Case Study: Bad Hair Day
When Lisa Carr opened BHD (Bad Hair Day) salon 16 years ago, she was armed with great technical skills, a solid clientele, and confidence. “I thought I could do better than the owner of the salon where I was currently employed,” she says. “So I opened a huge, expensive salon and spa that had something for everyone.”
Hairdresser vs. Owner: A Reality Check
While her skills were spot on, Lisa discovered pretty quickly she had a lot to learn about running a business, and recalls numerous occasions where she’d sit in the parking lot in tears before entering the salon. “I’d wake up with anxiety every day knowing I had to figure it all out, and spent a lot of time hiding in my office.”
Drowning in the day-to-day, Lisa was working 9am to 9pm behind the chair, doing her own bookkeeping and payroll—paying everyone but herself.
“In order to stay open, I didn’t take a salary—I thought it would be temporary or I’d at least pay myself commission,” she says.
But her paycheck didn’t happen in any form for years. Lisa was spinning on a hamster wheel and couldn’t get off.
Getting Help
To pay off debt and run her business more efficiently, Lisa decided it was time to focus her services on hair only and downsized into a 1,500-square-foot building. She also hired a coach to help her get a handle on becoming a stronger leader, and things started to change for the better.
She also took another big step and started to spend more time working on her business and less time working in it. “I stopped working Tuesdays for four hours at the end of the day,” she says. “It was scary, but I kept building up more time working on business strategies, and after two years, got out from behind the chair completely.”
Lisa’s coach insisted she start taking a salary, so she started small by paying herself a very small salary. The business became debt free (including removing her husband’s airplane they put up for collateral), BHD started to build a reputation of being one of the best salons in town, and the salon was even named a JPMS Top 15 producing salon in North America.
While sales were great, Lisa still knew there was a next level, and it meant really addressing the finance function of her business. Diving deep into her money issues, Lisa realized she had come a long way, but she still didn’t fully understand the financials.
“I had imposter syndrome,” she says. “Everyone viewed us as so successful, but I knew we could be doing better. I was not planning for profit or being proactive with money and I was tired of hiding my lack of understanding around finance,” she says.
Getting Help
To pay off debt and run her business more efficiently, Lisa decided it was time to focus her services on hair only and downsized into a 1,500-square-foot building. She also hired a coach to help her get a handle on becoming a stronger leader, and things started to change for the better.
She also took another big step and started to spend more time working on her business and less time working in it. “I stopped working Tuesdays for four hours at the end of the day,” she says. “It was scary, but I kept building up more time working on business strategies, and after two years, got out from behind the chair completely.”
Lisa’s coach insisted she start taking a salary, so she started small by paying herself a very small salary. The business became debt free (including removing her husband’s airplane they put up for collateral), BHD started to build a reputation of being one of the best salons in town, and the salon was even named a JPMS Top 15 producing salon in North America.
While sales were great, Lisa still knew there was a next level, and it meant really addressing the finance function of her business. Diving deep into her money issues, Lisa realized she had come a long way, but she still didn’t fully understand the financials.
“I had imposter syndrome,” she says. “Everyone viewed us as so successful, but I knew we could be doing better. I was not planning for profit or being proactive with money and I was tired of hiding my lack of understanding around finance,” she says.
Enter Qnity
While Lisa’s business coach helped her get her culture and leadership on track, she still was barely paying herself. The entire time she owned BHD, Lisa recognizes she’d been resisting addressing the finance function of her business, but it all came to a head about a year ago. “I’m ashamed to admit it, but I couldn’t pay myself for three paychecks,” she says. “If I didn’t have my husband’s income, what would I have done? That was a big turning point for me.”
On a mission to change, Lisa found out about Qnity attending a JPMS Top Customer event in Hawaii and was able to use JPMS rewards to fund it. She signed up to work with a Qnity Guide virtually through Qnity in Action.
In the past year, working with a Qnity Guide to implement the Qnity system and tools and attending Qnity’s MONEY SBO Workshop, Lisa and BHD achieved:
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- 22% total revenue growth
- An 84% increase in owner salary
- ·Over 10% decrease in operating expenses
- Almost 100% execution from the BHD leadership team
Lisa was able to increase her salary from $38k to $70k. She also shared these numbers with her leadership team, and they bought in and helped to execute the Qnity strategies.
“When I established leadership roles and got my management team involved in the finance component, they became much more aware of costs,” she says. “I took one of my directors with me to the MONEY SBO workshop, which I was terrified to do because you had to bring your P&L. When she saw my salary she couldn’t believe how low it was. Now the leadership team understands the repercussions when I tell them not to waste color or save in other areas. I encourage all owners to share numbers with their managers—transparency is so important.”
Driving Sales Growth
While Lisa started to get confidence managing the bottom line, she also gained fresh Qnity tools to drive sales. “Part of these results are made possible by the revenue growth we’ve seen using Qnity’s sales tracking system.”
Lisa says her team is tracking numbers with more purpose now that she has whittled down their metrics to a few key areas. “We used to have them track six to eight metrics, and the team found them overwhelming, especially the percentages—they don’t know how to move those numbers, but they do understand how to move client count and dollar signs.”
Qnity provided a simple tracking system around average ticket and client count, a great place to start with those fearful of money. The new tracking system also gave Lisa the ability to celebrate everyone’s strengths.
“We have some stylists who are phenomenal at add-on services, and others who are great retailers–this system works for everyone,” she says. And every Tuesday morning, Lisa offers gold stars to team members who hit 17 percent growth in any area.
“Weekly celebrations have been a propeller,” she says. “We used to only celebrate level jumps, which happen every few months, but now we are acknowledging all the little steps they take to get there.”
The Future Looks Bright
Now that she is more organized and proactive with the finance function of her business, Lisa feels like she has stepped off the hamster wheel and is more focused. In addition to growing, she has been able to decrease her operating expenses by 10% with tools from Qnity.
“I love how Qnity broke the numbers down for me,” she says. “I can pull out my MONEY SBO workbook and everything is so simple–there’s a formula for everything.”
She has even been able to start transferring 1 percent of revenue every week into savings. It’s a small amount, but she’s excited to keep growing her salon’s nest egg. But most importantly, she’s pre-planning her money so there are no surprises.
“Instead of getting overwhelmed by the size of the budget, we take it in bite sizes and hold each other accountable to execute every plan we make.”
Lisa’s next step is to grow their productivity as it relates to her square footage and move her Director of Operations, who is currently part-time, to a full-time schedule.
“When tackling your money issues, you have to lose your fear,” she says. “And know it’s going to be hard to reach out for help. But if you get the right financial guide you’ll see results almost immediately.”
The Future Looks Bright
Now that she is more organized and proactive with the finance function of her business, Lisa feels like she has stepped off the hamster wheel and is more focused. In addition to growing, she has been able to decrease her operating expenses by 10% with tools from Qnity.
“I love how Qnity broke the numbers down for me,” she says. “I can pull out my MONEY SBO workbook and everything is so simple–there’s a formula for everything.”
She has even been able to start transferring 1 percent of revenue every week into savings. It’s a small amount, but she’s excited to keep growing her salon’s nest egg. But most importantly, she’s pre-planning her money so there are no surprises.
“Instead of getting overwhelmed by the size of the budget, we take it in bite sizes and hold each other accountable to execute every plan we make.”
Lisa’s next step is to grow their productivity as it relates to her square footage and move her Director of Operations, who is currently part-time, to a full-time schedule.
“When tackling your money issues, you have to lose your fear,” she says. “And know it’s going to be hard to reach out for help. But if you get the right financial guide you’ll see results almost immediately.”