Thriving Stylist Podcast Episode #393: Ownership Blind Spots Keeping Salon Owners Broke

Release Date: July 7, 2025
Host: Britt Seva

Overview

In Episode #393 of the Thriving Stylist Podcast, Britt Seva delves deep into the critical ownership blind spots that prevent salon owners from achieving financial success. This episode, titled "Ownership Blind Spots Keeping Salon Owners Broke," provides valuable insights, real-life stories, and actionable strategies aimed at transforming salon businesses from struggling to thriving. Britt emphasizes the importance of business skills and strategic marketing over mere cutting and coloring abilities, highlighting the evolving landscape of the beauty industry.

Britt's Realization and Industry Context

Britt begins the episode by sharing a personal realization about the gap in business education for independent stylists. She recounts her early days in 2015-2016 when she launched Thriver Society to fill this void, noting:

"[00:06] Britt Siva: ...there was no coaching for independent stylists. If you wanted to learn how to build a business as a stylist, the best way to do it was to be with a salon company... But if you were independent, there was really no way to get access to it."

This lack of resources forced independent stylists to navigate business challenges without adequate support, setting the stage for the current issues faced by salon owners.

The Great Divide: Salon Leaders vs. Independent Stylists

Britt introduces the concept of the "Great Divide," a shift occurring over the past several years where salon owners and independent stylists find themselves on diverging paths. As independent stylists gained access to business education:

"[00:20] Britt Siva: ...the natural repercussion and ripple effect of that is that a lot of stylists did figure out how to do it themselves. And those who did...what do you need this salon for?"

This led many top-performing stylists to question their reliance on salon structures, creating a divide where salon owners must now compete with stylists who are equipped to build their businesses independently.

Five Key Elements of Successful Salons

Britt outlines five consistent strategies employed by salon owners who generate over a million dollars in revenue with healthy profit margins:

1. Implementing the Right Systems and Structure

   • Story Illustration: Britt shares a story from a salon owner who struggled with a toxic employee, emphasizing the necessity of having formalized systems and clear enforcement to maintain a positive salon environment.
   • Key Quote:

     "[10:15] Britt Siva: ...you create this messy business which a non compete is terrible. Terrible for culture, right?"

2. Putting Branding First

   • Successful salons prioritize their brand identity, ensuring it resonates with both clients and team members, fostering loyalty and a strong market presence.

3. Marketing Second

   • Marketing is treated as the lifeblood of the business. Even if owners dislike marketing, they understand its critical role in attracting and retaining clients and stylists.

4. Creating an Unbeatable Salon Environment to Work In

   • Beyond physical aesthetics, this involves cultivating a culture where stylists feel valued, motivated, and part of a cohesive team.

5. Paying Team Members Really Well

   • Competitive compensation structures ensure high performers remain loyal and motivated, reducing turnover and fostering a stable team dynamic.

Common Issues Holding Salons Back

Britt identifies several key pitfalls that prevent salon owners from realizing their full financial potential:

1. Lack of Annual Budget and Profit Plan

   • Explanation: Without a clear financial projection, salons operate on a "hope and pray" basis, making it impossible to track progress or make informed financial decisions.
   • Key Quote:

     "[17:30] Britt Siva: ...make profit should be built in from the start."

2. Bad Compensation Systems

   • Issues Identified: Overpaying low performers and underpaying high performers leads to dissatisfaction and high turnover among top talent.
   • Solution: Implementing a fair and scalable compensation model, such as Britt's Performance Impact Method, ensures stylists are rewarded appropriately as they grow.

3. Mismanagement of Retail

   • Problem: Traditional retail commission structures offer minimal profit margins for salon owners, making retail sales less lucrative than expected.
   • Key Insight: Britt challenges the conventional approach, urging owners to view retail as both a revenue and retention tool rather than a primary profit center.

4. Lack of Growth Strategy

   • Explanation: Many salon owners neglect proactive marketing and business development, relying instead on stylists to handle their own client acquisition, which can lead to inconsistent growth.

5. Emotional Decision Making

   • Impact: Decisions driven by fear or emotional attachments, such as retaining toxic employees for financial reasons, can harm the salon's culture and profitability.
   • Advice: Owners must prioritize the long-term health of their business over short-term financial comforts.

6. Being Stuck in Old Ways

   • Examples: Rigid scheduling, restrictive access to client records, and judgmental attitudes towards time off can alienate both clients and staff in the modern market.
   • Key Quote:

     "[31:45] Britt Siva: ...we have to build business forward. We have to get a grip on our financials..."

Strategies and Solutions

Britt offers practical strategies to overcome these blind spots and enhance salon profitability:

1. Performance Impact Method for Compensation

   • Description: This method ensures stylists earn a significant portion of the profits they generate, promoting a fair and motivating compensation structure.

   • Example Calculation:

     "[22:45] Britt Siva: ...when do they get theirs? ... the stylist is always going to make 70% or more of profit, and the salon will make 30% of profit or less."

   • Benefits: This approach not only incentivizes high performance but also aligns the salon's profitability with the stylist's success, fostering a true partnership.

2. Rethinking Retail and Commission Structures

   • Analysis: Traditional retail models often leave salon owners with minimal profits. Britt presents a detailed example illustrating how even optimal retail sales yield limited returns when standard commission structures are applied.
   • Alternative Approach: Viewing retail as a tool for client retention and revising commission structures to better reflect actual profit margins.

3. Implementing Annual Budgets and Profit Plans

   • Action Steps:
     • Projection: Create an annual financial projection to serve as a roadmap for revenue and expenses.
     • Accountability: Regularly review financial performance against the projection to make informed decisions.

4. Developing a Robust Growth Strategy

   • Marketing Focus: Invest in strategic marketing efforts to consistently attract new clients and retain existing ones, rather than relying solely on stylist-driven client acquisition.

5. Fostering a Positive Salon Culture

   • Environment Creation: Ensure the salon environment is supportive, motivating, and aligned with the brand's values to attract and retain top talent.

6. Embracing Coaching and Continuous Improvement

   • Mindset Shift: Owners must remain open to coaching and new strategies, avoiding the trap of being "stuck in old ways." This openness is crucial for adapting to the evolving beauty industry landscape.

Conclusion and Final Thoughts

Britt concludes the episode by reiterating the importance of addressing ownership blind spots to unlock a salon's full financial potential. She emphasizes that building a thriving salon requires a balanced approach to business management, strategic marketing, and fostering a positive work environment. By implementing the strategies discussed—such as establishing clear financial plans, adopting equitable compensation models, and rethinking retail management—salon owners can overcome common pitfalls and ensure sustained growth and profitability.

Final Quote:

"[50:30] Britt Siva: ...if you can figure out those things, you'll be unbeatable. So much love happy business building and I'll see you on the next one."

Key Takeaways

• Business Education is Crucial: Beyond technical skills, salon owners must invest in business acumen and strategic marketing to thrive.

• Strategic Compensation Fosters Loyalty: Implementing fair and scalable compensation models like the Performance Impact Method can retain top talent and drive salon success.

• Annual Financial Planning is Non-Negotiable: Establishing and adhering to an annual budget and profit plan provides a clear financial direction and accountability.

• Positive Salon Culture Matters: Creating an unbeatable salon environment attracts and retains motivated and high-performing stylists.

• Embrace Continuous Improvement: Staying open to coaching and new business strategies is essential for adapting to industry changes and achieving long-term success.

By addressing these ownership blind spots and implementing the strategies discussed, salon owners can transform their businesses, ensuring financial stability and creating a thriving environment for both clients and staff.