Maybe you have been working for someone for some time now. Maybe you have been thinking about going off on your own for years because it’s been a dream of yours, or maybe you’d been watching your client list expand and starting to feel like you were outgrowing your current situation. Maybe you’ve taken this downtime to think about whether going back to your salon or studio is really what you want to do.
Especially right now, the key to deciding if you’re ready to strike out on your own is to make sure you are prepared — and maybe even over-prepared — before you dive in.
Being a solopreneur is very rewarding, but I have to be honest: It’s a lot of work. I’m not one to sugarcoat things because I want you to know — really know — what lies ahead. This is not to deter you from becoming an owner at all. I think being in business for yourself is a beautiful thing. But there is a process to this, and I want you to be realistic about the time, money, and energy you will be putting into your business.
As a former salon owner of 11 years, I have lived through all the highs and the lows (including the last recession). I wouldn’t change it for the world. It was one of the most rewarding things I have done in my life. But now more than ever, it is incredibly important for you to understand exactly what goes into this process. So, today I’m sharing my top four misconceptions about being in business for yourself. Let’s roll.
1. Being on your own means you get to keep ALL the money.
There is a big misconception in the beauty industry, especially if you work at a commission salon, that the salon owner is raking in the big bucks.
Not so. Just a heads up, the average profit margin for salon owners is only about 8%. Margins are incredibly slim in the salon world and every dollar counts. So, if you are a stylist thinking you will make way more money on your own, do your research first. Keep in mind that all the things that were covered by your owner become your responsibility. Things like: marketing, advertising, business cards, color and supplies, coffee and snacks for your guests, retail products, website costs — the list goes on and on.
I want you to make sure you run your numbers first and account for all of your costs before you dive in. Creating a business plan with projected expenses will help you plan out each month in real dollar amounts — revenue and costs.
2. Being on your own means you have so much more time on your hands.
This may be true for some, but the majority of owners spend more time working on their business especially in service-based industries. You may think you can just go home and shut down but as an owner, your work is never done.
Yes, it is very important to set boundaries between your work and free time, and the goal is to eventually get there. But based on experience, I’d say that for the first three years of your business, you will be pretty much working around the clock. You will be working behind the chair, but also planning marketing strategies, taking care of your books, branding your business, cleaning and reorganizing. And if and when you have a team, you will need to dedicate even more time to your business.
Time management is typically a challenge for most owners. Getting smart about what you can put on autopilot helps (it’s why I’m so passionate about using Schedulicity’s scheduling and automated marketing tools), but you’re going to wind up working harder than you ever have for the business you love. Be realistic about the amount of time you will wind up spending working ON your business.
3. I’m a great people person, so leading people will be a piece of cake.
This. Leading, actually leading, is probably one of the hardest things you will ever have to do in your business.
If you have a great brand and are appealing to others in your industry, whether they’re stylists or barbers or massage therapists, you may not have a hard time attracting new talent. But when it comes to keeping them, that is another story.
Strong systems and leadership are the foundation of your business. And it’s not easy. Leaders are forward-thinkers. They’re always looking down the road. They understand that telling people what to do and showing people how to do things are totally different. They coach their team and hold them accountable. They have standards for their business, and they stay true to them.
Being a leader takes a lot of time and dedication. It takes team meetings each month, monthly coaching sessions, and providing constant education and inspiration to the people that work with you. The biggest challenge in our industries is not finding talent but not being able to keep them. You’ll find them with great branding and fantastic business culture, but strong leadership is how you keep them.
#4. I know how to hustle, so I can open my business with a little working capital or on-hand cash. I’ll figure it out.
This is a big one. So many owners I coach or talk to tell me they had no idea how much money it would cost to start a business. There are a lot of areas to cover when it comes to the startup expenses Do you need a lot of renovations? Do you have a “vanilla shell” —meaning you have to add in all the plumbing, electrical, put up walls — or do you just have to take care of cosmetic details in your new space? The cost difference can be huge. I mean, you can spend anywhere from $50K to $150K on a new space. And I want you to understand this: If your contractor tells you your renovation will be $50K, you must be prepared to spend at least 20% more than that quote. And that is being very conservative.
Then, let’s talk about purchasing products, your salon furniture, computer, point of sale system, payroll if you hire a team, and so much more. Plus, let’s not forget you want to have at least 3-6 months of your monthly expenses put aside for a rainy day. This emergency fund is non-negotiable in my opinion. You want to be prepared for anything and make sure you start off on the right foot.
Now, while most of us have more downtime than we ever needed or wanted, is the time to do all this brainstorming, planning, and goal setting. I’m telling you these misconceptions so you can get ahead of them and really figure out what you’ll need to go it alone. Whether you find that you’re ready to start your business right now or that you’ll need another year or two to set aside that emergency fund or find the ideal space in your price range, you’ll go into it with eyes wide open — and hopefully with a detailed and solid business plan, too. And you’ll be set up for lasting success.