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 areas with dozens of workers — and the way she pivoted repeatedly through the COVID-19 pandemic.
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Uyen Le grew up working in her mom’s nail salon. In 2013, she opened Magnificence Bar, which gives hair, nail and esthetician companies in addition to a full bar. Magnificence Bar now has two Colorado Springs areas and as many as 80 workers when totally staffed.
Persons are additionally studying…
Le’s associate, an actual property agent, prompt they purchase a constructing in downtown Colorado Springs so Le may 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 time and again. As a result of her stylists have been workers as an alternative of contractors, they have been in a position to accumulate unemployment whereas the salon was closed. When hair and nail companies have been allowed to re-start however pores and skin companies 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 fascinated about including wholesaling to Magnificence Bar’s income combine.
If you happen to’re dreaming about beginning a enterprise, Le says, be ready to assist do each job within the firm for a minimum of the primary 12 months. Keep targeted in your area of interest and check out to not examine your self to your opponents. And keep in mind that there aren’t any silly questions — don’t be afraid to ask for assist whenever you encounter one thing you don’t perceive.
- Put together to leap by means of some hoops: You’ll possible have to speculate money and time into licensing, allowing and zoning points, particularly should you’re opening a brick-and-mortar enterprise.
- 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 compensation phrases. However you’ve different choices, too, like family and friends. Ask for assist and store round to place collectively the financing that works finest for you.
- Seize progress alternatives as they arrive: Probabilities to develop your enterprise 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 email@example.com. To listen to earlier episodes, go to the podcast homepage.
Sean Pyles: Welcome to the NerdWallet Good Cash podcast, the place we usually reply your private finance questions and aid you 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: At this time, 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 at present?
Rosalie Murphy: At this time, 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 areas 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. Effectively Uyen, welcome to Good Cash.
Uyen Le: Hello. Thanks for inviting me right here at present. I am so excited to be on Good Cash.
Sean Pyles: We’re so excited to speak with you, and I believe it could be fascinating to start out 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 once I was six, received my citizenship once 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 at school, we have been within the salon. Obtained my license once I was 17, and simply sort of instructed my mother I might 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 faculty. And so, I needed to inform my dad that, and I simply bear in mind him saying, “Then it is advisable be ready to work for the remainder of your life.”
Uyen Le: And so I mentioned, “You already know 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 at present?
Uyen Le: So we’re a artistic mix of full salon companies. We do hair, pores and skin and nails, however we even have a full bar, which we create wonderful, beautifully-crafted cocktails. After which we even have a boutique contained in the salon.
Sean Pyles: Huh. Appears like a enjoyable place to hang around for a number of 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 quite a lot of enterprise folks, particularly businesswomen. So, the joke has at all times 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 let you know one thing. Excellent. You are right here.” So it is enjoyable.
Rosalie Murphy: What went into getting that enterprise up and operating? What was happening behind the scenes whilst you have been working to launch Magnificence Bar?
Uyen Le: So truthfully, 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 at all times 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 true 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 large metropolis dwelling, large metropolis life. So I mentioned, “Yeah. Why do not we try this?” So not solely have been we going to be our personal landlord, the those that personal the constructing, however now we’re additionally opening a enterprise. So it was loads. We had loads happening. So my mother and my aunt was in a position to lend us some cash. However then, my enterprise banker prompt 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 fascinating about Magnificence Bar is that you are a hybrid of a pair several types of companies directly. You have got a bar and also you even have a salon on the similar time. Was that troublesome to start out up? Did you are feeling such as you needed to arrange two totally different companies distinctly, or was all of it sort of bleeding collectively?
Uyen Le: So in a means, we have been each new to all the pieces. In downtown, you’ve zoning, so whenever you’re the owner, you need to fear about zoning. So then you need to put in a zoning allow to see if you’ll be able to even open that sort of enterprise. And so, studying that half, zoning, even your signal, you want a allow on that. So it was actually arduous and was actually rewarding on the similar time. So I realized actually quick and I began speaking to folks. And should you mentioned you have been an proprietor of one thing, I simply begin asking, after which that is how I study. I do not suppose that there is any silly questions.
Sean Pyles: What was the method like getting your liquor license?
Uyen Le: Laborious. Laborious. As a result of normally liquor, they go hand in hand with meals.
Uyen Le: And so we do not have that meals idea, we’ve a service. So we wish to present a service, after which you may get a drink. In order that was actually arduous 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’ve six older businessmen, so there is no lady on the board that understands what a full-service salon is.
And I’ve to maintain reminding those that I’m, primary, at the beginning, 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 earnings is the bar, and if that.” As a result of should you’re averaging one drink per individual, or some folks may get two, that is not loads. And a few folks 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 received to ask, why did you retain pushing for it? What about having a bar in there was so essential to you?
Uyen Le: I at all times imagine that should you preserve placing one thing on the market, then it is going to come. And so, I used to be already speaking about it. I used to be speaking about, “We will have a bar.” I used to be speaking about it to my shopper. I used to be speaking about it to anybody that I knew. So there was no means I wasn’t going to have a bar. And it was arduous. We opened with out the liquor license. And once we did open with a liquor license, we may solely drink on the bar. So then we went to the state. And so one of many board members truly got here down and toured the salon in order that he may perceive. In order that’s how we received our liquor license.
Rosalie Murphy: What does your enterprise appear to be at present? 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 virtually gone up yearly, now that folks understand that we’ve it and the way cool it’s. So not solely that, we began sort of like mixing our service. So if for example you go in to get a hair blow out, if you would like your hair to be sort of messy wanting, 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’ve a reputation and other people know, it is gotten simpler with the bar and it is truly actually enjoyable. The bartenders are enjoyable. They do not know something about hair, and each time we rent them, they’re like, “You positive I will earn a living doing bartending?” And we’re in a position to develop folks, too, in that side. Our entrance desk turns into our bartender. Our bartender turns into our entrance desk.
Rosalie Murphy: Yeah. You have got two areas now. What number of workers is that in whole? 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 at all times sitting on between 70 and 80 workers 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 means of 68, however the service greenback has grown. So I assume in a way, it is a good factor. After which additionally the those that wish to work, they’re actually, actually working as a result of now they’re making much more cash than they might earlier than, and there is extra alternative. And our job is difficult as a result of once we rent them contemporary out of faculty, we spend a lot time coaching. Typically they work underneath our grasp stylist for a 12 months simply coaching, simply studying minimize 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 at all times have a nasty repute for top turnover, and we actually do as a result of how do you develop any person and be capable to nonetheless revenue on the similar 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 take a look at us like we’re very good or make some huge cash, however I can let you know, I’ve those that make six figures in my firm doing hair and nails. However on prime of that, our enterprise idea is difficult and totally 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. Everyone that is within the salon is an worker. We additionally provide healthcare for anybody that qualifies for that. So you need to work with us for 90 days first. After which we additionally do a bonus construction primarily based in your gross sales greenback and likewise trip pay. And trip pay is predicated in your retail sale.
Uyen Le: And the way we keep our buyer and constructed that’s we make investments loads. I’ve grasp stylists that oversee their division, and we’ve leads that sit with each single one in all our ladies and present them their numbers and the way they should develop. It’s a must to keep your clientele. First, they’re the Magnificence Bar shopper. After which how do you flip them into your shopper? And that is a talent as a result of persons are not raised with customer support. It is all about customer support. I believe we’re the one job that basically is six inches away from the shopper. 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 at all times say, “Oh, she will’t minimize her hair straight for something. However man, folks love her as a result of they arrive to see her.”
Sean Pyles: Constructing that relationship is de facto essential.
Uyen Le: Yeah, precisely. That is what I educate all of the younger ladies. 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 your enterprise.
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. After we received shut down, so we received shut down in Colorado for six weeks. So as a result of they’re W2 workers, they have been in a position to get on unemployment straight away.
Uyen Le: So it was very nice, that was one load off of me once I know that my lady was not contracting and that they have been in a position to name unemployment and get on it straight away. That was so, so, so good. That is the advantage of being a W2 worker. So, after which we have been in a position to open. So once we first got here again, we solely had 10 folks. So we had 5 workers and 5 prospects in the entire salon.
Rosalie Murphy: What would you usually have?
Uyen Le: I do not know, 40 folks.
Rosalie Murphy: Oh my goodness.
Uyen Le: Typically 50 folks. So we’re not the quiet, romantic sort of salon. We’re loud speaking, “Hey, can I’ve one other glass of wine?” sort.
Uyen Le: So it is actually, the power is de facto good in there once we’re tremendous busy. So going again to that, we’ve to primary, clear all the pieces out. Then I simply reached out to all the ladies. I mentioned, “Who needs to come back 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 may in all probability do 10 if we double shift.” So we usually open from 9 to seven. So we truly opened from seven to eight in order that we may double shift. So then that went away after which now they open it to this point you possibly can have as many individuals as you possibly can within the salon, however they in any respect time must be six toes aside. And so then we may deliver extra folks 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. Appears like loads to handle.
Uyen Le: And lots of people selected to remain closed, they usually have been in a position to do this. However I knew that if I stayed closed, I might in all probability by no means return as a result of it could simply be more durable.
Uyen Le: I believe when the arduous time comes, and also you simply cope with it again to again to again to again, I believe you are able to do it. However when you’ve an extended break, for example I used to be closed for six months after which reopened till six months. I do not suppose I might’ve had the power 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 your enterprise?
Uyen Le: I do know that I am the face of Magnificence Bar, and other people suppose that it is simply me, that I am the superpower lady, however I am not. I’ve a extremely, actually wonderful staff. And so working by means of 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’ve to drive right here, drive there. Or when it was again up, it was arduous. 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 large bulk. My mother’s storage grew to become our storage, my sister’s storage, my storage. And we have been in a position to simply purchase stuff in bulk and pallets. It wasn’t like COVID, that was going to cease us. However now it was the provision chain.
If we do not have the provision, how may we do it? You are speaking about hair colour. We want 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 fill up. 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’ve to sit down on it, it was going to get used.
Rosalie Murphy: Yeah. What do you suppose the longer term holds for you and your staff and Magnificence Bar?
Uyen Le: So much. I am excited. It received me pondering quite a lot of issues now, as a result of not solely do I’ve an excellent staff, but in addition I’ve quite a lot of loyalty and I may really feel that and I may see that. And I am tremendous grateful in any enterprise that you’ve, I believe when your workers get to the highest of your organization, there is no extra room to develop, however to be their very own boss. I at all times need to make more cash, why would not they need to make more cash? So I believe there’s at all times a cap in our firm. And so with all this, it is opened my eyes. So quite a lot of issues that I can do, just like the scarcity on provides, it received us pondering, “OK, perhaps Magnificence Bar must be a provider. Ought to we open a provide store?” That when our ladies wish to depart us and wish to personal their very own sales space rental or run their very own salon that perhaps 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. In order 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 wanting into opening up a med spa as a result of now we want additional machines to assist us look slightly bit youthful.
Sean Pyles: It makes quite a lot of sense to evolve as your clientele are, as properly.
Uyen Le: Sure. I’ve quite a lot 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 once I was younger to now, they usually wish to be with me, they usually’re beginning to ask me questions within the magnificence business. “Uyen, I actually wish to get this carried out for my bag underneath my eyes. And I am fascinated about this, what can I do?” And so I am beginning to see that. So I do not provide it proper now, so that they must go some other place. But when I provide it, then I can simply transfer proper in. And I have already got that belief.
Sean Pyles: Effectively, Uyen, I might love to listen to what recommendation you’ll give somebody who’s fascinated about beginning a enterprise of their very own.
Uyen Le: Effectively, are they positive? Is that what they actually need?
Sean Pyles: You did not need that at first and then you definately ended up doing it anyway.
Uyen Le: Joke apart. Actually, I might 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 purported to do for that enterprise for a minimum of the primary or second 12 months of the enterprise? And should you can say sure to that, then it is an excellent alternative. I believe that folks do not realize whenever you open the enterprise, you’re all the pieces. You might be actually all the pieces till you’ve that capital coming in to now rent different folks that will help you with that.
There’s quite a lot of alternative out right here on this nation. There’s a lot cash on the market that might be made. And should you can simply give attention to what you’ve already going inside your enterprise, then you are going to be fantastic 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 at all times inform the ladies, “You guys, don’t fret about what they’re doing. We simply have to fret about what we’re doing, and it is going to be fantastic.” I do not suppose it is a competitors. I believe everybody has a unique area of interest, and that is what it’s. That is why it is such an excellent world to dwell in.
Sean Pyles: Effectively, 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, if you’re opening a brick-and-mortar enterprise, you are going to have to leap by means of quite a lot of hoops. Be ready to speculate 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 a tendency to have aggressive rates of interest and lengthy compensation phrases. Family and friends may be prepared to put money into you. Ask for assist and store round to place collectively the financing that works finest for you.
Sean Pyles: And eventually, preserve a watch out for brand spanking new income streams. You by no means know whenever you might need the prospect to diversify.
Rosalie Murphy: And that is all we’ve for this episode. Do you’ve a cash query? Flip to the Nerds and name or textual content us at 901-730-6373 that is 901-730-NERD. You too can electronic mail us at firstname.lastname@example.org. Additionally go to nerdwallet.com/podcast for more information on this episode. And please bear in mind to observe, price and evaluation 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 transient disclaimer, thoughtfully crafted by NerdWallet’s authorized staff. Your questions are answered by educated and proficient finance writers, however we aren’t monetary or funding advisors. This Nerdy data is offered for normal academic and leisure functions, and should not apply to your particular circumstances.
Rosalie Murphy: And with that mentioned, till subsequent time, flip to the Nerds.