Why Salons Fail (And the One Thing That Saves Them)

We argue that salons don’t fail for lack of talent but for lack of leadership and a present operator. We break down why equity handouts and 1099 “owners” backfire, and how an operator-led, systems-first model helps people and profits grow.

• defining the operator: clear eyes, clear math, steady leadership
• why owner-absent businesses unravel over time
• the pitfalls of giving shares and golden handcuffs
• legal and cultural risks of 1099 “owners”
• lessons from Chick-fil-A’s owner-operator model
• building a farm system: select, train, develop
• systems that create safety, growth, and profit
• practical metrics that drive stylist success
• people first, profit as the byproduct

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Chapters

• 0:00 Why Leadership Beats Talent
• 1:15 Defining The Operator Mindset
• 3:11 Local Failure And Owner Absence
• 5:54 The Trap Of Making Everyone Owners
• 7:39 1099 “Owners” And Legal Limits
• 9:31 Chick-fil-A’s Owner-Operator Model
• 12:24 Selecting, Training, And Standards
• 14:35 Systems Make People Win
• 16:19 A Salon Visit That Proved The Point
• 18:19 People First, Profit Follows

Transcript

SPEAKER_01: 0:41

Today's episode is one of the most important conversations we've ever had, you guys. Because businesses don't fail from a lack of talent, they fail from a lack of leadership. And specifically, they fail when there is no strong operator. And so today we're going to talk about what an operator really is, why every salon needs one, the dangers of owner-absent businesses, and what happens when a coaching company tells you to just make everyone an owner. And this is going to be bold and it's going to help your salon win.

SPEAKER_00: 1:23

Yeah, because you know, you can have the best brand, the cutest space, the most talented team. But if no one is operating the business shrewdly, it will fall apart. And shrewdly means, you know, wisely, cleverly, in a careful way, using good judgment and thinking ahead. You know, because salons don't run on vibes, they run on systems. And the and actually the word operator means one who carries on business shrewdly. So let's pause there because that means, you know, carries on the business. They show up consistently. And shrewdly means they have clear eyes, clear math, there's no fantasy involved. So an operator isn't, you know, someone who's emotional. They don't take things personally. They see the business like a pilot sees a plane. They see the gauges, the dashboard, the weather patterns, fuel, you know, the altitude. And their job is simple. Keep everyone safe. Get everyone to the destination. Grow the business so people win. Because the best business models are designed so the most people win. Not just the owner, not just the star stylist, not just the person with the biggest personality, but everyone who participates. And before we go deeper, I want to share a story about a business locally that just shut down. You know, back in the day in like the early 2000s, there was a couple little hotspots in our town that everybody loved to go to. And they were owned by a couple of brothers, actually. And anyway, they ended up selling out part of the company to another business owner in town who had sold a business for multimillion dollars, thinking that they would get some systems in place, you know. But, you know, what happened was there were some missing components in the middle, like the operator, you know, because this business, it changed ownership over the years. They kind of slowly stepped out of it. And there wasn't ever that strong operator because eventually that one owner just bought out the other shares of the guys, and there wasn't a strong operator in place, you know. So this last one of their businesses that was still remaining open just shut down. And you know, what it what it taught me was that the owner wasn't present. There was no strong operator present that knew that they were on that mission, like we just talked about, like a pilot is. Um, you know, and really something that once had the greatest potential. You know, they were known for their loud music and spicy food, or their spicy music and loud food, which I loved that, you know, um, it it totally dissolved because the leadership disappeared. You know, and that story breaks my heart because look around your town. You know, you'll see salons or spas or restaurants or boutiques or other small businesses that don't make it. And it's rarely because they weren't talented or they weren't busy or they didn't have great people, it's because there was no one steering the ship. No one was looking at the systems, nobody was developing people, no one was carrying the mission forward. You know, leadership was absent and operations were abandoned. And what what what that does or what happens is entropy wins, chaos wins, you know, because the business doesn't close just overnight, it just slowly unravels until one day the lights all go off.

SPEAKER_01: 5:23

Man, such a good story. Thank you for sharing that, Lindsay. It's really um, really inspiring. I think a business is that same thing in my town that that exact same thing happened to. So um great story. Um, because like when you think about it, um, let's get into something that we're hearing from other salon coaching companies. Um, because right now, if you've seen it, you know exactly what I'm talking about. There are some coaching companies uh right now that are telling you just make service providers owner, you know, give them shares, make them shareholders. That sounds sexy, right? You would think so. You know, it truly is great marketing, I'll give you that. But let me ask you this question if someone is mad, wanting to leave, are not aligned with the values, and you make them an owner, you guys, do you think that makes them more aligned? Heck no, like absolutely not. You know, it actually just makes them more entitled because if their motivation is truly money and you hand them ownership, you've now created chaos in a contract. Like you've created what some people are proud to call golden handcuffs. It's like, you know, it looks like commitment, it feels like partnership, but it's actually the opposite because now they're not truly loyal. You know, they don't operate the business, they don't empower people to use the systems, and they cannot be coached. They just expect a profit check now. And at the end of the day, it truly gets worse because they're also coaching companies who are saying 1099 your people and make them owners. Have you seen that, Liz? I know you have because we talked about it. Yes, I think it's like booth rent sucks, commission sucks. I don't even know what down with the commission, down with the booth rent. Like, share your profits, everyone wins.

SPEAKER_00: 7:18

No, no, no, no, no, no, no. You know, this is like, oh man, when I see that, it's just like so shocking because this is actually the worst model of them all. Because legally, when you do something like that, you cannot enforce systems for a 1099 contractor. You know, they can come and go as they please. Uh, you cannot require any additional training, you cannot dictate the dress code, you can't require branding consistency. So now imagine this there's no rules, no standards, no agreements, no shared mission, just a group of people with ownership titles and zero accountability. That is truly a recipe for disaster. Not none of this is because people are bad, but this model, this model is bad, you know. Just because you give it a cute name, you shorten a strategy or you know, whatever you call it, it doesn't mean it's a good business model. It might be great, great marketing, you know, people are talking about it, it's creating some um volatility, some, you know, lots of people talking about it, but it's horrible operationally. And it never helps people win long term, you know, but there is a business model that everyone in our industry should be studying. And it's not another salon, it's not another coaching company, it's not a celebrity stylist. Um, you know, it's Chick-fil-A because Chick-fil-A, they don't just have owners, they have owner operators. And this is important. They don't sell people a title, they develop people for a role. You know, Chick-fil-A is very clear. Their owners are on site, their owners are in the business, their owners are in the training, the culture, the standards. They're not just collecting checks from a beach somewhere. You know, listen, this doesn't mean that you need to be working 60 hour weeks as a salon owner operator. But what they are showing us is they're working the business, they're building the people. You know, they're operators first and owners second. And that model creates a completely different result.

SPEAKER_01: 9:58

It's so good. Because if you think about it, other fast food comp um competitors that are competitors to Chick-fil-A, they will sell anyone a franchise. Like, you get a franchise, you get a franchise, like you know, Cobra's like selling franchises if if they have the money for the fee. You know, you pay the money, you get the title. You pay the money, you get the title. Like there's no filter, no leadership standard, no operator. You know, they just hope you'll figure it out. And that's why so many of these stories truly fail. You know, Chick-fil-A absolutely does the opposite. Like to own a Chick-fil-A, like you need to be selected, you need to be trained. Like most people that are Chick-fil-A owners started at the bottom, or not even the bottom, they started as cashiers or um, I don't even know what they would have there, but cashiers, janitors, whatever. And then they've worked their way to the top. Like they, because they believe that you need to be trained, you need to be developed, you need to be present, like you need to be an operator. And they truly, like, if you think about it, we did the research and they turn away thousands of applicants every year because they aren't looking for someone who just wants profit. They aren't looking for someone that just wants profit. You know, they're looking for someone who wants people to win. And then they build a system around you so that your people win, you know, and that's truly why Chick-fil-A has the highest uh revenue per store when it comes to fast food, why they have the highest retention, the most consistent guest experience, and the longest lines every single day. Even though you guys, if you remember, they're not open on Sundays, they don't sell alcohol, they don't discount food, they don't run flash shells or coupons. So if you're thinking to yourself, okay, well, how do they do it? It's very simple. It's actually they grow people. You know, Chick-fil-A has a farm system, if you think about it. Like you can literally start as that high school kid working the fryer. And if you show that heart, that hunger, that humility, humility, you know, they will begin growing you through like management, uh, leadership, culture, systems, all the way up to the opportunity to become an operator. And you do not buy a Chick-fil-A, you become a Chick-fil-A owner or operator. And this is exactly what salons need.

SPEAKER_00: 12:10

Yeah. You know, it's when you said started from the bottom, it made me think of that song started from the bottom, now we hear. And you know, I started at the front desk in our salon company. And so I love this model, not because I think that that's the only way. I think you can start out as an owner, but if you don't have that mindset, um then it's just gonna combust because not the the model that doesn't work is where everybody gets shares or everyone is an owner, or you know, 1099 people and hope that it works because they're owners now, and then golden handcuff people so that they don't leave once they get to a certain level. No, because that model is confusion, and people don't win by being given a title, because that's all for ego, that's for the show, that's not really for the dough. You know, they win by being groomed, by being coached, by being grown into a role, and you grow leaders by developing people, not by equally distributing equity. Because here's the truth the salon industry needs fewer owners and more operators. You know, we need leaders on site, people who are invested, people who know the systems, people who build culture, people who coach others, people who care more about the mission than the profit, you know, because that is how guests win. That's how team members win. And ultimately, at the end of the day, that's how the business wins because systems create safety, and safety creates growth, and growth creates profit, and it always happens in that order.

SPEAKER_01: 14:10

Lindsay, it reminds me, you know, we like to experience blowouts when we travel. And I remember the blowout at a very high-end, probably well-known um hair salon. We both went in for blowouts. And do you remember you got taken back right away? Same time, we had the same appointment time, and I waited for like 45 minutes. You could tell there was no leadership there. And then somebody comes running out the back and they're like, Oh my gosh, I didn't know you were put on my schedule at the last minute. I had just run to Sam's to collect some stuff. And then so it was like, wow, okay. But you could just you can tell, like in Chick-fil-A's, you can tell their systems being followed because they have those operators. Like we could tell in those moments, or most of the salons that we we visit to just experience a blowout, like they don't have those, you know, operators because when you think about it, like most people are just saying, just give them shares, make them owners. That's what I've been taught before in the past. And you have to think, well, Chick-fil-A doesn't do it that way. You know, they have the most successful franchise model in the entire country because they understand that ownership is responsibility, it's not entitlement. And that responsibility, again, is called the operator.

SPEAKER_00: 15:21

Yeah. You know, Jen, I think uh the what's standing out to me, or the one of the other companies that says it best is the owner of the Savannah Bananas. And he says, people come first, not profits. Because when people win, the profit follows. And, you know, this is the secret. We are so solid and what we provide that we know our people cannot earn more anywhere else. It's not because we guilt them or because we control them, it's not because we handcuff them, it's because we help them win, we help our guests win. We invest in systems that win. And a true owner or operator understands profit is a byproduct of doing the right thing. You know, when you serve people well, when you build great systems, when you create massive value, money flows. You know, that's why Zig Ziggler said, help enough people get what they want, and you'll get what you want too. And Jen, you I love when you say systems help ordinary people get extraordinary results. It's one of my favorite things that you say, Jen.

SPEAKER_01: 16:47

Thank you. Uh yeah, it's so true. If you think about it, systems help ordinary people get extraordinary results. That's why people in team-based commission salons that are run well can get to six figures in three to five years, including their training time, because it's helping just regular people get extraordinary results. So I love that. And if you're listening, you're thinking, hmm, Jen and Lindsay, like we don't have systems. Like we truly got you at the end of the day, guys, because inside of one of our programs, like we are taking beauty pros and turning them into six-figure income earners in under five years. You know, it's not by giving them shares. I promise it's not. It's not by making them 1099 owners, it's not by golden handcuffing them, it's by building their confidence, by teaching them leadership, by helping them serve guests better, by developing their sales skills, you know, by creating that culture of excellence and finally helping them see that they can only achieve all of this by working together as a team. And that's what an operator does. You know, an operator truly cares more about the people than the profit. And as a result of that, the profit comes.

SPEAKER_00: 17:56

Yeah. So if you're listening right now and you're thinking, I know I need systems. I know I need to be doing more training for the people that I care about on my team. And I know I could use some leadership. Uh, go ahead and text the word pro, P-R-O, to 469-283-5590. And we'll send you the details on how we're turning beauty pros into six-figure earners inside salons just like yours. You know, we're doing all of the work, make giving you back all of your time that you would have spent um, you know, teaching them so that they really can show up differently inside of the world, because the world needs more operators, not more owners, not more shareholders, not more golden handcuffs, but more leaders, you know, people who show up, people who carry on business shrewdly, and people who want the most people to win. And you're that person, and we're here to help. So thank you for listening to today's episode of Salon Success Secrets. Share this with a salon owner who needs encouragement or a reminder that leadership matters. And remember, businesses fail from a lack of leadership, not a lack of talent. Be the operator or have an incredible operator on your team. We'll see you next week.