Ask Me Anything - January Q and A

How are you doing? How are you feeling? How is business for you? Let's find out in my monthly Q&A. Hello, hello, hello, my salon friends. Phil Jackson here, your queen of salons, coming in your eyes and ears with a dose of wise old owl wisdom. And it's my monthly Q&A, which is my favourite session of the whole month, trying to find out and help with what's going on in your salon business. If you've got a question for me, please reach out to phil at buildyoursalon.com. You would not believe how many listeners we have versus the number of questions that I get. I'm scratching around for questions every single month and bullying people into sending a submission in. So please, ready for the February Q&A, send your questions over. Now, today, it's a bit of a different one because actually I've given over the entire episode to one question or one letter that I've received. And that's because there's so much in this letter that I think we're going to find interesting and that we can help with. But actually, I don't think we need anybody else's questions this month, which is good. But the few people that I'm not going to get to this month, I will promise to get to your questions in February. So I've had this letter. I'm calling the lady Leah because it was submitted as an anonymous letter. But when I'm talking to someone, I like to put a name to that letter. So listen to Leah's letter. I'm going to read it out and then let's see if we can unpack things and help her at all. Dear Phil, I've had my salon for almost eight years. I have a team of seven beauty specialists. Some are employed and some are self-employed. In a nutshell, we don't make any money. We used to be really successful, but now I feel like we're failing. My self-employed staff are on a 60-40 commission split, and I don't think I make any profit from having them. I have weekly meetings with them, but they never back me with offers. They don't retail and don't feel like part of the team. I have three employed girls, but they are very young. And even though I think they will make me money one day, they are building their skills and are getting busier, but really slowly. December was the worst one we've had since we opened. So we started the new year overdrawn. My husband is supportive, but I feel like he wants me to get a job. We want to move house and start a family, but I can't. What can you advise? I've signed that off, Leah. Goodness, such a lot in there. The first thing I want you to realise, Leah, is to understand and recognise how far you've come.

How successful you actually are. No matter what your current circumstances are, you've managed to steer your salon business over, was it seven years? Eight years you've been running your beauty business, and you've managed to steer that all the way through COVID, through last year's cost of living crisis, and through, as you've recognised, a terrible, terrible December. What you need to understand is that business people and entrepreneurs fail all the time. It's just how they move on from that failure and keep the faith and don't lose heart. That's what sets them apart from the norm. So you've been incredibly successful, and I wouldn't wish the last few years on any business owner, particularly around COVID and lockdown. That came as a bolt from the blue. We couldn't have prepared for it. We couldn't have put contingencies in place because nobody was expecting it. And you've navigated that. So well done. And I hope you do have a sense of pride around how far you've come and how you've built a business and how you're providing a living for a team of eight. But there are some things there, some quite fundamental things that I think need to be addressed. And the first are these self-employed staff, team members. They are not employees. Self-employed means they're not yours. They're not yours to manage. They're not yours to have weekly meetings with and try and get them to retail and take part in offers. That's really none of your business because it's their business. And I think you're treading actually quite a dangerous line. I'm assuming that you're here in the UK. There's a couple of things that you say, a couple of phrases that you use that make me think you're here in the UK. And 60-40, that 60-40 commission split, is the industry norm. And an industry norm, I think, is bloody dangerous ground because it's that accepted, received wisdom that this is the way that things ought to be done. And that doesn't mean it's going to work in every business. It may not be working for you. So 60-40 might just be something that is not tenable for you. It's also very, very dodgy ground as far as His Majesty's Revenue and Customs are concerned. Because there are a number of tests that Revenue and Customs can impose on your business to examine whether an employee is actually an employee and not a self-employed team member.

And I think you're on dangerous ground. If you're doing things like performance meetings, if you're trying to get them to take part in offers, if you're treating them as an employee, then HMRC might well turn around and say, well, no, they're employed and you owe us a whole bunch of tax and national insurance contributions. So I think if you're going to have self-employed team members, please have a look at going flat rate. So they pay you for a chair or for a room on a half day or per day, or you could do a weekly deal if you wanted to. But it means that you've got solid, reliable income coming from that self-employed person and then leave them to get on with it. If you can't, don't do it. And I will put my hand in the air and confess that I have never successfully managed a salon that has employed and self-employed people in it. I can't do it. I need to be able to steer them. I need to be able to coach them. I need to be able to encourage them to take part in those offers and to sell those retail products. I can't do that if they're self-employed. I need them to be on the payroll. I need them to be working with me on our business. So if you're not making any profits, and you really do need to get to grips with the figures in your business to understand this, but if you're not making any profit on them, just get rid. Just get rid. It will help your employed team start to get a bit busier, a bit quicker, I suspect. And it will take away that frustration that they're not performing in a way that you want. And if they're not making you any money, what have you got to lose? This is the wonderful thing that we have in our business. The only advantage we have, the only advantage as a small business, is our ability to change like that. And big businesses envy us this. I have worked with big software companies. I've worked as a consultant. Trying to get decisions out of big businesses is really, really hard. Because it needs to go through layers and layers of meetings. And once you get above a certain budget requirement, it needs to be signed off by the next tier of management. And everything is so far ahead all the time. And big business envies us our ability to make changes in our business. Because we can respond quickly to what's going on in the marketplace. And most big businesses would love to be able to do the same thing. And you can make changes, rather, in your business.

You can make alterations to the way that business goes. And guess what? If you make a change and it doesn't work, guess what you get to do next? You get to change again and again and again. As long as we're using your values and your overall life goals as that beacon to steer us, you get to change as much as you want to in your business. So make the change. Be brave. What have you got to lose? At the moment, we're not making any money anyway. You're not going to break the business model because the business model isn't working for you. I appreciate that your husband has been supportive till now. I suspect there's a conversation that needs to be had there. I think you might be guessing that he wants you to start getting a job. He might just be concerned for you. He might just be worried about the anxiety that you're carrying. I don't know how much of this picture you're sharing with him. But also bear in mind, I don't know whether your husband's got his own business or whether he's employed. But us business owners, we are the freaks in this economy. The norm is that you work for someone else, contribute to their overall life goals and then retire. So setting up your own business is unusual. And sometimes, even though we've got supportive friends, family, partners, sometimes we just need to explain what's going on. And that actually this little blip in our journey is just that and that we're going to be OK and things will be fine. And you know what you're doing and all those wonderful things, too. So it might be that there's a bit more communication needs to happen in that direction. But most of all, and this is a really interesting one for me because I saw this twice last year with one-to-one clients. I need you to fall back in love with your business. It's understandable that you have conflicted feelings. It's completely understandable that at the moment you may not be loving the business very much. But after your home and your family, I need your salon and your team to be your happy place and your favorite place to be on earth and your favorite people to hang out with. Because if not, it's going to show. I need you to be present when you're there. I need you to appreciate what you've built and your amazing clients and the people that you're providing with a living. I need you to recognize all that. Maybe even start journaling about it as well. Keep a little work journal. Start reflecting on your progress, reflecting on the amazing things that you're making happen in this world. Because if you don't fall back in love with a business, the first thing that's going to happen, and you won't even realize it's happening, but your clients will make that connection, too. They'll pick up on the fact that no one loves this place, and it doesn't take very long for them to start falling out of love with it as well.

So you've got to fall back in love with it. And I realize it's a really tricky balance, because I've always said your business is not your baby. Unless you're prepared to take that baby and drown it in a bathtub, I'm afraid your business cannot be your baby. But we do need to love it, and we do need to appreciate what it is that we're trying to do. So in a nutshell, Leah, and I hope that's been helpful to you, in a nutshell, probably four things. First is, I need you to realize that you are a success, and that this is a blip, and it is a bump in the road on a longer journey. Secondly, let's get to grips with these self-employed team members, because I don't think they're serving you well, and I think there's some clarity that you need around how they can contribute to your business. Thirdly, appreciate that you can change anything you want to in your business, but you probably need some clarity around your goals, and you certainly need to be sharing those goals with your loved ones. And finally, and most importantly, fall back in love with your business. I need you to be passionate about your upcoming success. So I hope that's been helpful to you, Leah, and I hope it's been useful and interesting to everyone else who's listening. Numbers are on the up again, so I'm very excited about the podcast for 2024. If you have a question for me, please reach out, phil at buildyoursalon.com. I love hearing from my salon owner friends. Even if you haven't got a question, let's just have a little chat and see what's going on with you. Just seven short days until I'm coming in your eyes and ears again. Next week will be another special guest episode, so lots to look forward to on that. And until then, take care. Sit down and see what's going on with the queen of salons. Hair, beauty and more successful tips for business owners. All on Build Your Salon.