In a recent chat with Christa Stephens of Inviktus Salon, she discussed how her business thrives after adopting a parts + labor pricing model.
Rosy: What made you dive into your numbers?
Christa: The first time I entered Salon 200, I didn’t get in. The second time I entered, I got in. That process caused me to dive in even deeper and look at each of those numbers, as you have to say what percentage of your business is this, that, and the other for the application. And as I looked at that, I was like, “Holy cow! – that’s a lot of things going out in different areas!”
I asked myself, “Where do I save the most money?” Would it be getting lesser of an insurance coverage for my business? Absolutely not! Where would I grow and add more money to my business? Can you push and push for your team to add more services? You can, but – if it isn’t there to add – right now, we’re seeing fewer clients than we’ve seen in all of our days, and it has nothing to do with who our company is. We provide excellent services. It’s just the economy we live in – we’re seeing fewer people, so we’ve got to make it count.
Rosy: How long have you been using your color management system?
Christa: I started using it right before COVID. I had just started thinking about how I would redesign my business, and it was during that time that I changed my whole world around. Everything I knew in my company had to change and look different, and I knew that a big part of it needed to start right there.
When I called Alicia at SalonScale and spoke with her, she was so amazing and kind, and her heart was just so for the industry that I knew she was who I wanted to partner with. I wanted somebody with the heart of a hairdresser, and she was really supportive of whatever decision I made, not forceful but factual, and had information ready in hand to work with me.
Rosy: What were some of the indicators in your business that made you realize that you needed to make a shift?
Christa: Looking at bills and financials and actual service costs.
If you’re looking at a $100 all-over color – everybody is so different: short hair, long hair, etc. – and I kept thinking, how much of this is actually an “extra bowl of color?” At the time, that’s how we charged everything out. Who is putting this extra bowl on the books, and who is not? And who are we really hurting, ourselves or the business, or both? It was actually hurting both.
My salon has a 40/60 commission split: 40 to the stylist and 60 to the salon. As I started dissecting the numbers and factoring in the bills, I realized I needed to squeeze about 10% back out of the $100 for the salon’s cut to make things work in my business. How am I going to do that?
Essentially, for every bowl of color, we needed accountability. You can’t just say that a bowl of color is $15. As I started playing with SalonScale on my own, I soon realized that I used $110 of color on a guest. Granted, she was undergoing a double-process full transformation. But let’s just say that was a $250 service. Of that amount, $110 was taken out for color costs, leaving me with peanuts to survive on. I quickly realized that this has to be a parts and labor business.
I didn’t mark my color up for the first two weeks that I used SalonScale because I was scared to death to do so. I would talk with Alicia almost daily and ask her, “Are you sure? Am I doing this right?” I was scared and nervous, and she said, “Do what’s comfortable for you.”
We mark color up 210% now, which accounts for new bowls when you need them, foils, foiling combs, tools we might need in the salon, and everything we need to do the job. It also helps with some of the assistant pay. I also marked up the color to cover anything that might come at me in the current industry with inflation, whatever. Let’s say the lightener is $36 for a tub. I enter it at $40, and then we charge it out at 210%, so there is some play in it for me in case prices go up or things fluctuate as they do.
Rosy: People look at the business side of color in two ways: Some see it as wasting so much color, noticing so much of it dumped in the trash. You see it as how we get more money out of the color we’re using and make sure the charge to the guest is profitable based on what they are using. Can you explain your thought process?
Christa: A lot of times, we look at our salon as ourselves; I quit looking at my salon as “me” and started looking at it as the entity of Inviktus. The salon Inviktus is owed these things. Every month, everything that we do must cover “her” needs. There must be enough to pay for the color, the back bar, the rent, utilities, foils, etc., as those are her needs.
My needs are different; Christa, the stylist, and my team’s needs differ. So, we treated it (the business) as a different entity. This is my opinion: when we as owners say, “You’re wasting this” or “You’re using too much of that,” some people look at us as if we’re just getting into their money. No, it’s not my money; this is what the business needs to function, and without it, we’re doing that entity a disservice. So, I treat them all very separately.
And that’s how I figured it out. Her needs must be met; Inviktus’s needs must be met. And it has nothing to do with my needs, or hey, you guys are wasting color. If you want to continue, you’ve got to charge accordingly. If not, we can’t do the things that we do in the place that we love to do them because her cup is empty.
I just had to take myself out of the equation as a leader in general. When talking about things in the salon, we need new blow dryers. Well, are we taking care of the ones that we have? Are we doing this or doing that? And we start sounding like moms. Did you clean your room? Did you do this or that? When we speak about the business as another entity, people move better. Or I feel like people move better. They start saying, “Yeah, we should pick up after ourselves, we should do these things, we owe it to Inviktus. We owe it to the business to do these things. So that she can continue to provide for us; without them, she cannot continue to provide for us.”
Rosy: They start to have some ownership in the business and feel a part of it, like they are contributing to it, right?
Christa: I start looking at my leadership differently when talking to the team about anything in the salon. We just recently started how to do a 401k; what will we do about that? One of my younger stylists asked if I would offer that. And I said I don’t know, let me ask Inviktus because I’m an employee here too. And I want to do what’s best for her and you, so let’s see what that looks like. We came up with the conclusion that we were going to start at 401k for each and every stylist that’s been at the salon for x amount of years, but it was going to look different.
This is how I explain it to the team: For every guest you saw – say you saw 600 in a year – then $600 goes into your fund, and you can either match it or put more in. And it’s dumped into a 401k. You have to build the 401K because that’s your responsibility; we have to quit thinking that the business or the person behind the business is providing all of that for you. That’s not the world we live in anymore. This is your financial responsibility, just like I taught everyone in the salon that this is Inviktus’s financial responsibility. We have to ensure those needs are met just like you have to meet your own needs.
Rosy: How did you get your team on board with the new pricing model?
Christa: I piloted SalonScale at first, and it was just me using it. I would use it for two weeks to see how I liked it, and the team came on board after that. The difference was that the original $10 fee that was taken out of their commissions for color costs, was now allocated to cover vacation and sick pay. The actual color costs were instead passed along to salon clients and marked up for the benefit of the salon as a whole.
Rosy: How about with your clients?
Christa: I told every single one of my guests when we came back from COVID, “I have done you wrong, I have done myself wrong, I have done my business wrong, and I have cut myself short.” I am very self-aware of my whoopsies, and so I just shared that, and I said, “I can’t continue to do business if I don’t do this. It’s just like for you when you go to the grocery store, are there ever times that you have to put something back? You don’t want to have to do that. I don’t want to do that. I don’t want to not have any lightener on deck this week because we can’t afford it. I want your hair to look the best all the time, and to do that, we have to make this a parts and labor business.” Everyone was on board with it; all my clients were great about it.
Rosy: What does that conversation look like to a customer needing help understanding a parts and labor business?
Christa: Pricing is so important in our business but 90% of the clients don’t have any questions about it at all. We always share with them in the beginning, so today, you’re going to get a highlight. I am assuming that your hair is going to use $20 to $30, maybe even 40, worth of color. I will let you know if we go over that, so you can be advised, or you can see if you have any leeway in your budget for that if we go over because everybody’s hair is different, and porosity and how much color it uses, but we are a parts and labor business. No one ever says, “No, just do half of my head,” or, “No toner for me today, please!” But it does make them aware. Sometimes, they’ll say, “On my next visit, should I plan for this much again, or will it be less? And I may say, “Your next visit is just a glaze or tone, and you can account for less if we’re not putting more highlights. On transformation days, it is going to be pricier than on maintenance days.”
The average color ticket is around $23.65. We do have the occasional complainer, but that client is just not for us. The most freeing thing you can ever accept in your business is that a client just is not for us. I used to save every single one of them, in fact, I would try harder on the ones that were the hardest to keep versus the ones that did great. And now, the 80/20 rule applies in every part of my business. I am not going to give 20% of the staff 80% of my energy. That’s not doing the right thing. I am not going to give 20% of the pain-in-the-butts in the salon (clients) 80% of my energy. They’re trying to pin it on what’s wrong with your business when it’s more about their finances.
When you get an oil change, they tell you how much a filter is, and when you get the best filter, they’ll tell you the cost. We can do the same thing. We can mix our color a little differently depending on how we’re using it to make it a little bit cheaper, but there’s really not much else we can do other than direct a client to a different service.
Just being very forthcoming and how we do business sets us apart as professionals. We are doing business and trained to do business. What we do is a creative outlet, which is art, but it’s also a skill. It’s a very strong skillset we have trained for; it’s just a different business.
Rosy: How do you talk to people about their beauty budget?
Christa: If somebody likes the look of a full highlight but their budget isn’t there, then I am skilled enough to do different color placements that can give them maximum impact with fewer foils. I can give them a look that changes the fees around a little bit; we can maybe focus on keeping a lot of blonde up front and doing different placements to guide how the appointment is going to look. Or it’s like let’s do a partial highlight today and then another partial in eight weeks or so, and then do the underneath side, little bits at a time to suit your budget. I don’t want to break the bank for anyone, but it’s business.
Rosy: Salon owners often discuss their business costs, but many are actually investments in tools and resources that can drive revenue. For example, software can enhance earnings, while SalonScale helps retain more revenue and minimize waste. What advice would you give to other salon owners who are uncertain about needing such services? How can these investments be beneficial?
Christa: Looking at your time: how many days are in a week, and what you have the time to invest in. So, if I didn’t have Salon Ninja, Rosy, Tippy, and SalonScale, do I have the time to drive the sales, and to talk to leads, and be that person? No. That’s why we’re deskless. The revenue isn’t there for us to have a staffed desk and that’s why we use a different company for all of that. We have to take out the maximum amount of the investment: what does that maximum investment look like, what will it do for the business, and how quickly will it do it versus what is my investment, how much time, and what is the impact?
For me, having Rosy, Tippy, Salon Ninja, and a virtual assistant, I have cut down tremendously on finances that would cost me a lot to have a marketing advertiser, front desk, and all the other things, including running Facebook ads, etc. Do we still run the Facebook ads? Absolutely! But we set ourselves up through Salon Ninja. Do we work with the virtual assistant? Yes, absolutely, we do. We use that to a maximum because we want to avoid a front desk in our salon. And that’s how we save money.
Look at the maximum pain point in your business and what your breaking threshold is, and then divide it out by the investment and return on investment (ROI).
It’s just like you do with your own staff when you hire someone new; how long does it take to get their feet on the ground, and what does that ROI look like for that staff member? I know that it’s going to take me three months to train them, and it’s going to take two years to get a return on investment. With all the things that I have in place, and once I started, I saw an ROI within three months. I’m going to do that every day and work smarter, not harder.
Rosy: How else has using a color management system helped your business?
Christa: If I do one in-bowl enhancement such as a glaze or a conditioning treatment or anything like that, we measure out the pumps, which also goes on the ticket. Anything that we do is factored into our color management software. The idea is that if I’ve got someone in the bowl and I’ve got 30 minutes of my time, would it be more advantageous for me to offer an in-bowl service? Maybe a color gloss or trauma treatment, or some sort of treatment that I can weigh, knowing that we’ve marked it up 210%. What that’s going to do for the salon, and how that’s going to drive the service, there’s going to be a commission for the stylist, of course, as an add-on service, but how are we doing right by Inviktus for saying thank you and pushing your service to her as well; the service that builds revenue in Inviktus.
Looking at the numbers, say we had $25,000 of revenue in color charges. That means half of that is actually what we purchased, and the other half is revenue. It’s revenue to the salon that wasn’t there before.
Rosy: When inspecting expectations, consider how employees might accidentally skip measuring, underreport usage, or not measure at all. What methods do you have to ensure these practices are effectively monitored?
Christa: I don’t commission my team on the color charge; besides, bumping that ticket up to get more commission would be unfair to the salon. That’s the salon’s money over and out. If my team wants to do more or get more, they know to do more or add on a service.
I am teaching them to add on to their labor not their parts. You just can’t fudge parts; that’s not fair. We don’t commission on that, and it goes fully back to the salon for the salon’s needs, such as foils and all of those types of things to make sure we are running properly. If the team would like more pay, I highly recommend suggesting add-on services and retail to the guest. These are the areas that if they want to grow, they can grow in, but it’s not in the parts side of my business.
And inspecting what I expect? At the end of the week, I do run a report, and if their color tickets are high but their color fees are low, I’m immediately able to say, “You forgot to add on six or whatever times. This is your first warning. The next payroll, I can be like, “Hey, these are your color tickets; what’s happening here?
I run the commission report. I’m able to look at those things and go back to their tickets. That was a really low week of product charges. What’s happening there? We had to be very clear that we’re not taking that money out of their pay; it’s a charge to the client.
Rosy: How do you ensure the team follows all the practices you’re implementing? Are they measuring the color and adjusting the ticket as needed?
Christa: When somebody onboards with us, they get their own scale and iPad, and they are responsible for those things. They should go everywhere you go when you’re doing color. When you’re weighing, you should drop it down and put it all together. It gets put away in your area, so it comes back with you the next day. It is part of our practice for onboarding to make sure these things are done correctly.
You have to constantly look at those tickets weekly, monthly, quarterly, and yearly—never taking your eye off the goal and what the next goal is. And if SalonScale, Tippy, and my salon software (Rosy) are working hard for me, I always have a checks-and-balances system that I can look at.
I can look at a report and quickly see if they’re not doing great with customer service because their tips are less than 22%. I’m pretty sure our average tip is between 22 and 25%. So, if someone has a low tipping rate, I can look at Tippy, look at a report on Rosy, and look at Salon Ninja and see requests and all of the stuff, and I pretty much have a timeline and see if I’m not keeping up with them and not giving him enough training, or they failed themselves. By not continuing, you can see the misses. I have my security checks, and I can always see what is missing when I’m checking those three systems.
Rosy: How do you confirm that everything is working for the business?
Christa: Every year, I’m looking at about $30 to $50 K of revenue coming back to the salon. There’s my original buy-in, and then there’s that markup of 210%. When I’m breaking down my cost of goods, I break mine down a little differently on my profit and loss statement. I can see what I actually spent buying the color, and I’ll know what the actual profit is.
I never have to tell the team, “No, we can’t have new blow dryers or any of those things,” as that funding is sitting there for that. I’ve never once had to say we don’t order that we can’t afford it this week. That isn’t even a question in the salon anymore. If we need something, we get it because we can.
I know it’s paying off for us. When you log on to your dashboard and see all of your stuff, you know you’re doing the right thing for your business.
You can run a report by stylist, and see who’s using the most color and who’s not using a lot against how many tickets they’ve got. There’s a lot that you can dive into, it will even do inventory for you. Right now, I can see a scale is open in the salon for $10.04, I can dive right in and see what color they’re using. What the formula is. It’s consistency. Then it shows an add-on button and a button for extensions. When I do a treatment at the bowl, I’m able to add in that treatment and say it was for X pumps of XYZ, and it is this much, which goes on to the ticket.
We’re just creating revenue streams in a ton of different ways. I firmly believe that to stay successful, you have to have multiple streams of income coming into your business, and charging for color and marking it up is just one of them for me.
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