Brit Siva (0:02)

Do you feel like you were meant to have a kick ass career as a hairstylist? 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 Brit Siva, social media and marketing strategist just for hairstylists and this is the Thriving Stylist Podcast. What is up? And welcome back to the Thriving Stylist Podcast. I'm your hostess, Bristiba, and I have a relatively spicy episode coming your way. It's not burning hot, but there's definitely kick to it. So for all of my years of hosting this podcast, which is eight years or something like that, so wild to think about, I've always really made an effort to stay neutral and classy and I do kind of want to stay that way. But there's an element of, I guess, transparency that in my spirit, I feel like I haven't always stayed true to. And you may have noticed I'm starting to get a little bit more vocal about things I don't agree with. I am still of the belief I'm not the only business coach capable of giving people breakthroughs in their business. I think there's some amazing coaches out there. I think there's lots of great systems and structures that work really well and show proven results and all of that. So this is not coming from the place of my way is the only way. It's not. And there's some things other coaches do way better than me. And this is not to bash anybody else. What I'm really struggling to turn a blind eye to is there are some very common and predictable patterns that I've had a chance to see and that I know some other business coaches listening to this will have had a chance to see as well in some companies producing negative results for salons. And we're just not supposed to talk about it. We're just supposed to be quiet and hope other people people figure it out. And that to me is really scary. And whenever I do episodes like this, my point and purpose is just to bring awareness so that everybody can kind of think through. Does this make sense for me? Just to give you the tools to ask the good questions, basically. Is it like my hope in sharing episodes like this is to get your wheels turning and to have you start to think like, wait a minute, does that really make sense? How is this going to land when I bring this up to stylists? Is this really financially what makes sense to me? Does this other coaching company have another agenda? Like, I just want logical thinking is all that. My hope is from this podcast. The other thing is if I mention something and you're like, oh, I think such and such coaching company does that. The reason why that thought is coming up for you is that coaching company is probably long standing, established, well known. That's how you're able to make those connections. And I don't think that there's any long standing, well known coaching company that has not produced some good results. You'd have to have or you'd be out of business. The piece I'm trying to dismantle is that there's one right way of doing anything. I think there's lots and lots of wrong ways to do business. Lots and lots and lots and lots. And there's a handful of really good right ways, mine not being the only one. So I just want to share that as a caveat at the top, that the point and purpose of this episode is not to dismantle anybody else's point of view. It's to just encourage some critical thinking and to have everybody just really think to themselves is what I'm doing operationally in my salon, what I should be doing forward. Okay, so let's get into it. So there's five very common business ownership, business operations strategies that for me, I don't agree with and don't coach to. And the reason I'm choosing the ones I'm choosing today are because I feel like they're buzzing. These are things that people are having conversations about, whether it be owners or stylists or whatever. I think these are hot topics and I just kind of want to share where I stand, where I land. Why? So you have a little bit of context. So first things first, service fees off the top of the ticket. So let me explain what this looks like. This would be an employee only thing. If you were a booth renter, you would not be encountering this. And it's called lots of different things. I've seen it called product charges. I've seen it called service cost. But what it is, is, is essentially, I call it like a legal loophole. It is legal. It's totally legal in most states. The ones that I'm aware of. You could cross check on this. Every state's laws are a little bit different. This structure is legal so long as everybody who's being compensated this way has signed and agreed that they understand it. And by the way, that's not just with this legal compensation structure. It's with all compensation structures. People have to sign a document saying, I am being paid this way. And I understand it. You can't just have manipulative compensation. That's where team members lose trust. Right. So in a commission type of environment, there is a grayish area where businesses can say, yes, you're making 50% commission, but before your commission is calculated, there's this certain fee that's going to be withheld. It's much more common in, like, car sales industries. Like, you don't see it so much in, like, intricate service industries like ours. However, we do fall into a category where this is legally very possible. Okay, so what it looks like is stylist is paid 45% commissions, but there's a byline somewhere that says, well, for every tint you do, we take $5 off the top. Or for every highlight, there's a $4 service charge. And what the business does is, let's say you do a hundred services well, they're going to take $500 off of your service revenue and you'll be commissioned on the back half of that. So if you did $10,000 in services and there was 500 doll or product costs or whatever they call it taken out, you're commissioned 50% on the 9,500, not in the initial 10,000. I'm going to say this is not uncommon. I don't know that it's overly common. Like, I can't say, like, well, everybody does it because I know that they don't. But it's not uncommon. We see this a lot in the industry. The reason why I don't love it is not because I want owners to bleed out. I think I've made my stance very known. I think that owners should make great money. Why would anybody own a business if they cannot turn a profit? You'd be a stupid business owner. So for stylists working for owners, your owners should turn a profit. If not everybody has to work in suites. Like, if nobody is going to be willing to take on the operational cost, everybody has to be independent. I don't think that's a model. I think we'd lose probably 70% of our industry if we went that way. We need great salon leaders. We need great salons. We need great salon owners. And to have that, they have to be making money. Otherwise they're terrible business people and you shouldn't be working for them anyway. So everybody should get theirs. I've never argued against that. My argument is it feels manipulative to promise people 45% commission, but actually, no, they're making more like 41 or 42% commission or call it 43% commission or whatever because you're taking a chunk off the top. And that's where it's like, why don't you just call it 43% commission? That's the piece I'm not certain about. I get DMs not all the time, but several times a year from stylists asking me, is this legal? It feels tricky. I don't trust my owner anymore. I didn't realize they were doing this. They won't break down for me how much they're withholding. What happens when you have complicated compensation structures such as this one is it creates this distrust where the stylists feel like they need to be seeing all the time and they'll say, what's happening with my money? And that's how they feel. And when it feels like there's this arbitrary charge on top that they're not certain where it comes from, you could see that, like, put yourself in a stylist's shoes and it's like, well, it's going to change every time because the services you're doing change every time and they're not getting a breakdown. So maybe if they were getting like a breakdown on their paycheck of where that was coming from or it was a little bit more clear, but I've not seen that structure. So while I'm very okay with and I support and coach to the overhead that a salon incurs, running the business being covered by buy part of the split. This service fee or product fee or usage fee or service charge or whatever we like to call it, off the top, I think just opens a can of worms and is a breeding ground for distrust. Next, promotions based on pre booking percentage or retail sales. If you've been listening to this podcast for a long time, you know that this is my stance. But if you're new, welcome to the show. I want to explain why I don't believe that commission increases or service rate increases should be tied into pre booking or retail at all. And it's not because I think pre booking or retail are bad. I just don't think they are the same as they used to be. And we'll talk about why in full. As somebody who does get to see the back end, I've seen the back end of the thousands of businesses at this point. I've gone deep into over a thousand salons at this point I'm able to see the patterns in performance. It has been many, many, many, many, many years since I've seen a direct correlation between pre booking and high performance. I see high performers who don't pre book at all and make multiple six figures. Now do I also see stylists who make multiple six figures in pre book? Totally. But what I'm saying is there's no correlation between if this then that if you do it and it works great. If you don't do it and it works great. So locking in somebody's future earnings potential based on this metric that data is not supporting is like a hinge factor in somebody's potential. I'm not too sure about that. It's confusing to me. And then the retail piece we're going to unpack again later. I saved my spiciest advice they'd never follow for the very end. So stick tuned for that, but put a pin in that. So I don't love promotions based on pre booking percentage or retail sales. So I do have an episode where I dig a little bit more into pre booking. It's worth a listen. So it's episode 329 and it's called Breaking down the Pre booking negative impact. If you just do a Google search for thriving stylist podcast 3:29 it'll come right up. So that's a quick way to get to it. So thinking about pre booking when I talk to stylist and salon owners right now it is currently summer of 2025. We are getting more last minute cancellations and rebooking and schedule changes than ever before. Like widely, widely reported and not all clients but a and we've seen this coming. I think it's kind of hit a fever pitch but this has been in the works for a long time. I don't know about you, my schedule is more unpredictable than ever. It could be because I have a school aged kid although you know my parenting journey started very young. So I've had school aged kids for 20 years and never has it been quite so unpredictable as it is for me right this second. And I think it's just that the pace of life has changed. Expectations of all of us as humans have changed and we like to be able to be more flexible. So when we say somebody has to pre book in order for a stylist to be successful, it's almost like you're, you're not trying to control the stylist behavior, you're trying to control consumer behavior. And if there's one thing as a business coach I know cannot be controlled, it's consumer behavior. Because trust me, if I knew how to control it, I would just coach to you all doing that. The consumer behavior piece is the X factor that we have no control over. All we can do is adapt to it. And I'm not seeing consumers saying I want to lock in my schedule 12 weeks from now. Some do. Especially when you look at like Boomer generations or even Gen X, they're a lot more interested trying to get a millennial or Gen Z to lock in their schedule two, three, four months from now. It's impossible. Like there's going to be movement. So why we're still hinging so deeply on pre booking, it's very confusing to me. Now going back to the retail piece, retail sales are important and I think that retail is a huge part of the service experience. I love leaving a service provider with a bag of goodies. I really do. It feels like now I'm able to sustain my. But there are some snags in retail that I don't think get talked about transparently enough. We're going to talk about it later in the episode. For me, retail is just a separate metric. It's not a, it's not a bad thing. I am always going to be pro having retail in the salon. So don't get me confused on that. I just don't think that we're transparent or fully looking at the numbers of what is possible and what is not possible with retail and how and how that game has changed in the industry in the last even five years. So let me ask a question to those of you who still give commission split increases or raise stylist prices based on pre booking and or retail, I want to throw a scenario at you. So let's say there's a stylist who was doing 60 grand a year in services and that made them eligible for a 35% commission. Great. I love it. Let's say now one year later, this is a stylist who's doing really well, marketing themselves really well. One year later they're doing 80 grand a year. But they don't pre book and they don't sell any retail. So you're telling me that person has increased their service revenue by $20,000 and just like screw them. Too bad they can't make any more money. They don't make any more commissions. They can't raise their prices because they don't sell retail and they don't pre book. So they've increased their revenue by 30% year over year. And you're saying not good enough. That loses me a little bit. Actually loses me a lot. Okay, next number three, annual price increases. These can be very dangerous. Very, very dangerous. And I will say I don't see a lot of business coaches coaching to this. I think it's just more old school ideology that we haven't fully grown out of yet. We coach to pricing being based on seven very specific factors. And the way we look at those relationships of those factors is called dynamic. So if you've ever seen our pricing calculator, we had to have it professionally engineered because we don't just look at your timing or your demand or your new guest requests or your schedule or your service timing, like how long it takes you. We don't look at any one of those things. We look at all of them. And the way our calculator and the way that we look at pricing works is if your demand goes down but you become more efficient, your pricing actually might increase even if your demand is down. There's an efficiency factor. And so the way our calculator works is it looks at the relationship of all seven of those factors, not any one individually. And based on the dynamic between those seven things, we can price you perfectly for rapid growth. It works 100% of the time, every single time. Now, if somebody doesn't use the calculator and does their prices however they want to. Now I can't guarantee results, but if you use the tool, I know it works. We've coached to it for over a decade. I know it's a slam dunk every single time. When you do an annual price increase based on nothing except the turn of the calendar, it can be business doomsday. I want you to think about it. If you have a stylist who's struggling to build charging $60 for a root touch up, do you seriously think raising their prices to 65 is going to help them or hurt them? It's going to hurt them. Everybody in the room should have said hurt them. That's not going to put them at an advantage. Nobody was even willing to pay 60 and now they got to pay 65. But I understand, like, you as the owner are like, yeah, but my operations costs are going up. What am I supposed to do? This kind of goes back to what we talked about last week. But in an inverse, we cannot treat low revenue producers and high revenue producers the same. We cannot. And when you look at other industries, they don't do it like that. But for some reason in ours, it's like, all for one, one for all. Like, we're doing a price increase for everybody. I don't know why we still think that way. I think it's just old habit creeping back up. Very dangerous behavior. Even going back to my last point, when there are coaching models where stylists can only raise prices when they, let's say, hit these specific metrics of selling retail or pre booking or whatever. Sometimes you have high producers way overdue for an increase. And usually they know when they're overdue too, which only hurts the owner and the stylist. Like, nobody's winning in that scenario where a high producer is stuck and can't grow. Right? Everybody's losing versus when you have this newer team member who's trying really hard but is not growing as quickly as maybe somebody else. Now they're forced into a price increase because overhead is increased and the pressure is building and the owner doesn't know what to do. It's an emotional decision. It's not a rational decision. So I'm not a fan of that one either. Number four, cancellation policies and deposits to protect your time. So these are somehow still trending. We saw a real big push to cancellation policies from 2020 to 2023. And not just cancellation policies, deposits, credit card required to book, all of these things trended 2021 to 2023. So during that period of time, we were in a season of artificial inflation. It was not real life. Data shows that the industry lost. Our industry, sorry, hair stylists and barbers specifically. Let me get real specific. We lost 300,000 hair stylists and barbers from 2020 to 2023. In three years, we lost one third of our workforce as reported by the Bureau of Labor and Statistics. Okay, that's huge. And so what happened was there was this surplus of clients that was looking for places to go to. I want you to ask yourself, this was your salon doing super well from 2021 to 2023? I bet it was. I bet it was. That was a glory day period of time. We will, if we ever see it again, It'll be maybe 15, 20 years. Down the road, it's not on the horizon. That was a real magical time. But that artificial demand has waned and so things are different. And you've probably noticed in the last year or so, you're like, man, things have gotten a little harder. Things have gotten back to reality. But a lot of us got real comfy, cozy for that period of time where there was this inflation because damned if it didn't feel good. It felt so good. We loved it, right? So what we did was when there was this massive demand, we put in all these layers to our business that don't really fit anymore. So there was a lot of coaches talking about extremely firm cancellation policies. I've seen some quoting, you know, $75 per service canceled. I've seen 50% deposits. Like you have to pay 50% of your service value today. I've seen a hundred percent deposits and cancellation fees and then tied in with a. And you have to give me your credit card right now. Let me ask you this. So let's say I had an offer on my website. This doesn't exist. You can go looking for it. It won't be there. Let's say I had an offer on my website where you could book a one hour coaching call with me and the rate was $2,000. My rate's actually different than that. I only do annual. But let's say that you could do a one hour coaching call with me and it's 2,000 bucks. So it's a big investment, but you really want to do it. And I have a policy there that says you have to put your credit card down. I also require a 50% deposit. And if you cancel this for any reason with less than 48 hours notice, I keep your $2,000. You get nothing and I owe you nothing. How nervous would you be to put down your credit card, pay the deposit and agree that if something comes up and you can't do it, I get to keep your money, no questions asked. Some of you might still do it. And you'd be like, even if I was on my last breath, I would show up to that coaching call. Absolutely. That probably represents 5% of those who would even consider the offer. And the other 95% are going to have some real fears around it because it feels like a huge investment, a huge commitment. And what if life happens? It's feeling really big, I still want to do it. I'm going to come back around to it. When you have very strong credit card requirements, deposits, cancellation fees, you give those who are considering working with you a moment of pause where they say this feels scary. I don't know if I should do it. You don't want those who are considering coming into your salon having that moment of pause. That's how your demand decreases. The harder you make it with forms and deposits and credit cards and cancellation fees and hoops to jump through for me to just come in and get my roots done, the more likely I am going to go see somebody else. And for those of you who are like Brit, I would still do it. I would put down the credit card, I'd pay the 50% deposit, and if I couldn't make it to you, you can keep my $2,000. You are the ones where I've made it so desirable to work with me that you would do anything to make it happen. And that's actually where this story ends up. The way to get people to value your time more, the way to protect your time, the way to make sure you have less no shows and cancellations, is to make coming in to see you so damn good that they would never think about canceling the appointment. Have you ever had something on your books that you were so excited for that, like no matter what would happen, you were going to do it? So, for example, I decided in the last year I wanted to get the third hole in my ear pierced. I had devils. I wanted that triple. And I put the booking on the calendar. It was about two months out. There was a really specific piercer I wanted to see. There was nothing that could have happened that would have made me go to that appointment. And by the way, it was expensive, really expensive. I paid almost a thousand dollars for this piercer. So trust me when I say this was like a huge investment, a huge deal. Guess what? I did not have to put a deposit down. Because this guy knows if you book with him, he's hard enough to get in with. He's a big enough deal. There is so much trust. The quality of his work is so good. If you book the appoint and you're showing up, I don't think he has a high no show rate, actually. I know he's not struggling at all because the desire to work with him is so damn good. And I could have gotten my ears pierced for probably a hundred bucks or something like that, or 200 bucks, call it whatever. And I paid three or four times more because of what I knew I was going to get. On the flip side, and I have zero regrets in doing it, he had created the demand to come in to see him and the desire to work with him so strong that I wouldn't have thought I would have felt disrespectful to cancel on him. To be totally honest, I had never met this person before. That's how people should feel. So it's not about making it harder or scarier or more policies to come in to work with you. It's creating more desire. Desire is the key. Not policies and deposits and money and credit cards. Not punitive, celebratory, flip the script. Last but not least, I actually have like a pit in my stomach saying this one because it's something I have felt for a long time and have never openly said it. And again, this is coming from a place of just have eyes and ears wide open. If a coach leans into the importance of retail and they happen to be networked with a retail company or brand, maybe an orange flag you have to think through, is there an ulterior motive to this push that's taking place? I want to share with you why. So I know that in the last year or so I've raised some concerns about retail. Again, I'll say it for the hundredth time. I think retail is still important to have in the industry. What has become challenging is big retail companies are not stupid and they know consumers now like to buy things online. And speed and ease is critical. And so once salon exclusive brands, like when I was in the salon, we sold only salonic exclusive brands. You could not get the products we sold anywhere else. You couldn't order them online. You couldn't go to a Sephora or an Ulta and find them. If you wanted them, you had to come to us. That was 15 years ago or something like that. Like, it's not how retail works anymore. So now to be selling retail in the salon, there does have to be stronger strategy. And I coach to what all the other coaches too. You don't sell, you educate. Like, yeah, yeah, yeah, we know all that kind of stuff. And there are things that we can do in the salon to strengthen our retail program. I have a whole training on that. Again, I'm a big proponent of retail. What I'm not a proponent of is it's fascinating to me when there is this expectation for salons to prioritize retail the same way they did 15 years ago when the program and the opportunity is simply not the same. I want to share with you some numbers because there is a very specific piece of retail sales that I don't think most salons are considering. I ran some numbers and I used a professionally engineered tool Because I'm not mathy. So I didn't want to have to make it up. I used a professional tool to do this. Let's give you a scenario, and I want to share with you the reality of what a retail sales program looks like. Let's say a salon invests $500 to stock their shelves, and they use a 100% markup. So they buy it for 500, they sell it for 1,000. What I wanted to know is how many sales cycles would it take for that salon to profit $1,000? How many sales cycles would it take for the salon to take home $1,000 if the salon is paying out 10% commission? So let me tell you what a sales cycle is. A sales cycle is the salon invests $500 into a retail line. Please don't forget the salon is now $500 in debt, which that first debt piece is almost always forgotten in the cancellation. So you start off this retail relationship in debt. Can't forget that. So you're $500 in the hole. You've bought $500 worth of product, but you can sell them for a thousand. So you sell them for a thousand, you repay that debt, and now you have $500 positive, kind of. But you have to pay out the commission on that. Right. And depending on your commission scale, you're either paying it out on the thousand or the 500. You're either paying out 50 bucks or 100 bucks, depending on what you're doing. Right. So you're now down to either 450 or 400 bucks. And you got to restock your shelves with probably another $500 worth of inventory. Okay, so now we're not net positive again. We have another hundred dollars in debt because we did make some profit. And this 6 sales cycle continues. Right. And you're slowly, slowly starting to turn profit as you sell. But there's this cycle of buy the retail, sell as much as you can, pay the commissions, go back, buy more retail. Where's the profit? It's the cycle. Five full sales cycles mathematically need to happen on an initial $500 retail investment. 5 full sales cycles have to take place before the salon profits $1,000. So let's say that you're buying $15 bottles of of XYZ product and you're selling them for 30. So that means you're buying 33 bottles every sales cycle. The business has to sell 166 products to make $1,000. I don't think we're paying attention to the sales cycle now. That's best case scenario. Most salons end up stuck with anywhere from 25 to 35% in initial investment that cannot move. So if you're a salon, I want you to look at your retail shelves. How many products do you have on there that kind of just don't move? In Most salons about 20, 25% of the product moves really well like top, top sellers. And then you have anywhere around 40, 50% that moves okay. And then there's this bottom portion that kind of never moves. Like most retail products have a lifespan of about a year. There's an average expiration date on all retail products. Do you know this? If you flip the back you can see and a lot of stuff needs to be thrown away. To be quite candid, you keep dusting the shelves by you throwing stuff away. So just bad investments like it happens, right? So knowing that the reality is most businesses don't sell 100% of their stock. You have some dead inventory. So assuming that 25% of your inventory does not move, it takes a total of eight full sales cycles for the salon to profit $1,000. The profit can come but you have to move product at such a high volume in order to come out ahead. This is my concern is I don't hear enough people talking about this. And so yeah, like I'm going to share this and a few salon owners are going to get in my DMs. They're going to be like we love our retail program. When you look at big mega salons that are able to move $20,000 in retail every single month and they have multi six figure retail programs and they don't have dead inventory because they're, they're managing it really well. Abso freaking lutely. Like they're able to overcome some of these challenges and have more of a 4 or 5 sales cycle before the profit turns versus an 8. It is all possible. It's possible with scale, it's possible with phenomenal retail management. And it's just not as simple as buy for 10, sell for 20, you've made $10. You haven't though. And that's the piece that I think we need to have more conversations about is retail is one of the most expensive forms of business any small business owner can run. One of our benefits of being service providers is our markup and our margin can actually be relatively high. Especially when you scale and create demand and all those kind of things. You, you look at a barber, oh my gosh, the overhead that they carry is so minimal. Which is why you see in barber shops, people paying out 70% commissions because there's so much gravy left behind. And why in retail programs, 10% is generous because there's not as much gravy. I'm not saying all retail is bad. What I'm saying is when you're looking at coaching companies who lean heavy into retail, just slow down, down and think about, does this math, math for my business? Does this make sense for me? Or is this something that's benefiting a third party? I just think it's worth thinking about, particularly if you were holding pie producers back because of lack of retail sales. Is their lack of retail sales actually harming you and. Or your business? Like, who's losing in that? If there is a loser, then absolutely still. Tie it in there. I just. Just want you, again, like I said at the top of this episode, to think critically about your business, critically about the way you promote, critically about the way that you look at revenue and profit and all those kind of things, and critically about the policies and processes and booking systems you have in place and just how you can grow faster. Okay, that's it. So much love. Happy business building. I'll see you on the next one. Sam.