Are you dispensible?

If you went on holiday for 6 months what would be the state of your business when you came back? Would your salon be standing empty, stripped of all your furniture and equipment? Will your clients have deserted you or will your staff be holding your salon ransom demanding that you hand over the business to them else they will turn you over to the tax man? Does the very thought of leaving your salon alone for more than a few days send shivers down your spine?

Why would you even consider such a preposterous idea? Well, in the past I have spoken to more than one salon owner who has found it difficult to get away on decent leave for up to 3 years at a time, which has its obvious problems. I’ve also spoken to others who wish to slow down their involvement in their salon and hand the reigns over to someone else who would run it for them or perhaps even buy it. There are also situations where salon owners want to open more than one salon and can’t physically be in more than one salon at a time.

Whatever the reason, I believe that there is great benefit in creating a situation where your presence in the salon is not required 100% of the time as this means that the business itself is successful and no one person can easily make or break it, which can only be a good thing.

So, if you were to close your eyes for a moment and dream about a 6 month tropical island vacation, what would it take to ensure that your business would still be healthy when you got back?

I believe the answer lies in a combination of things…

People

The most critical factor when putting your business in someone else’s hands is trust. Make sure that you trust the person – and then make sure that every possible measure is in place to hold them accountable. This is for their own good as well as yours as it takes the personal element out of a business relationship and is not a sign that you do not trust them but rather a prudent safety measure.

Growth or maintenance?

Ultimately there should be at least one key person who is accountable to you for the business.

When leaving your business in the hands of this key person you must consider whether you want your salon to grow in your absence or whether you are happy for the current status to simply be maintained?

People have different character types. Some are able to take the (steering) wheel and simply try and maintain a course that you have set without driving off the road. Others will take the wheel, change gears, change lanes, increase or decrease their speed and look for new or alternative routes and shortcuts to their destination.

I feel that every business needs to be growing else it will eventually shrivel up as it fails to adapt to changes in the market place. If you wish to hand it over for more than 6 months you will need someone who is not afraid to plot new courses for the business without compromising the foundation that has already been built.  If someone merely sits in the driver’s seat and hopes for the best they will eventually run the business into the ground.

People that are good at growing a business are people who would most likely end up opening their own business due to their entrepreneurial nature whereas people who would simply maintain a business are your “vice-captains” who are very good support players but not quite as dynamic.

Management style

Whoever is in the position of managing the salon on a day to day basis should have the ability to get along with the staff without being “too friendly” so that they are not a pushover for staff members to do whatever they want but they must also not be too militant thus alienating themselves.

Sometimes people are brought in as outsiders of the salon industry with much formal business experience but little industry knowledge. Their lack of hairdressing knowledge puts them at a disadvantage because hairdressers know the subtle ins and outs of the trade better than they do.

On the other hand someone who is a hairdresser by trade may be given the position of managing the salon and find that the more complex business processes are difficult for them to handle.

Changes in staff

Ideally you want to have as little hiring and firing going on while you are away as this creates a feeling of instability and demotivates other staff members.  This requires keeping a harmonious work environment without compromising discipline and standards.

Replacing your turnover

One of the biggest problems with an owner being away for any length of time is whether there will be a significant loss of revenue. A very careful strategy must be in place to ensure that your very loyal clients do not disappear when you do.

Incentives

An important question to answer with regard to putting your salon in the hands of someone else is why should they look after it as if it were their own? Again this is determined by the nature of the person themselves.

For example, for some the idea of shares in a business is not necessarily appealing as shares do not always equate to more money each month. They may perhaps respond to direct financial reward rather than the promise of some greater return in the distant future.

I like the idea of some sort of profit share as it means that it is in the best interests of the relevant person to keep revenue as high as possible but also to ensure that expenses are kept to a minimum and thus curb unnecessary spending.

Information

A critical requirement when getting out of the driver’s seat is the ability to get good information. Without this you are destined to fail. You need early warning signs if you are going off course. You need to know not only if your business is growing or shrinking but exactly why.

You need to know if you are acquiring more clients or if in fact you are losing clients. You need to know if clients are spending more or less per visit and if they are visiting more or less frequently.

You need to know not only if your revenue has increased but also if your profitability has increased. Lastly and most importantly you need to know if you have positive or negative cash flow.

The bottom line is you need to have all the necessary information at your disposal that would indicate to you if you need to intervene in the business at any point.

Policies and procedures

Policies and procedures are all the “rules” that govern how you wish to interact with clients, staff and other external parties like suppliers. These policies and procedures are born out of experience and usually originate from your own mind. Seeing as your mind will, in most cases, be accompanying you it will serve you well to write down your policies and procedures and ensure that they are readily available and clearly understood by staff members.

Administration

Administration is something that many salon owners battle with themselves. The things that I’m referring to include doing VAT returns or paying over PAYE each month and getting a set of financial statements produced by your accountant.

These are grudge functions that many salon owners choose to simply avoid. They are not very glamorous functions but are nevertheless critical. If you have these functions in order then whoever takes over from you must ensure that they are not neglected so that when you return you are not staring down the barrel of a hefty tax liability.

So too it is with supplier payments. Ensure that these things do not pile but rather get them out of the way as quickly as possible and ensure that your relationships with suppliers are not affected.

Conclusion

A healthy business should be in a position to do without its owner (at least for a 3 week holiday every year). Getting your salon into a position where this is possible has benefits for when you are there as well as it will free you up to try new ideas as the business will function more like a well-oiled machine.

However, this does not free you up as a salon owner to neglect your business. A new function you will need to get used to is reading and understanding information so that you are always in a position of power to take action when required.