Personal finance

Good Cash Podcast: Constructing a Brick-and-Mortar Enterprise | Good Change: Private Finance

Welcome to NerdWallet’s Good Cash podcast, the place we reply your real-world cash questions.

This week, we discuss with a enterprise proprietor about how she opened a full-service magnificence salon and bar, grew it to 2 places with dozens of staff — and the way she pivoted many times throughout the COVID-19 pandemic.

Take a look at this episode on any of those platforms:

Our take

Uyen Le grew up working in her mom’s nail salon. In 2013, she opened Magnificence Bar, which provides hair, nail and esthetician providers in addition to a full bar. Magnificence Bar now has two Colorado Springs places and as many as 80 staff when absolutely staffed.

Persons are additionally studying…

Le’s associate, an actual property agent, steered they purchase a constructing in downtown Colorado Springs so Le might open her personal salon. With an SBA mortgage and financing from household, she purchased the constructing in 2012 and opened Magnificence Bar’s doorways in 2013. Later, they added a second location.

Within the first months of the COVID-19 pandemic, Le says the salon reinvented itself over and over. As a result of her stylists have been staff as an alternative of contractors, they have been capable of accumulate unemployment whereas the salon was closed. When hair and nail providers have been allowed to re-start however pores and skin providers weren’t, they turned esthetician rooms into personal rooms for cautious shoppers. And after they needed to stockpile provides to remain forward of provide chain points, Le began excited about including wholesaling to Magnificence Bar’s income combine.

In the event you’re dreaming about beginning a enterprise, Le says, be ready to assist do each job within the firm for no less than the primary 12 months. Keep centered in your area of interest and check out to not examine your self to your rivals. And do not forget that there aren’t any silly questions — don’t be afraid to ask for assist whenever you encounter one thing you don’t perceive.

Our suggestions

  1. Put together to leap by some hoops: You’ll possible have to take a position money and time into licensing, allowing and zoning points, particularly if you happen to’re opening a brick-and-mortar enterprise.
  2. Work out your financing: SBA loans are backed by the U.S. authorities and issued by banks and different monetary establishments. They’ve aggressive rates of interest and lengthy reimbursement phrases. However you may have different choices, too, like family and friends. Ask for assist and store round to place collectively the financing that works greatest for you.
  3. Seize development alternatives as they arrive: Possibilities to develop what you are promoting or diversify your income can come up out of all types of circumstances, even a pandemic.

Have a cash query? Textual content or name us at 901-730-6373. Or you possibly can electronic mail us at podcast@nerdwallet.com. To listen to earlier episodes, go to the podcast homepage.

Episode transcript

Sean Pyles: Welcome to the NerdWallet Good Cash podcast, the place we sometimes reply your private finance questions and enable you to really feel slightly smarter about what you do along with your cash. I am Sean Pyles.

Rosalie Murphy: And I am Rosalie Murphy, a NerdWallet author who focuses on small enterprise.

Sean Pyles: As we speak, we’re bringing you the subsequent installment in our Nerdy Enterprise collection through which we interview entrepreneurs about beginning and rising their companies. Rosalie, who’re we speaking with immediately?

Rosalie Murphy: As we speak, we’re joined by Uyen Le. Uyen is the proprietor of Magnificence Bar, Inc., which is a full-service salon, bar and boutique with two places in Colorado Springs, Colorado. Uyen grew up working in her mother’s nail salon and took over the enterprise when she was fairly younger, after which she launched her personal idea in downtown Colorado Springs.

Sean Pyles: Very cool. Properly Uyen, welcome to Good Cash.

Uyen Le: Hello. Thanks for inviting me right here immediately. I am so excited to be on Good Cash.

Sean Pyles: We’re so excited to speak with you, and I believe it will be attention-grabbing to begin with listening to about your background within the magnificence business. Are you able to inform us your expertise?

Uyen Le: My household are immigrants to America. I got here after I was six, acquired my citizenship after I was 11. My mother opened the primary nail salon in 1996. So solely nails, no hair, no pores and skin, nothing, simply nails. So I just about grew up within the nail salon. If we weren’t in class, we have been within the salon. Acquired my license after I was 17, and simply sort of advised my mother I’d by no means work within the salon as a result of that wasn’t going to be for me. Then my first day of school, I additionally knew I wasn’t going to make it in school. And so, I needed to inform my dad that, and I simply keep in mind him saying, “Then that you must be ready to work for the remainder of your life.”

Uyen Le: And so I mentioned, “You realize what? I can. I believe I can.” And that is what I have been doing ever since, chasing that dream.

Sean Pyles: OK. Attention-grabbing. And might you describe Magnificence Bar, the enterprise that you just personal immediately?

Uyen Le: So we’re a inventive mix of full salon providers. We do hair, pores and skin and nails, however we even have a full bar, which we create superb, beautifully-crafted cocktails. After which we even have a boutique contained in the salon.

Sean Pyles: Huh. Feels like a enjoyable place to hang around for just a few hours, have a drink and get your nails carried out and chat.

Uyen Le: Sure. It is a one-stop store sort of deal as a result of our first location is downtown, so we get a number of enterprise individuals, particularly businesswomen. So, the joke has all the time been you are able to do 5 conferences in a single assembly. And so, all of them see one another there. And so, they begin speaking about stuff that’s developing or stuff that, “Oh yeah, I used to be going to inform you one thing. Excellent. You are right here.” So it is enjoyable.

Rosalie Murphy: What went into getting that enterprise up and working? What was happening behind the scenes whilst you have been working to launch Magnificence Bar?

Uyen Le: So actually, as a result of working for my household, I by no means felt like I wanted to personal my very own enterprise as a result of my mother all the time handled me like I used to be one of many house owners. So however then I met my associate, Chris Morrison, who’s an actual property agent. He is from Colorado Springs, he loves Colorado Springs, and he mentioned, “Why do not we simply purchase this constructing?” 2011 round there, it was nonetheless actually good in the actual property market. And for us, our downtown is tremendous small and quaint.

And I am like, “Yeah. We will do that.” I’ve slightly little bit of expertise in massive metropolis dwelling, massive metropolis life. So I mentioned, “Yeah. Why do not we do this?” So not solely have been we going to be our personal landlord, the folks that personal the constructing, however now we’re additionally opening a enterprise. So it was quite a bit. We had quite a bit happening. So my mother and my aunt was capable of lend us some cash. However then, my enterprise banker steered that we attempt to apply for this SBA mortgage. And that is what we did. So our SBA mortgage was to assist us with the development of the constructing, after which the opposite facet of it was now the capital to run the enterprise.

Sean Pyles: What’s attention-grabbing about Magnificence Bar is that you are a hybrid of a pair several types of companies without delay. You’ve got a bar and also you even have a salon on the identical time. Was that troublesome to begin up? Did you are feeling such as you needed to arrange two completely different companies distinctly, or was all of it sort of bleeding collectively?

Uyen Le: So in a manner, we have been each new to the whole lot. In downtown, you may have zoning, so whenever you’re the owner, you must fear about zoning. So then you must put in a zoning allow to see if you’ll be able to even open that kind of enterprise. And so, studying that half, zoning, even your signal, you want a allow on that. So it was actually onerous and was actually rewarding on the identical time. So I realized actually quick and I began speaking to individuals. And if you happen to mentioned you have been an proprietor of one thing, I simply begin asking, after which that is how I be taught. I do not assume that there is any silly questions.

Sean Pyles: What was the method like getting your liquor license?

Uyen Le: Exhausting. Exhausting. As a result of often liquor, they go hand in hand with meals.

Uyen Le: And so we do not have that meals idea, we have now a service. So we wish to present a service, after which you will get a drink. In order that was actually onerous going to the liquor board. Primary, it prices some huge cash to get a liquor license. After which, whenever you go to the liquor listening to board, you may have six older businessmen, so there is not any lady on the board that understands what a full-service salon is.

And I’ve to maintain reminding folks that I’m, primary, initially, a full-service salon. I’m not a bar. And so, I’ve to maintain telling them, “It is in all probability going to be like 25% of the revenue is the bar, and if that.” As a result of if you happen to’re averaging one drink per particular person, or some individuals may get two, that is not quite a bit. And a few individuals do not get any in any respect. And so, that was the factor that I needed to promote myself and now have to inform, “OK. That is simply an additive.”

Sean Pyles: So if it was so troublesome, I’ve acquired to ask, why did you retain pushing for it? What about having a bar in there was so vital to you?

Uyen Le: I all the time consider that if you happen to hold placing one thing on the market, then it will come. And so, I used to be already speaking about it. I used to be speaking about, “We’ll have a bar.” I used to be speaking about it to my consumer. I used to be speaking about it to anybody that I knew. So there was no manner I wasn’t going to have a bar. And it was onerous. We opened with out the liquor license. And once we did open with a liquor license, we might solely drink on the bar. So then we went to the state. And so one of many board members really got here down and toured the salon in order that he might perceive. In order that’s how we acquired our liquor license.

Rosalie Murphy: What does what you are promoting appear to be immediately? How a lot of your income does come from the bar and the way a lot comes from hair and nails and skincare and all the opposite issues?

Uyen Le: Actually, our liquor enterprise has gone up fairly a bit. It’s nearly gone up yearly, now that individuals notice that we have now it and the way cool it’s. So not solely that, we began sort of like mixing our service. So if as an instance you go in to get a hair blow out, if you would like your hair to be sort of messy trying, bedhead, you are able to do an additional soiled martini with it.

Rosalie Murphy: That is humorous.

Uyen Le: So we sort of mix it in slightly bit. So it is fairly cool. And now that we have now a reputation and folks know, it is gotten simpler with the bar and it is really actually enjoyable. The bartenders are enjoyable. They do not know something about hair, and each time we rent them, they’re like, “You certain I’ll earn money doing bartending?” And we’re capable of develop individuals, too, in that facet. Our entrance desk turns into our bartender. Our bartender turns into our entrance desk.

Rosalie Murphy: Yeah. You’ve got two places now. What number of staff is that in complete? And it is a actually difficult setting proper now to rent and retain staff. How are you coping with that?

Uyen Le: Earlier than COVID, the final 12 months was 2019. We have been all the time sitting on between 70 and 80 staff between the 2 salons. After COVID now, that is our first full 12 months actually being again with none restriction. We’re sitting about 65 by 68, however the service greenback has grown. So I assume in a way, it is a good factor. After which additionally the folks that wish to work, they’re actually, actually working as a result of now they’re making much more cash than they’d earlier than, and there is extra alternative. And our job is tough as a result of once we rent them recent out of faculty, we spend a lot time coaching. Generally they work below our grasp stylist for a 12 months simply coaching, simply studying the way to reduce hair, do nails or any of that. The time that’s put into that may be a lot for the result that we get. So we attempt to construct that worker retention actually excessive.

Rosalie Murphy: Yeah. I do know within the magnificence business, oftentimes, I believe my hairstylist simply type of rents a sales space at her salon. How does that work in your salons?

Uyen Le: So the salon enterprise, we all the time have a foul repute for prime turnover, and we actually do as a result of how do you develop someone and be capable of nonetheless revenue on the identical time? And everybody says, “Workers value some huge cash.” For an employer, it does value us some huge cash, particularly hairstylists and nail technicians. They do not have a look at us like we’re very sensible or make some huge cash, however I can inform you, I’ve folks that make six figures in my firm doing hair and nails. However on high of that, our enterprise idea is tough and completely different as a result of it prices the proprietor extra money. So we’re a W2 commission-based salon. So we do not do any sales space renting or any of that. All people that is within the salon is an worker. We additionally supply healthcare for anybody that qualifies for that. So you must work with us for 90 days first. After which we additionally do a bonus construction based mostly in your gross sales greenback and likewise trip pay. And trip pay relies in your retail sale.

Uyen Le: And the way we keep our buyer and constructed that’s we make investments quite a bit. I’ve grasp stylists that oversee their division, and we have now leads that sit with each single certainly one of our women and present them their numbers and the way they should develop. You must keep your clientele. First, they’re the Magnificence Bar consumer. After which how do you flip them into your consumer? And that is a talent as a result of individuals are not raised with customer support. It is all about customer support. I believe we’re the one job that actually is six inches away from the consumer. And we’re continuously touching them all through that entire service. So how a lot nearer are you? So if you do not have that customer support, I all the time say, “Oh, she will’t reduce her hair straight for something. However man, individuals love her as a result of they arrive to see her.”

Sean Pyles: Constructing that relationship is basically vital.

Uyen Le: Yeah, precisely. That is what I train all of the younger women. I mentioned, “You do not know who’s in your chair. You do not know who you are speaking to.”

Sean Pyles: You talked about COVID slightly bit in the past, and I would love to listen to how that modified the way in which you concentrate on and run what you are promoting.

Uyen Le: So my joke is — and everybody that works for me is aware of — I felt like within the final two years I in all probability opened 4 several types of salon again and again. And we did it very properly. Once we acquired shut down, so we acquired shut down in Colorado for six weeks. So as a result of they’re W2 staff, they have been capable of get on unemployment straight away.

Uyen Le: So it was very nice, that was one load off of me after I know that my lady was not contracting and that they have been capable of name unemployment and get on it straight away. That was so, so, so good. That is the good thing about being a W2 worker. So, after which we have been capable of open. So once we first got here again, we solely had 10 individuals. So we had 5 staff and 5 prospects in the entire salon.

Rosalie Murphy: What would you usually have?

Uyen Le: I do not know, 40 individuals.

Rosalie Murphy: Oh my goodness.

Uyen Le: Generally 50 individuals. So we’re not the quiet, romantic kind of salon. We’re loud speaking, “Hey, can I’ve one other glass of wine?” kind.

Uyen Le: So it is actually, the vitality is basically good in there once we’re tremendous busy. So going again to that, we have now to primary, clear the whole lot out. Then I simply reached out to all the women. I mentioned, “Who desires to return again to work, and who would not wish to come again to work? I will take whoever first. I can solely do 5 at a salon. We might in all probability do 10 if we double shift.” So we usually open from 9 to seven. So we really opened from seven to eight in order that we might double shift. So then that went away after which now they open it thus far you possibly can have as many individuals as you possibly can within the salon, however they in any respect time must be six ft aside. And so then we might convey extra individuals in, however the pores and skin division could not come again but. So then we flip all of our esthetician rooms and lash rooms into now private suites. So actually three companies proper there.

Sean Pyles: Yeah. Feels like quite a bit to handle.

Uyen Le: And lots of people selected to remain closed, and so they have been in a position to do this. However I knew that if I stayed closed, I’d in all probability by no means return as a result of it will simply be tougher.

Uyen Le: I believe when the onerous time comes, and also you simply take care of it again to again to again to again, I believe you are able to do it. However when you may have an extended break, as an instance I used to be closed for six months after which reopened till six months. I do not assume I’d’ve had the vitality to do it.

Rosalie Murphy: What about a few of the different impacts of COVID? I imply, there have been provide chain points. We have seen actually dramatic inflation during the last couple of quarters. How is all of that stuff impacting what you are promoting?

Uyen Le: I do know that I am the face of Magnificence Bar, and folks assume that it is simply me, that I am the superpower lady, however I am not. I’ve a very, actually superb group. And so working by this and with the ability to like, “Hey, you guys, are you able to do that for me? Hey, are you able to do that for me?” So once we go and get provides, we have now to drive right here, drive there. Or when it was again up, it was onerous. Sorry, I am simply getting emotional. I do not know why.

Rosalie Murphy: Oh, that is OK.

Uyen Le: We simply realized to now purchase stuff in massive bulk. My mother’s storage turned our storage, my sister’s storage, my storage. And we have been capable of simply purchase stuff in bulk and pallets. It wasn’t like COVID, that was going to cease us. However now it was the availability chain.

If we do not have the availability, how might we do it? You are speaking about hair coloration. We’d like that. It is not like the corporate shut down. It wasn’t getting right here. However I knew, I knew simply because simply from shopping for the stuff that we would have liked to purchase for COVID, which was gloves and masks, and it was how costly it had gone up and the way they did not have any. I simply knew that I simply must replenish. And I am tremendous grateful for the enterprise that I am in, apart from from the bar. The stuff that we purchase, they do not go unhealthy. So if we have now to sit down on it, it was going to get used.

Rosalie Murphy: Yeah. What do you assume the long run holds for you and your group and Magnificence Bar?

Uyen Le: Quite a bit. I am excited. It acquired me pondering a number of issues now, as a result of not solely do I’ve an amazing group, but in addition I’ve a number of loyalty and I might really feel that and I might see that. And I am tremendous grateful in any enterprise that you’ve, I believe when your staff get to the highest of your organization, there is not any extra room to develop, however to be their very own boss. I all the time need to earn more money, why would not they need to earn more money? So I believe there’s all the time a cap in our firm. And so with all this, it is opened my eyes. So a number of issues that I can do, just like the scarcity on provides, it acquired us pondering, “OK, possibly Magnificence Bar must be a provider. Ought to we open a provide store?” That when our women wish to depart us and wish to personal their very own sales space rental or run their very own salon that possibly they will purchase from us as a result of they know us as a result of there is a relationship there.

Rosalie Murphy: Yeah. And it is the merchandise they’ve already been utilizing.

Uyen Le: Precisely. So that they know precisely. And all they must do is simply now purchase it from us. So that’s one thing that we have been pondering. After which with me simply getting older, my shoppers are getting older. My very top-notch stylists that is been with me for a very long time are additionally getting older. So we’re very actively trying into opening up a med spa as a result of now we’d like additional machines to assist us look slightly bit youthful.

Sean Pyles: It makes a number of sense to evolve as your clientele are, as properly.

Uyen Le: Sure. I’ve a number of clientele that is been with me since I moved to Colorado Springs, which is eighteen years in the past. They usually’ve seen me from after I was younger to now, and so they wish to be with me, and so they’re beginning to ask me questions within the magnificence business. “Uyen, I actually wish to get this carried out for my bag below my eyes. And I am excited about this, what can I do?” And so I am beginning to see that. So I do not supply it proper now, so that they must go some other place. But when I supply it, then I can simply transfer proper in. And I have already got that belief.

Sean Pyles: Properly, Uyen, I’d love to listen to what recommendation you’ll give somebody who’s excited about beginning a enterprise of their very own.

Uyen Le: Properly, are they certain? Is that what they really need?

Sean Pyles: You did not need that to start with and you then ended up doing it anyway.

Uyen Le: Joke apart. Actually, I’d inform them, are you able to commit seven days every week, 24 hours being the entrance desk, the receptionist, the cleaner, the janitor after which additionally doing what you are alleged to do for that enterprise for no less than the primary or second 12 months of the enterprise? And if you happen to can say sure to that, then it is an amazing alternative. I believe that individuals do not understand whenever you open the enterprise, you’re the whole lot. You might be actually the whole lot till you may have that capital coming in to now rent different individuals that will help you with that.

There’s a number of alternative out right here on this nation. There’s a lot cash on the market that may very well be made. And if you happen to can simply give attention to what you may have already going inside what you are promoting, then you are going to be superb as a result of I believe we get misplaced and we create tales in our head and we begin to have a look at our competitors like the subsequent salon down the road from me, what are they doing? And I all the time inform the women, “You guys, don’t be concerned about what they’re doing. We simply have to fret about what we’re doing, and it will be superb.” I do not assume it is a competitors. I believe everybody has a distinct area of interest, and that is what it’s. That is why it is such an amazing world to dwell in.

Sean Pyles: Properly, thanks a lot for speaking with us and sharing your story, Uyen.

Uyen Le: Sure. No, thanks for having me on right here.

Rosalie Murphy: And now let’s shut out with some takeaway suggestions for our Nerdy entrepreneurs.

Sean Pyles: First, in case you are opening a brick-and-mortar enterprise, you are going to have to leap by a number of hoops. Be ready to take a position money and time into licensing, allowing and zoning points.

Rosalie Murphy: Second, there are many alternative ways to finance a enterprise. SBA loans, which Uyen talked about, are backed by the U.S. authorities and issued by banks and different monetary establishments. They have an inclination to have aggressive rates of interest and lengthy reimbursement phrases. Family and friends can also be prepared to spend money on you. Ask for assist and store round to place collectively the financing that works greatest for you.

Sean Pyles: And at last, hold an eye fixed out for brand new income streams. You by no means know whenever you might need the prospect to diversify.

Rosalie Murphy: And that is all we have now for this episode. Do you may have a cash query? Flip to the Nerds and name or textual content us at 901-730-6373 that is 901-730-NERD. You can too electronic mail us at podcast@nerdwallet.com. Additionally go to nerdwallet.com/podcast for more information on this episode. And please keep in mind to comply with, charge and assessment us wherever you are getting this podcast.

Sean Pyles: This week’s episode was produced and edited by Rosalie Murphy with assist from me. And right here is our temporary disclaimer, thoughtfully crafted by NerdWallet’s authorized group. Your questions are answered by educated and proficient finance writers, however we’re not monetary or funding advisors. This Nerdy information is offered for normal academic and leisure functions, and will not apply to your particular circumstances.

Rosalie Murphy: And with that mentioned, till subsequent time, flip to the Nerds.

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