My biggest hiring mistake as a solo salon owner

You are maxed out, turning clients away and thinking about hiring someone. Stop. Have a listen to this first, Build Your Salon. I want to tell you about some of the worst business decisions I have ever made. Grinding out, working every hour that I could, booked solid for weeks, wait list getting out of control. And from the outside it looked like I was absolutely smashing it. So it was time to hire and it nearly broke the business. Not because hiring was wrong, but because I was hiring for the wrong reasons at the wrong time without checking whether my business could actually support it. Cashflow dipped almost overnight. Training ate every single spare hour that we had and a few weeks later I had to let that person go and it was gut wrenching for both of us. So what did I get wrong? Well, I reacted to being busy without checking the overall health of the business beneath. I hired out of panic. And in my 127 years in the salon industry, I have seen this happen over and over again. The solo operators who are maxed out, who feel like they're letting clients down by not having available hours, then bringing someone in too soon and watching their profits disappear. And I've seen the other version too, people that wait so long that they end up burning out completely before they've ever got a chance to build a team. There's a right time and a wrong time to hire. Today we are going to go through how to tell the difference. My name's Phil Jackson, your queen of salons coming all over the internet with a dose of my Wise Owl wisdom. How on earth are you achingly well, I hope as we storm towards the middle of May, my goodness, I'm ready for the summer now. It's been a manic few weeks in my business. How's it going for you? Reach out and let me know. I'd love hearing from my salon owner friends. Anyway, so how do we know when we are actually ready to hire? Well, don't hire based on busy vibes. You're always going to be busy. You are the salon business owner. So you need to hire on the numbers and there are green lights. The green light number one is that you are consistently at 80 to 85% or above on your utilisation and your salon software can tell you this. So how much of the week is actually booked up with clients? And you need to be consistently above the 85%. And I would say that needs to be for at least three months running. So that will take you through a busy month and a quiet month. If you are over 85% busy, over 85% utilised rather on a quiet month, then it's probably time to look at hiring. That means that you're probably turning away new clients, means that your regulars are waiting more than a couple of weeks to get squeezed in and they're going to get tired of that eventually. And you are starting to maybe let service quality slip because you're feeling that you're under pressure completely. It's okay to be above that 85% utilisation for a while and in our busy months, that's absolutely what we want. But you've got a demand problem and that's a good thing. But only if green light number two, if you've already raised your prices. So before we go around adding a wage to your outgoings, what I would encourage you to do is to increase your prices by, let's be brave, somewhere between 10 and 20%. And this is a critical test. If your clients stay and your diary remains full, you've got a really strong business. If it empties out, then you have a bit of a pricing problem, not a capacity problem. And hiring's not going to fix that. So we raise our prices first and what that's going to do, hopefully, if we've got it right, is it's going to slightly artificially suppress demand. There'll be less people willing to come in for less appointments in. There'll be fewer people around. There'll be less appointments per year for some of your customers. If you raise your prices and you're still at 85% capacity after the increase then we are definitely, definitely good to go. Greenlight number three is when you are spending too much time on the wrong thing. So look at your week, but look honestly, how much time are you spending on tasks that don't make you enough money? Things like your admin, your laundry, your stock management, and responding to emails. If that's taking up more than 20% of your working week, and I don't just mean the hours that you are available for clients, I mean, look at your week as a whole, that's taking more than 20%. You are wasting money and you should be spending time on the more profitable parts of the business. Every hour that you spend doing some of those tasks instead of seeing clients is actually revenue that you are not generating. That said, it doesn't necessarily mean you need to bring in another beauty therapist or you need to bring in a hairdresser. It might mean that we need to look at outsourcing rather than hiring into the business. So it might be that we can delegate some of those tasks to people outside the business specialists, bookkeepers, admin assistants, virtual assistants, rather than actually putting somebody on the payroll. And that's going to give you a lot more flexibility as well. But if we've got all three green lights at the same time, you are ready to start having the hiring conversation. A few red flags though, a few things that indicate that you are not ready yet. And these are just as important because hiring too early will kill your cashflow. And it will and it can actually end your business being overly ambitious and hiring too quickly. So red flag number one is if your bookings are inconsistent. If you're busy some weeks, quiet others, never really above 70%, you've probably got a marketing or a pricing problem, not a capacity problem. We need to fill those gaps first. Hiring is not going to solve that inconsistency. It's just going to make it more expensive in the quiet weeks. Red flag number two is if you can't afford the full cost. So the hourly wage is just the beginning. We've got to add in your national insurance contributions, your pension contributions, the training time, the extra product that's going to be used, your higher insurance, the additional software licences, all of that is going to be adding to your fixed and variable costs. So the real cost of an employee isn't just their wage, it's usually about one and a quarter, maybe even one and a half times their wage. And that's before we even think about starting to make a profit. So before you post your job ad, make sure you've got at least three months of their full cost covered. Ideally sat in a separate bank account or a pot. If you haven't got that buffer, one quiet month is going to put you in serious trouble. So build up some reserves first. Red flag number three: everything lives in your head. So if your salon runs on vaguely organised chaos and there are no written processes for anything, i.e. how you open up, how you do your consultations, how you carry out particular services, you can't hire somebody because you are going to spend all of your time answering questions and micromanaging. That means that you need to build systems first. If you haven't got systems, it's not time to hire. It is that simple. So we talked about the numbers a little bit. Let's be brutally honest about the numbers because a lot of salon owners and solo owners in particular get a nasty shock. If you hire a part-time assistant at let's say 15 pounds an hour, add in national insurance, tax and pension, you're probably looking at 18 plus pounds an hour already. Add the time that it's going to take you to write a decent recruitment ad, do the interviews, onboard. Somebody could be 20 hours of your time if your time's worth a hundred pounds an hour, you've just spent two grand of potential earnings before they've even started. Then we've got the induction and training period. And so for the first three months, your new hire is going to need an awful lot of handholding and support. I see this too many times when people bring someone into the business, give them a set of keys and expect them to get on with it. You can't do it. They're going to need that significant support from you. But we need to recognise that every hour you spend training is an hour that you are not with a paying client. So ideally we want to get your new hire to the stage where they're generating two to three times that own cost in revenue within three months. If you can't do that, if you run the numbers and don't think you can achieve that, do not commit. And who should your first hire actually be? And here's where a lot of salon owners go wrong, because what they try and do is start to replace themselves either with a senior beauty therapist or a senior stylist. It's too expensive, it's too risky and probably not actually what you need. It could be that your best hire would be a part-time salon assistant or an apprentice or, like I've said, maybe we need to look at outsourcing first. Someone who could handle those things that don't need expertise. Maybe it's somebody you know who helps with some admin work or helps you maintain the salon, does some shampooing, sweeping up, appointment confirmation, stock management, that kind of thing. With a good assistant, you can probably do two clients in the time that it used to take you to do one or one and a half. So what we can potentially do with an assistant is increase your earning potential without you working harder and harder and harder. So you're looking for someone trainable, someone eager, someone who buys into your salon vision. What we don't want is a vague, undefined role. Also, don't hire a friend. I see this an awful lot as well because the vibe's good and you end up skipping that trial shift. Don't hire friends. Just take it from one who knows. Do a practical trial with somebody, ideally for a full day before you make an offer. But before you post your job ad, do the homework first. Document everything, all the repeatable tasks in your salon need a written process. If you don't like writing, record yourself on your phone. Do a video instead. They need to know how to open up, how to close up, how to answer the phone, how to take a payment, chuck it all in a Google Drive folder that works just fine. Ideally, of course, we'd have a wonderful employee manual, but that's going to take a long time. But the little bit of time that you can spend now is going to save you an awful lot of wasted hours later. Build that financial buffer. Three months of their full cost in a separate account, non-negotiable. And we need a proper description, job description, which specifies their exact role, their exact responsibilities, how many hours they're going to have, how much pay they're going to get. Specific specificity. Being specific is going to protect you both in the long run. Then I want you to create your 90-day onboarding plan. What does day one look like? What does week one look like? What should they have nailed by the end of month one, month two, and month three? You're going to be doing a lot of performance management. Those weekly check-ins are non-negotiable. Not too much time working on their own in the first three months. Please. Having said all of that, you have my love and admiration. Salon owners who recruit are my favourite people in the whole wide world. Honestly, we can't rely on suppliers for amazing training. We can't rely on training providers and colleges for amazing training. This comes from the top down. If you are recruiting and training someone up in house, you are protecting the future of our industry. And you have my admiration, I promise I'm there for you if you want to get some solid financial foundations in your business before you take that step. I've put together a simple resource that's going to help you keep hold of more of the profit that you're generating in your business in just 10 minutes. It's called My 10 Minute Money Fix. You can head over to 10 minute money fix.com and grab your copy. It's nine quid. You get five money fixes that each take less than 10 minutes. I've included them as a PDF, I've included them as a video and I've included them as an audio. So you can take me on a jog round the block as well. I'm going to put that link in the description too. What have I missed? What are you thinking? Are you recruiting in your business? What's your experience been? Why not reach out and let me know? My email address, scrolling at the bottom of the screen right now: phil@buildyoursalon.com. I love hearing from my salon owner friends, I'd love to be sharing your story on a future episode of the Build Your Salon podcast. Let's get a few more guests in please. And if you don't want to buy my 10 Minute Money Fix and if you don't want to reach out and let me know how things are going in your business, do your Uncle Phil a favour and leave me a review on your podcast platform of choice. Honestly, it is the best way of helping this podcast reach a wider audience, just a few short days until I'm coming all over the airwaves again with another dose of your Uncle Phil's Wise Owl wisdom. And until then, take care.