring a stylist with an existing (legal) following.
Ever since we began implementing such agreements with our stylists some years ago, it has completely changed our business approach and has made us feel good, rather than apprehensive, about pouring our company resources, including years of training and mentoring, into making them successful. While this approach may not be full-proof, without it salon owners are always at the mercy of their staffs, with little recourse in case of the next walkout and theft of clientele. Meanwhile, the salon owners who encourage this behavior with a business model that is based on poaching busy stylists, rather than building their own from within, should remember that it’s often a zero-sum game. You may benefit in the short run but eventually it will happen to you, and when it does, it will most likely be twice as bad. (I would also like to add that as far as I’m aware, the Ted Gibson business model was primarily based on training and building from within).
CP: I do believe we, the salon owners, need to stay educated on our industry. I realize that there are changes happening. I do not believe there is just one way of running a salon, all I know is that I believe in commission based salons. I believe in recruiting, hiring and training our own. We currently have 18 protégé training to join the other 45 stylists at Cutting Loose Salon. They are our largest investment as we train 8 hours each Monday with theory and hands on to prepare them. I find it to be my best ROI as that is how we have grown to a team of over 75 since inception in January 2008. When I opened Cutting Loose I was a single mother to two millennial children that were also in the industry. I know that helped guide me as I knew I wanted to be different. I took into consideration that this generation wants work / life balance. I have learned from them and now try to obtain more of that balance for myself. We are proud of creating a 3 day salon owners visit to our salon through The Pleas Formula, where my passion is now is helping other salon owners be successful. I am committed in raising the level of excellence in our industry by sharing our systems with others. I believe you can see what kind of leader you are look behind you. If you don’t like what you see the change starts at the top. I feel blessed and honored to see the team that has trusted and followed me.
FR: It’s scary. As a salon owner these are the kinds of things that keep me up at night, especially when there are factors that can sometimes be out of our control – and that can drastically alter the financial stability of the business.
LL: As a new owner myself this means I must become not just an owner but a mentor! We must make sure to train our stylists and not expect them to take care of themselves. They are people with hopes, dreams, and fears. We have to lead them like a flock, and learn from them as well, so that we can better provide for them otherwise they will go and look somewhere else for that.
WHAT DOES THIS MEAN TO THE HAIRDRESSER/SALON EMPLOYEE?
AE: Have more appreciation and compassion for the owner(s) of the salon where you work. Whether or not you think they’re doing a good job or bad, they are probably doing their very best and have their hearts in the right place. It’s easy to be an armchair quarterback. You may think that you can do it better, but in most cases, you’d be in for a rude awakening if you tried. If you decide that the salon where you work is not right for you, move on and arrange for a peaceful transition that is acceptable to you and the owner, depending on your initial agreement and understanding regarding clientele. Don’t incite trouble within and poison the well because you’re frustrated – to pour gasoline and light a match on your way out is a very selfish and spiteful thing to do that mostly hurts the rest of the staff, many of whom may be perfectly happy with their work experience. Over the years, we’ve seen many careers ruined by a few such stylists. Most importantly, don’t burn bridges when it comes to your career. The owners of your salon, no matter what you may think of them, will probably never need you again, but you may very well need them.
And if you haven’t completely given up on your salon but think that improvement could be made, try speaking with the salon owner(s). You may be surprised by how receptive and appreciative of your support they will be. But if they don’t act immediately on your input, don’t get discouraged or be afraid to remind them. For example, Eva and I have such input being thrown our way all the time and often forget, not because we don’t care, but because there is so much that we constantly juggle. We see reminders from employees not as a nuisance but as a sign that they care. Lastly, if the owners are not receptive to your input, at least you did your best and can move on with a clear conscience.
When we interview for our apprenticeship program those who have already worked at other salon(s), their most common reason for wanting to leave their current place of employment (as well as why they left previous salons) is lack of education. We literally hear this at nearly every interview. But why would salon owners commit to you and expand a great deal of resources on making you successful, when there’s no commitment in return?
Although what I’m about to say next may seem counter-intuitive to many stylists, if you work for an owner(s) whose skill and business acumen you admire, and where you can see your future blossoming, offer to sign an employment agreement in exchange for additional training and support of your career. It may be in the form of extra classes with the owner or outside experts, PR support, or just a commitment to building your book. There are not many salon owners who would scoff at such an offer, as everyone benefits. And if you sign one when being hired on as an assistant, it gives you plenty of time to evaluate whether that salon is the right place for you, before you start building your book and having to risk walking away from a clientele. Such agreements are why we invest wholeheartedly in our staff and have stylists and colorists who are making six figure incomes within five or six years after beauty school, while being featured in publications like Allure and New York Times. Creative people, in particular, tend to be non-committal, but it would serve everyone to remember that successful careers are built on commitments – to your place of work, the clients you service, or companies whose product lines you may represent.
CP: I believe that just like in sports there are team players (basketball, football) and individual players (golf, tennis). If you are a team player you depend on and support your team mates. That is what works for us. In the week of Christmas and I cannot tell you have many messages we have on our private Facebook page of team members thanking each other for helping them. I hear that stylists leave salons with the thought they will make more money elsewhere. We celebrate having multiple hairdressers that bring home $100,000+ a year on 44% commission. Therefore, it has to be more than about the money. We have created flexible split shift schedules and the majority of our stylists work 4 days a week. I get my passion from watching young stylists who join our salon and grow into successful hairdressers that are buying cars and homes and enjoy traveling the world.
FR: It’s also scary to think that if my salon closes, how am I feeding my family and paying my bills? For me and companies that I own and run, my most important job is keeping my team working and making money so they can have a better life. As a school owner, I am very concerned for the student that graduates from my school and goes to his or her first job and the salon ends up closing, for whatever reason. Will the person have enough guidance to find the next salon? Hopefully, in that case, the school will offer assistance with other employment opportunities. It is the school’s responsibility to help alumni find a new salon. Without that, the risk is that they become discouraged and just drop out of the salon business altogether – which is obviously very bad for the industry. This is a bigger problem because now the school owner will experience a negative effect on their gainful employment score. Note – this is a topic that we can spend a lot of time discussing! From my point of view, it’s a potential salon category killer because it means salons will have a smaller pool of students to hire.
LL: This means the hairdressers/salon employees can now promote themselves. They can create a huge platform on their own through social media BUT a great salon owner/mentor will help the stylists do just that!
ONE TAKE-AWAY FROM OUR INTERVIEW IS THAT SOCIAL MEDIA AND THE MILLENNIAL WORK STYLE MADE THE DIFFERENCE. HOW DO YOU REACT TO THAT?
AE: Social media is an effective marketing tool, but its danger is the false sense of grandiosity one feels by having many “followers.” As one wise advertising executive said in his book – “the fastest way to kill a bad product is with good advertising.” You may attract new clients through social media, but if you lack the skill to back it up, you’ll quickly loose them while probably also getting slammed by them on the very same social media outlets. No amount of social media can supplant solid training and execution, and no woman ever forgets a bad haircut or a botched color job.
As for the Millennial work style, the biggest challenges that we have frequently found with this generation is an inability to take criticism and the need for instant gratification. This flies in the face of everything that it takes to be successful in our industry – years of dedication, sacrifice, and having your work constantly critiqued – first by your mentors and later by clients, the harshest critics of all. But of course, like in any generation, there are many exceptions and a number of them work for us. Just like we’ve had Millennials cry and quit the first time something went wrong, we’ve had others who have shown incredible dedication, work ethic, and tenacity, to eventually become the one-percenters of our industry.
CP: I have experienced stylists leaving to become “Instafamous”. I hold no grudges and know that everyone needs to follow his or her destiny. With our Protégé system in place we have a constant flow of talent. I would love it if they all stay with me but realize it is a different world and the days of stylists staying for 10-15 years are fewer are far between. When someone leaves we have young talent training to take their place. Our salon is a high end luxury salon where 70% of our guests are successful baby boomer while 80% of our team are millennials. How do you educate and train these millennials to gain the respect it takes to retain these guests? We take them to five star restaurants and hotels to experience what it feels like and to know our expectation. Our protégé get their first day on the floor after 90 days. It may still take 18-24 months to complete our program. Throughout that journey they add to their education and meet goals to add more days behind the chair. By the end of the journey they are working on the floor four days at a lower price point and assisting one until they reach their goals to be promoted to a Cutting Loose stylist.
FR: We have to realize that business is always and ever changing. All businesses, like retail and print media, are changing. Social media is forcing that change. I don’t have a direct answer yet for all of the ways to leverage that change, however, I don’t think it is appropriate to target millennials as the problem. We have to adapt and evolve as leaders. I look at it as an opportunity to step out of our comfort zone and challenge what has been previously done to evolve a new salon model, a model that includes things like modified work schedules to long day shifts. For example: getting behind social media to promote the individual to promote the salon. However, the new model evolves. It does require work and an open mind (myself included.) Sometimes, as leaders and owners, we get on a path, have blinders on and don’t listen to what is happening. No salon business will survive and flourish without creating a win/win/win for team, guests and owners. I always put myself last because if the first 2 are not happy, we only have a hobby, not a business.
LL: As a freelance stylist, millennial and now a salon owner, I can relate to this topic all too well. My career sky rocketed because of social media especially thanks to Instagram. I utilized it to my advantage and took every opportunity I could get from social media. Thanks to social media not only did it help me with having a solid clientele and unite me with many brands and people across the globe, but it allowed me to empower and inspire other artists as well! Social media is now our business card, website and portfolio. Let’s grow with the times and unite within social media and create a community on social that will translate to real life.
Efros asked and answered an additional question:
WHAT DOES THIS SAY TO SOMEONE WHO IS CONSIDERING OPENING HIS OR HER FIRST SALON?
AE: It should serve as a cautionary tale to think long and hard about the sacrifices they are willing to make and the pain they are willing to endure, before taking the plunge. Being good at doing hair doesn’t translate in any way to being good at running a business, especially when it involves managing people. In fact, the very traits that can make someone a successful hairdresser, can work to their detriment as a business owner and manager.
When someone first opens a salon, they usually think that it’s going to be all about them, but then it turns out to be all about other people–your employees, your clients – and you’re usually last on the list but first to take the blame when anything goes wrong. Running a salon is all-encompassing. You can’t be an absentee owner and it’s not something that you can do effectively while also managing a full book of clients or trying to nurture a freelance career. When I first got into this business in 2003, I was also an Adjunct Professor of Marketing at Yeshiva University in NY. My plan was to help my wife, Eva Scrivo, get started with her new salon and then continue to help her out part-time. I quickly realized how naïve that idea was, and that after having held fairly high-level positions in companies large and small, running a salon turned out to be by far the most difficult thing I had ever done! Within a year, I quit my job at the university to manage our salon full time.