Oh my gosh… my mind is like ‘whoosh.’ This is amazing. Even seeing these numbers and seeing what’s going to happen … I’m very goal-oriented so this is adding to the goals.” - Fiorella, pro stylist and GlossGenius Educator
When Eli Halliwell, CEO of Hairstory, started working at Bumble and bumble years ago, he came equipped with an undergraduate degree from Princeton and an MBA from Stanford, but he knew nothing about the business of hair. He quickly learned that many salon owners and hairdressers didn’t know much about the business of hair and hairdressing either – and most were making far less money than they should.
The founder of Bumble and Bumble, Michael Gordon, had already pitched Estée Lauder management the idea of creating a university for hairdressing (codename: the Harvard of Hair). Eli contributed the idea for an intensive business school for hairdressers, and Bb. U was born. Thousands of salon owners and managers were eventually trained to be better business people and make more money in the salon.
Years later, when Eli and Michael teamed up again to found Hairstory, the industry had been turned on its head. Accelerated by the Great Recession, technological innovations like social media and smartphones had changed the status quo of the salon world, and more hairdressers were choosing to work for themselves.
Eli saw the opportunity to create the next level of business education for those hairdressers by leveraging data from a salon scheduling app like GlossGenius to help them understand exactly how to maximize their earning potential. He created the five business fundamentals and searched for a technology partner to team up with. The team at GlossGenius, the number-one salon scheduling software, recognized the value and agreed to form a partnership to help all hairdressers understand their performance, enable them to raise prices, save time in the salon, and earn more income.
The five business fundamentals are at once simple and complex. While the calculations behind them can be complicated, each boils down to a simple number that enables you to benchmark your performance against yourself over time, and against other hairdressers more broadly.
For a limited time, GlossGenius members who do not yet sell Hairstory products are welcome to take advantage of this coaching opportunity, limited to the first 100 who register.
Click here to pre-enroll.
Here is an introduction to each of the five business fundamentals:
Utilization measures how booked you are relative to how available you are. Many hairdressers are surprised to learn that there is such a thing as “too busy,” and that they could actually make more money by working less and charging more. Utilization is especially important in determining when to raise prices, and it is the first insight into your performance and potential.
Pro tip: GlossGenius offers a robust calendar function so you can mark the days and times you’re available and block out when you’re not. With GlossGenius Teams, you can make sure to always cater to all your clients and maximize utilization of your team members’ calendars.
Have you heard of the Harvard Business School study that proves each retained customer is 10 times more valuable than a new one? This is why retention is the most important of the five business fundamentals. Most hairdressers overestimate their retention and are surprised to learn how much room there is for improvement. Retention is key for deciding when to increase your prices and is the primary driver to increase the total value of a hairdressing business.
Pro tip: With GlossGenius, it’s incredibly easy to keep client notes that will allow you to really know each of your customers and what’s going on in their lives. Some stylists send out surveys to clients they haven’t seen in a certain period of time to entice them back into the salon.
Instagram and other social platforms have revolutionized the salon industry, enabling you to own your relationships with VIP clients and retain them when transitioning to independent practice. Social media has also become the number-one source of new salon clients, replacing street traffic and traditional advertising. Keeping an eye on recruitment is essential to understanding if you are ready to cleanse your client roster and attract target clients with whom you’re more excited to work.
Pro tip: Use GlossGenius as a marketing tool with built-in Instagram and Facebook integrations, or send out email and SMS blasts to new and existing clients in just a few taps.
Retail sales were the primary source of salon profits before the Great Recession. In the decade-plus since then, two massive shifts destroyed most retail profits and put many salons in financial jeopardy.
First, the professional product companies – like Bumble – ended salon exclusivity and made products universally available with no way for hairdressers who prescribed them to capture a fair share of profit.
Second, as hairdressers became independent, they simply stopped selling retail at the salon altogether – most found it too hard to access the lines they like and not profitable enough to justify the investment in required inventory.
As a direct result of these two massive shifts, hairdressers have lost out on nearly $1 billion in profits that should be in their bank accounts.
Pro tip: Maintain an inventory of the retail products you sell in the GlossGenius app so you can easily add them to checkout tickets after client appointments.
The fundamental that encompasses all the others, total business value, measures how much your business is worth based on projected cash flows. It uses a traditional method for valuing businesses and enables you to measure the peaks and dips in value over time. Many hairdressers are shocked to learn how much value they have created – over $1 million for some! Through regular coaching and monitoring of each of the five business fundamentals, Halliwell maintains that you can double your total business value over just a few years.
Pro tip: Keep track of your business numbers with GlossGenius reports – you can pull daily, quarterly, and year-to-date metrics. Use in conjunction with the pro tips above and see your reports and earnings improve over time.
Hairstory launched its proprietary five business fundamentals coaching program in 2020, and through its partnership with GlossGenius, coaching for all Hairstory hairdressers – with priority for those who use GlossGenius as their salon scheduling and business management software of choice – is now rolling out. The initial response has been amazing:
“I love stuff like this. I think the biggest downfall with stylists is that they don’t think this way. So I think doing this really shows people what you’re doing and what you could be making. I think it’s great.” - Skyler, hairstylist and GlossGenius Educator
“This is really cool, too, so for someone like me who wants to open my own space, I can say here are my print-offs, you can see how much I’ve grown, you can see where I’m going and that I would be a good investment.” - Katherine M., Salon Owner, Olaplex Advocate, and Educator for both GlossGenius & Malibu C
Are you ready to double your business value? Pre-enroll for a coaching session!