How I Went From Hairstylist To Running My Own $3.3M Salon Business
Hello! Who are you and what business did you start?
Hi, I’m Chelle Neff and I’m the founder of Urban Betty.
After five years of being in my own salon suite, I took the leap in 2005 and opened my own brick and mortar. I had one contractor that worked for me in a space that housed over 10 hair stations.
After 6 months, I had my first employee. Six years later, I had about thirteen people working inside the salon company (half employees, half contractors).
We then moved into a space that was double the size and after a few months, I phased out my contractors and evolved into an all commission-based employee salon company.
Now, eight years later, we have two locations with over 50 employees.
What's your backstory and how did you come up with the idea?
I was led to this career path as a business owner from my sheer motivation to do better in my life than what I had grown up with. My parents had me when they were teenagers and we lived meagerly while I was young.
I knew that if I wanted to go to college, I would need to find a way to pay for it myself along with my cost of living. I naturally had a knack for doing hair and art, so when I was 16, I had the chance to enroll in cosmetology school while in high school, and by 18, I was fully licensed. This was much more affordable for me than the traditional college route, so that’s what led me to pursue it.
When I received my license in 1995, I started working behind the chair at Supercuts. I slowly worked my way up the ladder to high-end salons. Five years later, I got a small suite at the Gallery of Salons and was an independent contractor. That was my initial stepping stone to running my own business.
I identified a common issue at each of the salons that I worked at prior to opening Urban Betty: a lack of honest communication between management and staff as well as no transparency on the breakdown of hairstylists’ earnings. This past experience inspired me to open Urban Betty so that I could create a space for hairstylists that had systems, structure and the ability to succeed with setting goals
Take us through the process of designing, prototyping the first salon.
We used Monica Gellar’s apartment from the show Friends as our inspiration to help give it that “homey” vibe. Our walls are painted with bright colors, and we have several walls covered in wallpaper with gold accents and flowers to create a vintage feel. Each station has a different mirror giving our salon personality and flair.
The atmosphere at Urban Betty aims to make every client feel “at home”. Most salons are very modern and industrial and we strived to do the opposite of that. By providing a plush couch with pillows and lots of colors, it gives the illusion of walking into your own living room when you enter the salon. We also set up a cute coffee bar with a TV that further adds to that cozy home feel.
When we designed our second location in February of 2019, I wanted to keep the same vibe. And, I had the budget to hire designers to help me with this space. I’ve been through several build outs and each time the price and the quality has gone up. My first salon build-out was 70K, the second was 110k, the renovation on the second space was 70k, and this latest buildout was 200k. All were funded with bootstrapped loans from a local nonprofit and a bank. The new salon space has everything that I’ve always wanted, stand-behind shampoo chairs, beautiful wallpaper and a gorgeous neon sign that says “Peace, Love, Betty.”
Describe the process of launching the business.
In 2002, I launched urbanbetty.com as a way for me to showcase my work. “Betty” comes from my first name Betty Michelle (named after my grandmother). From that, a seed was planted and in 2005, Urban Betty became a full-service brick and mortar salon. Due to the difficulty of getting an actual bank loan, I looked at alternative options. Our original funding for the salon buildout and equipment was a $70k loan provided by a local non-profit and family, all of which was paid back with interest.
I was all by myself for the first week when I opened Urban Betty Salon and had only one hairstylist/contractor for the first 3 months. I didn’t hire my first employee until 6 months after opening. At that point, everything that I did behind the chair paid for the entire salon and my household. It was a very stressful situation. I figured out after having one employee that it was much more profitable to have employees rather than booth rental/contracted hairstylists.
After about six years, I slowly phased out all of my hairstylists that were contractors and transitioned to a 100% commission-based salon. At that point we were running out of room. We upgraded to a space twice the size. My company also had many other complications, such as not knowing how to structure our pricing lists or manage cash flow. After bringing in the Summit Salon Program and a business coach in 2014, we learned how to structure our team and our pricing list.
When I originally structured the pricing list for services at my salon, I offered package deals and all sorts of special discounts. I thought surely this was the best way to draw in new business. After struggling to make ends meet, I finally ran a report to see how much money we were giving away. It was an astonishing $50,000 in just one year. After that, with the guidance of my Summit business coach, we restructured the pricing on our service list to an a la carte menu with only a limited amount of discounts. Our revenue grew by 30% the following year! Once our profits quickly turned around, I was able to retire from doing hair in 2016 and focus solely on managing Urban Betty.
Since launch, what has worked to attract and retain customers?
I see more and more changes with social media, technology and the desire for stylists to have freedom in our industry.
I continue to adapt around these by staying current with all the trends and consistently educating myself on new technology or any social media platform the minute I hear about it. I never turn away a moment to learn or a networking event that focuses on the future of our industry.
The salon invests around 2% of our gross income every year into Yelp, Google, and Facebook Ads so that we can add videos, categorize our photos on Yelp, and appear at the top of salon search results.
I feel that Gen Z is up and coming and they have grown up with computers. Therefore, the consultation and service that they give within the beauty industry will be strongly influenced by that. As a salon, we will have to have technology built into each and every station that can help each stylist interact with their guests.
Our Instagram platform is by far the most useful marketing tool for our company. We have over 41 thousand followers. It’s a community where current guests, other hairstylists, salons, and prospective customers mutually convene to learn, share, and engage.
Most people like to see a portfolio or a resume before hiring someone for a job and our guests are the same way when choosing their next hairstylist; they like to view their work. We showcase our stylists’ work on our Instagram page as a way for people to learn more about our stylists, but also as hair inspiration for the Instagram community.
Not only do we use the platform to promote our stylists and salon, but we also use it to promote our events, sales, as well as to communicate our brand to our audience. Therefore, the success of our Instagram directly impacts the success of our business.
One of our most successful Instagram Posts was a video of us doing haircuts for the homeless. We had 3 of our stylists including myself there for four hours cutting hair. We shot a video of that and posted it. People really loved seeing that and it got over 2,6 thousand views. Showing your followers that you are part of the community and that your business can make an impact is extremely important.
The salon invests around 2% of our gross income every year into Yelp, Google, and Facebook Ads so that we can add videos, categorize our photos on Yelp, and appear at the top of salon search results. Also, our internal company policy is to respond to any negative review within 24 hours in order to alleviate the situation. We first thank the guest, reiterate the issue, and ask how the problem can be solved. Then, we provide the manager’s or founder’s direct email for the reviewer to respond back to. This tactic shows the dissatisfied guests that our company operates with compassion and transparency, which is also impactful for future guests reading reviews.
Five star reviews are always great; however, you can leverage the less-than-great reviews to appeal to guests as well. This very tactic has actually converted Yelp & Google prospects into new clients for Urban Betty!
How are you doing today and what does the future look like?
After stepping out from behind the chair in 2016, I was able to focus solely on the business. And, it continued to grow in people and profit! From 2014-2018, we grew a whopping 82%. We went from 1.5 million per year to 3.4 million. Through this growth, I found my passion for marketing, networking, and philanthropy. Having the freedom to do this not only helped my soul, but my business continues to thrive and evolve for the better. I would tell every single person out there that is working “inside” the company that they own to make a plan to get “outside” of it eventually so that you can actually see what’s going on from a different perspective.
My future plans are to continue to open more locations and create an Urban Betty product line. I am open to franchising my brand and continuing to evolve it into a company that consistently sets the standard for the salon industry.
I have always supported the success and advancement of other women. In 2019, I joined Impact Austin with more than 100 other enthusiastic members eager to pool resources for a combined larger impact. We are now one of the nation’s largest women’s philanthropy groups. Impact Austin is dedicated to helping women achieve their full philanthropic capacity. I was also invited to be part of the Community Engagement Community for The Whole Planet Foundation which helps alleviate global poverty around the world by giving microloans to entrepreneurs who are mostly women, and traditionally have fewer resources and less access to financial services.
These two endeavors are stepping stones to eventually becoming an angel investor for women that are working to start up their own companies and struggle with finding capital. I was once that woman and if it wasn’t for a local non-profit that helped me with funding, I wouldn’t be here today. I would love to be that person one day for all the up and coming female entrepreneurs!
Through starting the business, have you learned anything particularly helpful or advantageous?
In 2010, Urban Betty Salon was maxed out to capacity with only 10 stations for the 11 stylists working there. I made the decision to move into a larger location, and upon moving in, four of my contractors and one associate quit, leaving me with a salon twice the size with only half the staff. I embraced this as an opportunity to completely eliminate contractors from the salon, making Urban Betty a 100% commission-based salon. This transition to having only commissioned employees enabled me to create a more cohesive culture and brand for her business, and it increased my profit margins as well!
I’ve also learned that you can’t do it alone. I tell people that my business was built on making mistakes. And after 6 years of “failing forward”, I decided to ask for help and I hired a consultant group with a business coach. It changed my life. This was also the same year that my salon company grew by 30%! It’s great to have a person who can be a sounding board and give you educated answers based on industry experience for all of your questions. It eliminated many sleepless nights for me.
A helpful habit that I just learned was to give up to-do lists. A coach that I am working with suggested that I take everything out of my to-do list and put it into my calendar instead. It’s amazing how much you can actually get done in 15 minutes when you are intentional about it. So instead of lists, I put all of my to-do’s into a time slot on my calendar. I have been getting everything done every day and it doesn’t loom over me anymore.
What platform/tools do you use for your business?
We use Envision as our POS system. We book all of our appointments through Envision and use it for all of our reports including service totals, retail sales, and client retention. We love it because we can customize reports based on the stylist’s performance and track their goals. The system also sends out text messages to confirm every guest's appointment. Guests can book online directly through our website as well.
Don’t be afraid to take the reigns and step into your own power. When I first opened my salon, I didn’t want to be in charge of anyone. I was only 27 and the thought of telling others what to do terrified me.
Meet Your Stylist is a tool on our website that invites new guests to take a survey to see which of the salon’s service providers you best match with, offering three potential matches and connecting the guest to their bios. The survey essentially is a “matchmaking” service for service providers and guests. It uses the technology of The 5 Love Languages to poll each person. Our stylists have taken the same quiz, and therefore each guest becomes a match based on their
answers. And when a guest gets a client that they can click with right away, they are more likely to stay with us!
We regularly use MailChimp for our marketing emails. We send marketing emails to promote our salon’s sales, products, and events, as well as to inform and educate our clients and readers on various beauty-related topics. Mailchimp has helped streamline our email marketing through the ease of its email-building design and its tips for every step of the creation process. We’ve been able to identify and enhance key areas needing improvement through the use of Mailchimp’s reporting functions. For example, this last year we placed a strong focus on email subject lines. My marketing manager crafts a powerful subject line for every newsletter in order to maximize our open rate. We can see what works with our audience and what doesn’t, and we also have visibility on important metrics like which blogs receive the most clicks on each newsletter.
In 2019, my marketing manager and I completely revamped our monthly newsletter to enhance its aesthetics and create more consistent branding. We used a graphic design tool to aid with this called Canva. And since Mailchimp allows you to create an email from a template, it has saved us so much time with creating emails. All we have to do is just duplicate the previous month’s newsletter, change the content blocks, and update the rest of the information.
What have been the most influential books, podcasts, or other resources?
Fierce Conversations by Susan Scott is a book that transformed my business. When I started out, every single employee came to me for every single question that they would have. It became exhausting. I attended the Fierce Conversations workshop in NY and learned a great system to help alleviate that issue.
It’s the Decision Tree. It envelopes the four categories of decisions:
- Leaf Decisions: Make the decision. Act on it. Do not report the action you took.
- Branch Decisions: Make the decision. Act on it. Report the action you took.
- Trunk Decisions: Make the decision. Discuss your decision with me before you take action.
- Root Decisions: Make the decision jointly, with input from many people.
These are the decisions that, if poorly made and implemented, could cause harm to the organization. We know include The Decision Tree into our new employee orientation with each level being assigned to a different person within management.
Advice for other entrepreneurs who want to get started or are just starting out?
Don’t be afraid to take the reigns and step into your own power. When I first opened my salon, I didn’t want to be in charge of anyone. I was only 27 and the thought of telling others what to do terrified me. I thought the resolution to that, was to hire only contractors that would pay me weekly rent for their salon chair and do their own thing.
Even if people are running their own business within your business they need structure and a cohesive culture that can only be led by the owner. Eventually, I changed my salon company to all commission where I could lead like a boss and have the culture that I wanted.
Are you looking to hire for certain positions right now?
We are always hiring for stylists and our front desk team at Urban Betty! We require that all stylists are full-time and we do hire part-time and full-time for front desk positions. Our main motto is that you should be nice and we can train the skill. Most recently, a position for a marketing assistant has opened up! Please submit your resume here.
Where can we go to learn more?
- www.urbanbetty.com
- www.facebook.com/urbanbettysalon
- @urbanbettysalon on Instagram
- @urbanbettysalon on Twitter
- chelleneff@urbanbetty.com
- www.linkedin.com/in/urbanbetty/
If you have any questions or comments, drop a comment below!
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Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
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