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$40,069: Strategies and Secrets to Revolutionize this Number Forever · Salon Success Secrets — The podcast for salon owners who are done hustling harder and ready to break their revenue ceiling.

• 0:35
  Speaker 1: 40,069 dollars.
• 0:40
  Speaker 1: That is the number that we are going to be talking about today on the podcast.
• 0:46
  Speaker 1: We're super excited to have you here to dive into.
• 0:48
  Speaker 1: What does this number mean to you, or what does this mean to the industry, and how can we impact this to create a bigger, brighter future for all?
• 0:59
  Speaker 2: Yeah, what's up?
• 1:00
  Speaker 2: I'm Jen Booth and with me I'm a co-host, lindsey Lowe, and you know I've been here before as like wow, if you think about that number 40,069 dollars, like that's.
• 1:11
  Speaker 2: A lot of times what happens with salon owners, in my opinion, is they make more money behind the chair than they actually do being a salon owner, and so that's why a lot of times they feel stuck there.
• 1:22
  Speaker 2: So if you ever feel stuck, don't feel alone.
• 1:26
  Speaker 2: We've been there before too, and so today we're going to talk about really how to break that down and what your opportunities are to help elevate that 40,069 dollars per year.
• 1:39
  Speaker 1: Yeah.
• 1:39
  Speaker 1: So you might be wondering what does that number mean?
• 1:42
  Speaker 1: Where is this coming from?
• 1:44
  Speaker 1: What's that all about?
• 1:45
  Speaker 1: Well, 40,069 dollars.
• 1:48
  Speaker 1: If you Google what the average hair salon owner makes, that would be the number that would pop up, and you can check this out on indeedcom, where they kind of break that down to what that really means inside of the industry.
• 2:06
  Speaker 1: I think there can be a lot of confusion inside of our industry, like Jen indicated earlier, about the difference between being a salon owner, being a stylist, being an esthetician, whatever additional roles there might be.
• 2:20
  Speaker 1: But today we're talking about the salon owner role specifically and that average wage.
• 2:28
  Speaker 2: Yeah, I love that, lynne.
• 2:29
  Speaker 2: So we did a little math, a little math in here, and so what our math found is my calculator died.
• 2:36
  Speaker 2: Lynne, do you have that handy math ready?
• 2:38
  Speaker 2: I?
• 2:39
  Speaker 1: sure do.
• 2:40
  Speaker 1: So when you break down that 40,069 dollars, let's say I know the average hairstylist probably works that's a hairstylist and a salon owner probably about 1673 hours a week.
• 2:54
  Speaker 1: I'm just kidding, but it can feel like that some weeks.
• 2:59
  Speaker 1: So we broke it down to 40 hours a week, 50 hours a week and 60 hours a week, because the average salon owner, when they first start out, is somewhere between that 40 and 60 hours a week mark.
• 3:11
  Speaker 1: And so if we stick on that conservative side of just 40 hours a week, if you're getting away with just that, then that means you're earning a whopping $19.26 an hour.
• 3:23
  Speaker 1: But if you start creeping to that 50, you're now earning $15.41 an hour.
• 3:30
  Speaker 1: But when you get up to that 60 and hey, we just stopped there, we know a lot of people work beyond that amount of hours as a salon owner, especially if you're offering services behind the chair.
• 3:40
  Speaker 1: And so that would make, if you were working 60 hours a week, that would make your hourly wage $12.84.
• 3:48
  Speaker 1: We need to change that today.
• 3:55
  Speaker 1: We want really people salon owners across North America to be taking home the salary that they deserve for all of the love that they are pouring into their salon companies and the growth that they are creating for those around them.
• 4:14
  Speaker 2: I love that, yeah and so and this is not to have any judgment about what anyone makes an hour, it's really just to create awareness.
• 4:20
  Speaker 2: It's like that gift of awareness that, like you know, if I'm really working 40 million hours a week, like Lindsay was saying, and I'm making $12 an hour, like what really could change here, what is the real, true possibility here?
• 4:35
  Speaker 2: And that's the gift that we want to give you today.
• 4:36
  Speaker 2: Or just some strategies to help boost income, some awareness of how you can make more per hour as a salon owner.
• 4:44
  Speaker 2: So that's what we're really ready to dive into today.
• 4:47
  Speaker 2: So let's start with first is you've got to take the blindfold off if you want to make more per hour, and you've got to start with your profit and loss.
• 4:55
  Speaker 2: And you know, we hear it a lot of times that salon owners or salon owners don't like numbers, and that's okay, it's not right or wrong.
• 5:04
  Speaker 2: But to really understand how to create more, you've got to be in control of your finances, because I love to come from the place of being in control of my finances instead of my finances being in control of me.
• 5:18
  Speaker 2: So that's the first thing is you've got to start driving the bus in that way, and if you're not committed to looking at a profit and loss, or not even sure what a profit and loss is, you've got to start there so that you can make informed decisions about what you need to do next.
• 5:33
  Speaker 1: I love that, and you know really what we want to dive in today are what are three strategies that can boost your income today.
• 5:43
  Speaker 1: You know what are some things that you can do right away to really start to boost that, you know, and so, like Jen was mentioning, first, you've got to take that blindfold off and just be willing to sit with those numbers to see exactly what's going on so that you can recreate that story.
• 5:59
  Speaker 1: You know we could probably go through a ton of different strategies, but we have chosen three that we've.
• 6:08
  Speaker 1: You know, a lot of the salon owners that we work with inside of our PhD program have implemented to really get some cash injections into their business right away, and so we just wanted to give you a couple of those today so that you could start to change the trajectory of your business as well.
• 6:28
  Speaker 2: Yeah, I love that.
• 6:29
  Speaker 2: And you're like, okay, we were talking about profit and loss.
• 6:32
  Speaker 2: Profit and loss.
• 6:32
  Speaker 2: So one of the main things you want to look at when it comes to boosting income is why you need your profit and loss is because you've got to have an understanding about your wages.
• 6:39
  Speaker 2: So you've got to know who you're paying, where it's going, and you know we like to come from the place of teaching that you really want to break your wages out.
• 6:49
  Speaker 2: So a lot of times when we're looking at a profit and loss, it'll just say wages and it'll help everybody's wages together Salon owners, service providers, hourly employees, you know, whatever it may be.
• 6:59
  Speaker 2: So you really to get a better understanding of that.
• 7:02
  Speaker 2: You really want to make sure that that's broken down so that you can understand.
• 7:05
  Speaker 2: Hey, you know, I see right now that if I'm looking at a profit and loss and this is just an example, guys is like my wages, my service provider wages, are at 60% of my total income, and so if you're service provider, wages are already at 60% of your income, that only leaves 40% left to do everything else that you need to do, and so you know that's just a really a gift to look at is like, okay, that would be the starting point.
• 7:34
  Speaker 2: And so that's one of the main ways to boost your income is getting control of where your wages is going.
• 7:39
  Speaker 2: And we're not saying that you change things right away.
• 7:41
  Speaker 2: What we're saying is that you just get that gift of awareness to say, hey, I need to take a look at my career path, I need to make sure that my service providers are living within that career path, that I don't have a level six service provider that's performing at a level two service provider as a level level two service provider.
• 8:00
  Speaker 2: And so that is one of the best ways to get control of your income is really being in control of how your wages are distributed.
• 8:09
  Speaker 1: Yes, I love that, Jen, and you know.
• 8:11
  Speaker 1: Another section about wages, like you mentioned, is hourly employees.
• 8:16
  Speaker 1: You know whether they're working on your guest experience team or they're a hospitality host, whatever their role might be, maybe it's you know you are at a size where you have a manager, director or somebody in that position, or even just your your owner income would go in that as well.
• 8:33
  Speaker 1: You know we want to place these strategically on our profit and loss so that we can see hey, what does this look like to scale and grow?
• 8:41
  Speaker 1: You know, because it doesn't matter if you are a $7 million salon or a $70,000 salon.
• 8:51
  Speaker 1: If you don't get your profit and loss set up correctly and get those numbers at successful spots, it's not.
• 9:00
  Speaker 1: You're not in a place to grow and scale.
• 9:02
  Speaker 1: You know, I think a lot of people think gosh, if I just, you know, brought in more revenue, that would solve all of my problems.
• 9:10
  Speaker 1: But the truth is it's getting you know, those cost of goods under control, understanding your expenses each month.
• 9:19
  Speaker 1: That can be what really creates cashflow inside of a company and can take you into a totally different space.
• 9:29
  Speaker 2: I love that lens.
• 9:30
  Speaker 2: A lot of times, too, that helps you decide is like is it time for me to have a salon manager or director?
• 9:36
  Speaker 2: Because a lot of times, what we will see and there's no judgment to it is, though, as we see a smaller salon and they're paying someone $30 to $25 an hour to have a salon manager, and the salon owners only make $12 an hour.
• 9:50
  Speaker 2: And so to really understand what funds you do have and how you can make the most of what you do have, yes, that's a great way to look at that.
• 10:05
  Speaker 1: And so once we love to kind of break this down inside of our full program to be able to see all of that specifically.
• 10:12
  Speaker 1: But once you know where all of those wages are and you can see that full picture, then you know what your next strategy is as it comes to wages.
• 10:22
  Speaker 1: Maybe you need to adjust your pay scale to move forward, or this doesn't mean that you would take away anything from anybody, necessarily.
• 10:33
  Speaker 1: There's definitely some great ways to grow around that, but it's just seeing where you're at so that you can see where you're ready to go next.
• 10:43
  Speaker 1: And so once you kind of have that wages portion under control another key area to look at when it comes to three strategies to boost your income today it's really getting clear on those different profit hubs inside of your salon company.
• 11:00
  Speaker 1: And so there's a ton of different profit hubs inside of your salon or spa company and it's just really getting clear on what each hub is doing.
• 11:12
  Speaker 1: And I think the hub is a cool word.
• 11:14
  Speaker 1: It just means the central part of a wheel rotating on or with the axle and from which the spokes radiate.
• 11:22
  Speaker 1: And so for us, if a profit hub is not healthy and working.
• 11:28
  Speaker 1: It's not able to move like a wheel would, and so that's really truly what we want to be looking at.
• 11:36
  Speaker 1: Okay, so you've got this profit hub, but is it working?
• 11:39
  Speaker 1: You might be asking yourself what are some examples of different profit hubs?
• 11:43
  Speaker 1: You know it depends on all the services that your salon or spa offers.
• 11:49
  Speaker 1: You want to break it down per service.
• 11:51
  Speaker 1: You also want to think about, like your different retail hubs inside of the salon.
• 11:56
  Speaker 1: Anything that is an income generating thing inside of your salon company would be considered a profit hub.
• 12:06
  Speaker 2: I love that PhD also stands for profit, hub defined Just in case you guys didn't know.
• 12:12
  Speaker 2: So, like Lindsay was saying, is like you want to get control of that.
• 12:17
  Speaker 2: So like just making a list of all the services you offered, like really looking in at your services, because a lot of time what we'll see is like some of your biggest services that you do most is that you could actually be losing money on so ouch that one really hurts.
• 12:32
  Speaker 2: And so you want to make that list of services.
• 12:35
  Speaker 2: You want to calculate revenue for each service.
• 12:37
  Speaker 2: So you know, during the last three months, on a haircut for 45 minutes, this is what it cost.
• 12:43
  Speaker 2: You can get that usually that data from your salon software booking system or point of sale system.
• 12:49
  Speaker 2: And then you want to identify the direct costs for each service.
• 12:53
  Speaker 2: So you know, if it's a haircut there's usually not as much direct cost, but there's going to be some shampooing and some conditioning.
• 13:01
  Speaker 2: So like, per service, what does it take to make that magic happen?
• 13:05
  Speaker 2: And then, once you account for those indirect costs, then you got to kind of calculate the net profit for each service.
• 13:12
  Speaker 2: So let's just say, for easy math, a haircut is, let's say, $50, right, and then it costs you, let's just say, $3 to actually perform the service to do a haircut.
• 13:26
  Speaker 2: That might be a little high, but we'll just say $3.
• 13:29
  Speaker 2: So if it's $50 minus 3, you're already at a net profit of $47.
• 13:35
  Speaker 2: But what we forgot, though, is you've also got to take commission out of the equation.
• 13:38
  Speaker 2: So if you think about that, if you take 50 times let's say, someone makes 50% commission that's $25.
• 13:44
  Speaker 2: Then you've got to take those cost out.
• 13:46
  Speaker 2: We said it was $3.
• 13:47
  Speaker 2: I'm really mathin it over here for you guys hope you're staying with me.
• 13:50
  Speaker 2: So that's like $22.
• 13:51
  Speaker 2: And so it's like okay, that takes me 45 minutes.
• 13:54
  Speaker 2: So just kind of diving into what is that price per minute, because if it takes you, it costs you, you make $22 on it and it takes the salon 45 minutes to do.
• 14:06
  Speaker 2: That's going to give you like a price per minute of 48 cents.
• 14:09
  Speaker 2: So that'll do the math right?
• 14:11
  Speaker 2: Yes, I think so, 48 cents.
• 14:12
  Speaker 2: My math, my calculator, ain't working over here, but that will give you a cost to look at, and a lot of times what we'll see is especially with extensions, as people will do extensions for like six or seven hours, but they really almost could be making more money doing a men's haircut with a brow wax or a men's haircut with a treatment, so I think that's really just important to do to look at.
• 14:37
  Speaker 1: I agree, and I love all that math and you might be thinking to well, hello, you've got rent, you've got all these other bills.
• 14:43
  Speaker 1: Yes, we're just saying, you know, let's break it down on what it takes to perform that exact service.
• 14:49
  Speaker 1: You know, because I think another key thing is to look at your retail lines.
• 14:55
  Speaker 1: You know, because you want to make sure that you are staying in alignment with where you need that profitability to be at.
• 15:03
  Speaker 1: You know, the nice thing about retail is that there's not then employer taxes on top of everything.
• 15:12
  Speaker 1: You know, there's several things that can kind of drive that number down to be in a better spot to create a healthy salon company.
• 15:22
  Speaker 1: But it's just really again taking the blinders off and seeing, hey, what are my profit hubs doing inside of the salon or inside of the spa?
• 15:31
  Speaker 1: And you know how can we change that if that's the case?
• 15:35
  Speaker 1: Because, like Jen said, you know, with the extensions and you know we do see this a lot with a lot of salon companies specifically with extensions, and I think that's such a trendy thing inside of our, you know, business and sort of the beauty industry and, listen, we love it, we are all for doing extensions, but it has to make sense for everybody, you know.
• 15:59
  Speaker 1: And so how do we like?
• 16:00
  Speaker 1: Is there ways that we can cut down on time?
• 16:03
  Speaker 1: Is there ways that we can, you know, still deliver that same amazing value, but make it to where?
• 16:11
  Speaker 1: Hey, that profit hub is a wheel that can move inside of our salon, because if it can't, then it's keeping you stuck.
• 16:19
  Speaker 1: You know and and there's a way bigger difference of you know of what it looks like and what it feels like.
• 16:27
  Speaker 1: You know, because it might look cool on Instagram to say you're doing all these extensions, but it might not feel great because you're you could be losing a ton of money.
• 16:36
  Speaker 1: We see people lose money on this all the time inside of our industry, you know, and so I would much rather feel good about you know, the wheels are moving in my salon company.
• 16:47
  Speaker 1: Then then worry about what it looks like, but but we also think that you can get it to a good place, to where it looks good and it feels good too.
• 16:55
  Speaker 1: So really, that's the win-win that we're trying to get you today.
• 16:59
  Speaker 2: I love that, lindsay, you don't have to stop doing those services.
• 17:03
  Speaker 2: It would just be oh great.
• 17:04
  Speaker 2: There's the gift of awareness.
• 17:05
  Speaker 2: I need to increase my prices.
• 17:07
  Speaker 2: I need to work on my skillset with my service providers, because here's the thing, guys, if your salary is increasing as a salon owner, guess what?
• 17:16
  Speaker 2: Your team's take-home pay is increasing as a salon owner, and I think that's the most magical gift that you can get when it comes to that.
• 17:24
  Speaker 1: Yes, I love that, and so we've already gone through wages, we've gone through the different profit hubs inside of your salon or spa company.
• 17:33
  Speaker 1: But now let's talk about that third magic strategy to boost your income, which is inventory.
• 17:39
  Speaker 1: I love inventory.
• 17:41
  Speaker 1: It's such a great part of the salon.
• 17:45
  Speaker 1: I'm sure anybody who's ever done a facial or done a blowout or any service like that would never do any of those things without amazing products, and so this is such an important part of our journey inside of the salon or spa because we know it's what makes the magic happen all the time, and so all of our guests need to be taking home the right things to make their hair, skin, nails, whatever it might be, look and feel its best.
• 18:18
  Speaker 1: And, as salon owners, we need to have some control over our inventory to really be able to boost the income, but also just to create a healthy environment.
• 18:33
  Speaker 2: I don't know if you used to come for these days, but I remember first starting I would just go look on the shelf and like, okay, we'll get four.
• 18:39
  Speaker 2: It looks a little dusty there.
• 18:40
  Speaker 2: We haven't word that in a while We'll get some four.
• 18:42
  Speaker 2: Give me four, six, six.
• 18:44
  Speaker 2: And then I got to think about it.
• 18:45
  Speaker 2: I was like, okay, wait a minute.
• 18:48
  Speaker 2: If you think of like the big stores, like any store, like Walmart, I mean, they wouldn't have somebody just going on the shelf thinking, oh yeah, that looks a little dusty, let's don't order that today.
• 18:58
  Speaker 2: And so, like that, really like when you really have a system for inventory, that's when you really get to be in control of that.
• 19:06
  Speaker 2: When you're in control of that, that's when you really are able to elevate your income and also create more opportunities for your team.
• 19:13
  Speaker 2: And so you just really want to understand how, really breaking that down to an inventory, like on the retail part, breaking it down for your you know your brands, whether you carry Redken, keras, pyrrogy, whatever brand, there's no right or wrong brand to make sure that you're in exchange of actually what you're selling versus what you're spending, because a lot of times we'll hear Slyna, that owner, say, oh well that that good old company there, they had like a 25% off, so I just stocked up on everything, only to know that they, they didn't have that opportunity, they didn't have that cash flow to stock up on everything and that really creates like that dark hole later on for them.
• 19:52
  Speaker 2: So I think you just really want to understand exactly where your money is being dispersed.
• 19:58
  Speaker 1: So true, jen, and you know we actually have a really cool resource on our Instagram page.
• 20:04
  Speaker 1: If you go, just you know one of our little highlight buttons that talks about assets.
• 20:08
  Speaker 1: We have some amazing assets there, but one of them is, you know, giving you that magic formula that retailers use across the nation and it really does take the guesswork out for you so that you know when you do get to that place where you do have some cash flow and you could stock up a little bit on a 25% off sale, you're able to do it in the right places Because, like Jen mentioned earlier, you don't want to be refilling the dusty part of your retail shelves.
• 20:38
  Speaker 1: You know you want.
• 20:39
  Speaker 1: You want to be having enough of the items that you know give people great results, and so you want to make sure that you have plenty of them in there to meet the demand.
• 20:51
  Speaker 1: And so if you go to our Instagram page, check out those highlights the one called assets you can get that retail, the inventory calculator worksheet.
• 21:02
  Speaker 1: It's got some other amazing tools on there too, so that could be really something that makes your life easier.
• 21:08
  Speaker 1: Because, jen, I swear to, we used to work together because four was the magic number in our salon too, it was like four.
• 21:15
  Speaker 1: And then all of a sudden one day I was like, wow, we do actually run out of six in earlier, so maybe we should do six of those or eight of those you know.
• 21:22
  Speaker 1: And so there was no rhyme or reason, it was just guessing.
• 21:25
  Speaker 1: Well, we want to take that guesswork out of out of it for you.
• 21:29
  Speaker 1: And really you know the PhD program exists because, like sure, you could figure all this stuff out over years and years of trial and error, because that's what it took us to kind of get to that place.
• 21:41
  Speaker 1: But we want to fast forward your results so that you're able to get them quicker, because we know that that's that's going to change your life, it's going to change your team's life and it's really just going to make the beauty industry a more beautiful place.
• 21:57
  Speaker 2: Yeah, I love that lens and you know, one other thing to look at too is some of you may be familiar with this is really understanding separating parts and labor.
• 22:04
  Speaker 2: You know, took them in a cart to the mechanic the other day and that was a list for the service, the actual service, and a list for the for the parts.
• 22:12
  Speaker 2: And I don't know about you guys, but I I don't know how many shades EQ treatments I gave away back in the day, but I think I would have a lot, a lot more money, a lot more dough, if I would have charged correctly for those shades EQ.
• 22:30
  Speaker 2: The shades EQ experiences are treatments and with having salon scale or Vish, which are some of your color management opportunity systems, it allows you to truly charge for the cost of product that you're using.
• 22:45
  Speaker 2: And, man, that's a game changer for sure.
• 22:47
  Speaker 2: To be able to really separate that parts and labor venture out really helps to create clarity and also allows you to create so many more opportunities for your team.
• 23:01
  Speaker 1: I love that you talked about that because really that can tie into you know those profit hubs too, because, like you said, you don't know how many shades of Q treatments you gave away back in the day.
• 23:11
  Speaker 1: Same Like I was shocked when I actually did the math on it.
• 23:15
  Speaker 1: You know we were at the time charging $20 for a toning service and you know that allowed for one ounce of color and one ounce of developer.
• 23:24
  Speaker 1: And you know, let's just say I don't think anybody had any ill intentions, but they probably weren't charging what you know was necessary.
• 23:32
  Speaker 1: They would sometimes mix up four or six ounces of color and four or six ounces of developer and put this on the on the client and, hey, maybe they would even charge double the service.
• 23:43
  Speaker 1: But when we broke down that cost, we were paying our guests to get their hair toned or glossed, and that was a red flag moment like oh gosh, okay, we have to find a new way to do this.
• 23:59
  Speaker 1: And so, like Jen mentioned, breaking out those costs of your you know, your service and your products is going to be one of the key strategies to boosting your income.
• 24:13
  Speaker 2: So I've given you three really cool strategies inventory, Looking at salon scale and finish, really dialing into your wages, understanding who you're paying.
• 24:25
  Speaker 2: What really gives a incredible coaching opportunity for your team to is like, okay, you know old Jen, she's living in level four.
• 24:34
  Speaker 2: Like what coaching does she need because she really is a level six and so that will really create some freedom for you.
• 24:42
  Speaker 2: And then also looking at those profit hubs and if you think of it like like Lindsay was saying, like the spokes of a bike, like that center is profit and we know that profit is like oxygen for your body, so that wheel cannot turn if there's breakdowns in that center cap or that most stronger, the strongest foundation of a will in general.
• 25:03
  Speaker 1: Yes, and so we hope you're getting some amazing value out of today.
• 25:07
  Speaker 1: If you want to learn more about the PhD program, just visit the phdprogramcom.
• 25:11
  Speaker 1: Send us an email.
• 25:12
  Speaker 1: Hello at the phdprogramcom.
• 25:14
  Speaker 1: You can even call us or text us.
• 25:17
  Speaker 1: We would love to hear from you.
• 25:18
  Speaker 1: 858556503445 would be the number that you could call or text us at.
• 25:26
  Speaker 1: We can't wait to see you again soon, and we are excited to hear the success that you get from implementing some of these strategies today.
• 25:39
  Speaker 2: All right, so here's to elevating your new take home pay, elevating your team's take home pay and really creating the life that you deserve.
• 25:48
  Speaker 2: Bye for now.