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Thriving Stylist Podcast
#445 - Salons Are Closing at Scale...Here's Why and How to Prevent It
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What if I told you that some of the most profitable salons in the country right now are also the ones paying their stylists the highest commissions? While a lot of employee based salon owners are watching their margins shrink and their best stylists walk, there are thousands of salons on the other side of this generating half a million dollars or multi seven figures in annual revenue, getting 300 plus stylist applications every single year, and fielding over 1,000 new guest requests as a team. All while giving their team full staff, schedule flexibility and commissions of up to 70%. The difference isn't location, it's not market size. It's how the salon is structured at the next level. Salon workshop, my three day online training running July 13th through the 15th. I'm going to show you how exactly to build that structure in your salon. You're going to walk away knowing how to grow revenue by 20% or more, how to offer uncapped commissions while guaranteeing your own profit every single month, and how to become the salon that the best stylists in your market are fighting to get into. This is a paid experience. Spots are going fast. Get registered now@thrivingstylist.com NextLevelSalon that's thrivingstylist.com NextLevelSilon
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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
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base and want some stability.
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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, this is
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the Thriving Stylist podcast. What is up? And welcome back to the Thriving Stylist Podcast. I'm your host Burt Siva and today we're talking about something that's a little bit challenging. We're talking about the unfortunate trend of salon closures that is happening at scale at salons coast to coast. It's an uncomfortable topic, but I think avoiding talking about it is not going to do anybody any favors. And so instead I want to talk about why it's happening and how it's happening and how to prevent it. So I. I first talked about this almost a month ago now. I was in San Antonio, Texas with a group of our highest performing Thriver Society members. So every year we have an annual event and it's invitation only, and it's for those who are producing and growing at the highest rate within our membership. So there was about a hundred of us there. And I did a keynote presentation and I was talking about my predictions for the industry that I haven't shared publicly. I was talking about marketing trends that are working really well. And one of the things that we talking about the economy, of course. And then the other thing I was talking about was how I have now saved. I've saved them all in my saved posts on Instagram, which is, you know, I don't know what it is. It's kind of weird. I have over 60 Instagram posts of salon closure announcements that have hit my feed just since the start of 2026. I have never seen salon owners walking away at such a rapid rate as I'm seeing right now. Something is different. Something has changed. I can name two huge name salon educators who have walked away from ownership completely in the last six months. Sometimes as these owners are walking away, they make a big announcement. Sometimes they just kind of do it quietly and hope that nobody remembers they ever were an owner. It's been interesting to see happen. And often those of us who are still in the industry are left to wonder why, you know, why did you make that choice to step away from ownership? Whether it be an established owner who's been running their salon for 15 years, or somebody whose lease is ending in five and decided it just wasn't for them. I think we need to shed light on what is happening and why it's happening and why salons are closing so fast and why it's all kind of happening right now. So the easy things to do is lay in the economy, which I know, as I just said that a lot of you are like, well, if the economy's down, that is not what's happening. And I want to be very transparent in that because I think that the longer this industry goes on being like, it's just the economy, the economy is bad, we're going to lose more good businesses who are believing in that lie. That is not at all what's happening and there is data to prove it. So I really want to go at this from that angle and kind of dig deeper. If you've been listening to these podcasts for a long time, you may or may not Remember podcast episode 263. It was my 2023 predictions episode. So it was actually released in late 2022 and it was breaking down what I thought would happen to the industry in 2023. So what I thought would start to happen three years ago and I talked about the Great Divide. The Great Divide is something I've been talking about for four years. It's now what professional economists call the K shaped economy. So when I first started talking about, there was no technical term for it. There is no K shaped economy that we can look back on. What we' stepping into economically is brand new. It's very real. And it's not just the economy is down. That's not what's happening at all. There's no data to prove that the economy is down. We're not in a recession. There's nothing that shows that the economy is down. Spending is actually up. What has happened is the economy has split into a K. And when I first started noticing the patterns in this, I called it the Great Divide because I'm not an economist and it wasn't named yet and I didn't know what to call it. And when I recorded that episode three years ago, I want to read you a quote of what I said. I said I'm not worried about the newbies at all, meaning the new people joining the industry. I'm still not worried about them. I'm worried about the OGs who are comfy and who are following outdated practices and are thinking that the trends of five years ago are still going to get them through. For those of you who have not evolved, I'm scared for you. I think that there will be mass losses. It'll happen really fast and they'll feel really blindsided by it. I haven't read that out loud yet. I wrote it down because I wanted to talk about in this podcast. I have chills saying it. It's almost upsetting to me that I said that three years ago because now it feels like we're watching it play out in real time. And it's so unfortunate. I didn't say it with pride three years ago and I don't say it with pride now. I say it with like grave disappointment that some of our longest standing industry leaders didn't evolve and now they're getting like eaten alive by the industry and it feels very blindside. And we're blaming you know, we're blaming Gen Z, we're blaming the schools, we're blaming social media, we're blaming the economy. The call is coming from inside the house. And this is the great divide in real time. The great divide, I think was more obvious with stylists. Stylists were seeing this lack of demand, but because a lot of salon owners were still blaming the stylists, they didn't realize the truth of what was happening. They said, you know, stylists are getting lazy or Gen Z doesn't want to market themselves. Gen Z doesn't want to work. Gen Z just wants to be part time. And we blamed this lack of clientele on the stylist. That is not whatever was happening. And I want to share some of the recent messages, DMS community shares that have crossed my desk in the last few weeks. Talked to one salon owner privately who came to me basically in dire straits. This is somebody that I'm now going to coach one on one who said for the first time in 15 years in ownership, I struggled to make payroll this last go around here. And she was like, I never thought I'd be the owner in that position. It's shocking to me and I'm scared and I don't want to stay in this position. And this is the year it has to all change. That was like the point for her where she was like, whoa, something is definitely different. And I got to turn it around now before it gets weirder. We had another salon owner share that she just lost her seventh high performer to go open a new salon. So she has a large scale salon. Seven of her high performers have gone off to open seven new salons over a period of years. Not all at once, but she is basically the breaking point of I am not interested in losing high performers anymore. I want to stop bleed. And this is, this is happening at scale. And that's an interesting dichotomy, isn't it? I'm doing this podcast talking about how salons are closing at scale and yet we still have new salons opening, high performing stylists jumping in the arena. There is a real shakeup happening in the industry. On the flip side, we had a public community share. If you're in thriving leadership, you'll actually see both of these in your community. We have a salon owner who said that for the first time ever in 2026, her salon is averaging 21% profit margin. This is a salon doing over half a million dollars in revenue and she is, the owner is taking home a 21% profit margin. So you can see that as an owner, she is taking home over six figures in profit, has nothing to do with the services she's doing behind the chair. That's pretty phenomenal stuff. And then we have another salon owner who said, I just checked out our year to date sales, and our team of five has had a 42% increase in revenue in just the first six months of this year. Meaning they are pacing to do 42% more in 2026 than they did in 2025. So if you're a salon that is not increasing in profit and is not increasing in clientele and revenue, it's not because of the economy. It's because your salon hasn't evolved. And now we're faced with the consequences of those actions. But. And it's unfortunate and uncomfortable. If you're a salon who's struggling right now, it is not the economy that is breaking your business. It's that the economy that was inflated, very publicly inflated. It's not even a secret that it was the economy that was deeply inflated between 2020 and 2023 into 2024 is gone. That inflation was carrying you through. Now we're getting back to normal. And you did not adjust your model during that time to keep up when the industry was in a season of deep pivot. And here we are. That being said, I'm not blaming anybody. It was a really confusing time because that artificial inflation felt really good. And I know that it did. And it was nice after fighting for years to build a great business, to feel like you'd finally done it and it was like. Like the fruits of your labor were paying off and everything was good. I understand. This is genuinely one of the hardest seasons to own a salon that I've ever seen. That's very real. You're not imagining it. I don't want to minimize it, but I don't want you believing that any of this is happening to you, that it's external, that stylists are just lazy, that the new generation just can't work as hard as we did. I'm going to say it one more time. The call is coming from inside the house. If your salon is struggling, it is a huge key indicator that there's a failure to adapt. If you're having a hard time hiring assistants, if you're having a hard time hiring stylists, if you are losing high performers, if stylist performance is kind of stagnating, if you're noticing a decrease in clientele demand, it is a problem with your model. I promise that it is because not everybody is struggling right now, but those who are seem to be struggling quite deeply. And this is the chance to turn it all around. Now let's talk about small business as a whole because there are some, some facts that aren't so great. Business distress is elevated. Small business bankruptcy hit its highest quarterly level since 2014 in Q3 of 2025. So we are seeing a surge in small business bankruptcies that we hadn't seen in a decade. ESS Zippy is reporting that 82% of business failures trace back to cash flow problems. So when you look at the small businesses that in the last year have closed due to bankruptcy or foreclosure, or the salon owner walking away or abandoning an LLC or selling the business or whatever, 82% report that the reason they had to do that was cash flow problems. So there is a real pressure on small business. Like cash is not flowing as loose and free as it was, you know, prior to 2023. That is absolutely fact. However, it doesn't mean that consumer spending is down. Consumer spending is actually not down. When you look at consumer spending as a whole, consumer spending is actually up. I shared a really interesting graphic about the K shaped economy in that presentation I gave to those who were at the retreat, the in person event that we hosted. And it was really interesting to see all of the data charted out. So what we were able to look at through this presentation was that y there was a sector of the consumer economy that was spending less. It's the lower half of a K. I want you to think of a letter K. When you think of a letter K, it's a line that goes up and down and then in the middle it forks off, right? So there is a line off the center that goes up and a line off the center that goes down. When you look at a K shaped economy, which like I said, you can't look back historically with what happens in K shaped economies, we're in something that's brand new. The lower half of the K is struggling financially. The upper half of the K is doing great. The upper half of the K is not worried about gas prices. The upper half of the K is actually spending more money. They're keeping the economy up. Actually if you look at the data, they are getting pay increases at work. Like the upper half of the K is doing great. It's the lower half of the kitchen that are having to pull back that are worried about expenses. We're seeing a pullback in that group. Now it's not a 50% split. So it's not like, well, it's the haves and the have nots. For the first time ever, that's not what it's looking like. So there's actually a good chunk of people in the upper half of that K and that's why the economy is staying up. Historically it was like the top 1%, right? The top 5%. When you look at this K shaped economy, there's a good chunk of people who are still doing just fine. When you look at the lower kids, they are the people who are more vocally saying that they're stressed and they're worried. And that is all very real. Like they are. They are definitely experiencing hardship and lack of income and they're not able to keep up with the economy and some of them are closing their businesses. That's all very real. The reason I'm talking about it in these terms is it's very important to understand not everybody is struggling. Not all of your clients are struggling. Not all markets are struggling, not all salons are struggling, not all stylists are struggling. If you are, you're in that lower part of the K and the goal is to get you up to the top because there's plenty of room up there. You have to play a different game to get there. And that's what the call to action is going to be on this one. So let's go back for a second to what salons look like in 2021. 2022. Chairs were full. New guest requests were pouring in. Retention was easy. Stylists and salons were actually putting policies on their websites that you had to apply to be a part of the business. They almost had to like Gatekeep who was coming in because requests were so high that we had to control demand. The reason why that happened is because we lost hundreds of thousands of service providers in the COVID 19 pandemic. A lot of service providers in the industry walked away. So when they walked away, clients needed to find new salon homes. It created this artificial inflation in our market from 2021 to about 2023. It was easy to hire stylists, it was easy to fill their chairs. It was easy to find clients, it was easy to raise prices. Marketing could be kind of lackluster. It all just worked and it felt great. By the way. Those were good times. People made a lot of cash during those times. Then what happened in 2024 is the market reset and rebalanced itself. A lot of stylists went to studio suites or booth rented because they were Making all that money and that's where they decided they want to go. And also as consumer spending got a little tighter in the lower half of that k, what data shows is that clients didn't stop spending money, they became more particular about where they spent it. With that, stylists didn't stop wanting to work in team based salons or stop wanting to do hair. High performers just were no longer willing to settle. And those two things happened simultaneously. So you've got these high performing stylists who say, if I'm not happy in my commission salon, I'm going to walk, I'm going to go to a studio suite, I'm in a booth, rent, it's not worth it for me. Meanwhile, clients were saying, I'm not going to go to a mediocre stylist, I'm not going to go to a flaky stylist, I'm not going to go to a stylist who doesn't know how to market themselves well. I'm going to go to the best of the best. I'm not going to go to somebody who I believe is overpriced. It needs to feel, feel worth it when I sit in their chair. So clients criteria changed, stylists, what they were looking for and what they were willing to accept changed all at once. And now salon owners are kind of left with the rubble of like, oh my gosh, I feel like so much changed so fast. And if the owner did not adapt their system forward, they are now feeling the deep pain of that because it feels like the clients are receding and the stylists are receding all at one time. So let's talk about some of the, I'm going to use the word complacency, but I don't think it was like aware complacency. I, I don't like that. I can't really look at a salon owner and be like, see, you got lazy. Like, salon ownership is so much work. So it's not laziness. It's like a lot of salon owners just didn't even realize it was happening because that artificial inflation gave them this like false sense of hope. And they knew stylists were going to suites and they knew they were going to rent booths. But there was enough going on at the salon that it didn't feel painful yet. And now it's starting to feel a little bit more shaky. So I want to talk about what some of the things salons have done that are working against them. So hopefully we can course correct the Number one thing is marketing issues. I see salons that used to be on top of go marketing dormant, let their marketing become like sloppy, messy, dated, off trend, half assed, like bad, like cookie cutter good enough. At least I'm posting something. This is what I enjoy. I have to be honest. Like when it comes to marketing, you should like it, but it's not about what you enjoy. It's about what needs to be done to attract clients and draw stylists into work work for you. Like, that's the whole point of marketing. If you enjoy it, it's a bonus. And the more you understand marketing and the more effective it is, the more enjoyable it becomes. It's kind of like a byproduct of doing marketing well. But I watched a lot of salon owners like fall into almost like tick tock trend marketing on Instagram, making funny posts and posting like sloppy content or outsourcing marketing to these agencies who have no idea what they're doing. It's actually like laughable. The content that's being posted. It's, it's so bad and not laughable that it's funny, like laughable that salon owners are paying for it just to get it off their plate. Even though at the same time they're noticing a lack of clients and they're noticing stylists leave and they're noticing that the quality of applicants is going down. Like, how can we do that? What are we thinking? You know what I mean? The other thing that I think got a little complacent was hard conversations. Everybody was making enough money for a good long time there that it was like, well, you know, we could let some bad behavior kind of, we could turn a blind eye to it. Or Silas, who were unhappy with what was going on in the salon would be like, yeah, but the money's good, so I'm just going to kind of keep my mouth shut. And then as clients recede and things start to get dicey, it's like, well, the problems that before were kind of solved by money are just now left to be these like gaping problems kind of tying back into marketing. Salon branding. There's a lot of salons who are working off of very dated branding right now. Branding is not just like colors, logos, fonts. Branding has to move people. My chief of marketing and creative just let me know we had our mid year review and she was like, we are about to go into a rebrand and I would have to ask her. I think we've had six rebrands in the last like eight years. Like it's wild how often we rebrand. And it's not because we get bored board. It's because it's the only way to stay relevant. And I'm looking at a lot of salons who got a little stagnant with their branding, stagnant with their messaging, stagnant with their approach, with their vibe, with their look. And clients notice that. Like, if you don't notice it, you're just kind of getting left behind because clients see it really obviously and really quickly. That's a big one. And I think it's a blind spot. A lot of owners who don't realize they're working with a stale brand. Another thing is that compensation stopped being competitive. Salon owners were kind of like shaking their heads as stylists went into suites or to rent, but didn't slow down to say, what is happening here in the last 10 years. It's almost like salon owners just kind of accepted the fact that stylists would one day want to graduate to being independent. When I joined the industry 20 years ago, that was not the expectation. Like something in the last decade. Salon is like, well, that's just what they want to do now. If we were to stop and say, that's so weird that we cannot create opportunities in teen style salons, employee based salons, where stylists don't have to go off and be independent to have the things they want, you wouldn't lose good people and salons wouldn't have to close their doors. But instead of slowing down and being like, huh, that's so odd. Like, why should my high performer leave me and make more money? Why would that ever be true? But it is. If you get to the core issue of that truth, you stop losing high performers. It does not have to be that way. And the salon can be happier and the stylist can be happier and everybody can win. But I do think the biggest mistake of all, and I know we've talked about this on the podcast for sure, is that for almost 18 months, our industry, like turned on itself and there was all of these posts and man, if they weren't made by both styling and salon owners, talking about how we as an industry are so victimized and our taxes are too high and our clients won't pay enough, and how dare people complain about our prices. And don't they know how hard it is? It was such. It was coming from a place of raw emotion. And I fully understand, like, deep frustration. We're an industry that's had to work really hard for a really Long time. And it just did not do us any favors. Anybody who has a small business has to pay taxes. And so when we're going on there being like, and you wouldn't believe the taxes, it's like, do you think that clients don't pay taxes? Like, do you, do you, do we not think that everybody is annoyed by taxes? Like, it just made us look a little ignorant and silly and unprofessional. It didn't, like, bolster our case that we should be able to raise our prices. It was like a super hot take that didn't land well. Like, I've talked to friends and family about it who have seen it, and they're like, that was so weird. They're like, I hope you didn't coach to that. And I was like, oh, my gosh, no. Like, like, it didn't land well with clients. It wasn't the slay, I think that some people in the industry were going for cost of goods, price increases, going on and telling clients, if you don't like our prices, then don't pay. They said, okay, then we'll go somewhere else where we feel appreciated. And it's not that clients weren't willing to pay the money. Consumer spending in the beauty sector is not down. If clients are not spending the money with you, they are spending it with somebody else. I have story after story after story after story of stylists and salons making more money right now than ever before. Service revenue totals I have never in my life seen running so much money through their businesses. It's un. It's astronomical, actually. Because what has happened is the strongest business, the strongest stylists are seeing a demand I have never seen before. Stronger than 2021, stronger than 2022, stronger than 2023. 3. Because it's actually not based on inflation. It's based on consumer choice. It's real. It's not fake. It's not an economic bloop. This is legit. And that's the piece I need you to understand. Stylists are leaving commission salons and making more money on their own. It's not a lie. It is true. Clients are spending more money with stylists ever before and are doing it happily because a lot of stylists have elevated the way that looks, the communication, the guest experience. And I don't mean fancier amenities, and I don't mean they're serving them alcohol, and I don't mean they're working in these luxury salon spaces. That's not even what I'm talking about. It's the way that they're taking care of clients, the way they're communicating, the way they're showing up in their branding, the way they're showing up in their marketing. What is working is so simple and if we can just get there, we can stop the bleed. And stylists and salon owners don't have to be in this state of struggle. It doesn't have to last forever. So let's talk about what the salon owners who are working their way up this k are doing. They're treating their business, their salon business like a real business, like any other small business would treat itself. They're focused deeply on profit, not just top line revenue and not just vibes. Like the profit is protected before any other decision is made. Those are the salons that I see that are doing really, really well right now. They're also hyper focused on marketing. They're not letting marketing go soft, they're not letting it go stale, they're not outsourcing it. They are deeply studying it and refining it so that every single stylist in their building is still seeing, at minimum, 10 new guest requests every single month. If you are under that threshold, there is more than likely a blip in your marketing that we would have to fix. These salons have also completely restructured their compensation to be sustainable and growth oriented. We have, I think, over 800 salon owners in thriving leadership right now. Our leadership program has never been more robust. We had people joining leadership faster than they're growing. Thriving stylist method. For the first time ever, there is a huge interest in growing as owners. And candidly, I mean, I shared it on our last podcast episode. Our compensation method can't be beat. The bonus structure that we're offering to stylists can't be beat. And the salon owners that are rolling these pieces out are seeing revenue jump like never before, are seeing client demand surge. Like they're seeing the upside of what it looks like when you run the business like a business. There's a lot of misinformation about our industry that we're so special and so unique and we have to do compensation in this super unique way and we have to, we have to create these scales and these check marks and these, these complex tracking systems. Why have we ever stopped to think, like, why are we the only industry where it's so hard to pay people? It is so bonkers. Like, there's plenty of other industries full of tradespeople, plumbers, electricians, mechanics, house painters, where the compensation isn't so wacky it's only for us. Have you ever stopped to wonder why? And then we also wonder why salon owners aren't making the money they want to make and stylists aren't making the money they want to make. And everybody hates how comp works, works. And we have the weirdest structure in the world. Like, maybe that's the reason it's, like, so simple. And maybe it's that the owner didn't slow down and design a system based around profit protection. Like, it's getting back to basics. It's not like inventing something new. It's getting back to the simplicity of what works for every other local small business that is profitable. The answer really is so simple. We're also seeing owners who are doing really well right now, not shying away from hard conversations. Hard conversations only become hard when they're delayed. Owners who are having frequent conversations and don't mince their words and are very honest are not struggling. So it's usually the owner learning those conversation skills, feeling confident in entering into them, having a structure that they can actually coach and consult to. So for owners, often they're like, well, I have this stylist and they always show up late. What should I do? And my answer is sit down and talk to them and explain that showing up late is not acceptable here. And if it's a continued pattern, then likely they won't be able to work here. And the owner was like, oh, I could never do that, or I can't afford to lose them. They're a high performer. If you're not able to have conversations about behaviors that are not working culturally in the salon, you do not have a sustainable business. That's an incredibly fragile business business model, and you don't have the systems, the structures, the confidence, and quite candidly, the team members that are going to allow you to have a successful business long term. Right? But lastly, they've adapted to how clients actually behave. Now. They're not living in this false narrative that the economy is just bad. And in a few years, clients will come back around the world that existed in, like, 20, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23. We're never going back there ever. So expecting things to come back around. We all know how quickly the world is moving forward. Right now. We're not going to go back in time. At some point, the choices are evolve forward or yikes, like, it's not good. We have to evolve. The industry is in a deep state of evolution. And pay attention to the announcements on instagram of salons closing at large. Pay attention to the post of stylists saying, After 15 years, I'm choosing to walk away from this industry, go into the Facebook groups and the public Facebook groups with tens of thousands, hundreds of thousands of members saying, this is not for me anymore. I'm too tired. The reason why this industry is getting to that place is the failure to adapt. It's not gotten harder, it's just that you have to learn the new way. And I'm not the only business coach that's teaching the new way. But I invite you to spend the next three to four to six months to 12 months just studying and understanding what is working right now. This industry is not broken in many aspects. It's working better than it ever has before. It's simply running like an actual business. And I invite you to jump in with us. The water is warm and you will absolutely love running your salon like an actual business, not like a fragile, you know, adventure. So I hope that I've given you hope as a salon owner. Opportunity lives on the other side of a change in plan and I can't wait to see how yours shakes out. So much love. Happy business building and I'll see you on the next one.