Are you overwhelmed by the amount of work on a daily basis that it takes to run your company? Do you want the freedom to do what you want whenever you want?
OWEN: My guest today is Anthony Santini and he’s the owner of Hybrid Salon. Anthony, welcome to the show.
ANTHONY: Thank you. It’s great to be here.
OWEN: The whole goal of this podcast is to get entrepreneurs like yourself who has been able to systematize their entire business so it runs without you, to come in here and share how you did it, so that we can go through that journey of how you actually did it. But before we talk about the experiences you have let’s talk about right now. What are some mind blowing results that you now experience as a result of going through that process of systematizing your business?
ANTHONY: The most amazing thing that I can say is that I don’t need to be present 100% of the time. I really didn’t think that was possible because I’m in a people business but I really don’t need to be there.
OWEN: That’s awesome. How has your company been transformed as a result of systematizing your business?
ANTHONY: It’s passed on a lot of accountability to my employees that really stepped up and taken control of what they’re doing. So it’s allowed them to have some responsibility and leadership in their roles. But for my business itself it’s just allowed it to grow, because I have a chance to work on advertising, publicizing, and getting people to the doors versus doing the work.
OWEN: Wow, that’s so true. We’re going to talk about what exactly your business is in a minute. I’m wondering how has your personal life been transformed as a result of systematizing your business?
ANTHONY: Well, I have wonderful time to do the things I enjoy. For myself personally I’m someone who really enjoys looking into other business ventures. It gave me a chance actually to step away from working so hard. And I found another business to invest in, and another business to start. For me it’s given me more time to create more income for myself and more growth.
OWEN: Yeah. I think during the pre-interview you mentioned as a result of systematizing your business you’re able to acquire another salon and now you’re in the process of opening a beauty school just so the listener knows what you’ve been able to achieve. And so I’m wondering now since you have systems already in place that allows the business to run without you. What will you say has been the longest time you’ve been away from it?
ANTHONY: I’ve been away from the business for a couple of months now toward the beginning of the year we started this systemizing process. But I ended up coming down with a back injury that has taken me out of commission for a number of months now. I’ve only been able to stop in the salon a couple of times just to answer some questions. And I’ve been doing everything from afar. So remotely I’ve been able to keep everything running which is amazing especially since I can’t be really physically active right now.
OWEN: Sorry to hear that but that’s just the testimony of systemization meaning that you’re able to systematize it and you have that injury and not able to come to work but it still runs without you. Literally, that’s what’s happening.
ANTHONY: Yes, and I have been able to continue to have an income because of that. It’s great.
OWEN: Let’s now give the listeners some context as to what your company’s all about. What exactly does your company do and what big pain do you solve for your customers?
ANTHONY: We’re a people business. I own a salon. A hybrid salon in Madison, Wisconsin and I also own Tanglz Salon in Appleton, Wisconsin. I’m in the process of opening the Salon Professional Company in Madison.
OWEN: The Beauty School, right?
ANTHONY: Yes, that’s correct. It’s kind of completing my full circle so that I can be a full-on cosmetology career strategist. I’m starting students out and then giving them a career path to follow.
OWEN: We’re going to talk about why you decided to do that later on in the interview. But you’re talking about what the current salon does for people?
ANTHONY: What we do is the guest experience. It’s about people come to have beauty services done, whether it be a haircut or calling services, or waxing services. It’s all about what happens when they come through the door. It’s the experience that that’s created for the guest and it’s how we service them within the salon.
OWEN: How many full-time employees do you have?
ANTHONY: I have nine now in Madison and I have two full-time employees in Appleton and two part-time employees in Appleton. But because Appleton is a rental salon I have 21 renters there.
OWEN: What does that mean a renter salon, I’m just curious.
ANTHONY: Rental Salon is a place where the stylist will rent space from me. So they’ll rent their chair, and the station, and the work area, and really performed their own business. Whereas in Madison it’s a commission-based salon so those are all my employees.
OWEN: Okay, I’m glad explained. Is the company profitable and what was last year’s annual revenue and probably what do you expect to generate by the end of this year?
ANTHONY: Yeah, it is profitable. Last year we were just over 750,000 combined with both salons. This year we’re looking at a minimum of a 15% increase.
OWEN: That is awesome. Here’s the thing, we’re talking about what you’re enjoying right now as a result of systematizing your business. But let’s go back to when the business was not systematized and automated like it is now. What was wrong with it at that time?
ANTHONY: Oh my gosh, it was a little bit of a nightmare. We had some issues dealing with some of customers as far as the experience over rent. For instance, one of the things that happened especially at the front desk. There were some problems with checking issues, booking errors that were continuously happening, and customer service issues. Once we systemized that front desk we were able to really keep things on track.
OWEN: Back when the business was not even systematized what was the lowest point and can you describe how bad it got?
ANTHONY: I’m just going to give you an example specifically with the stylist. We didn’t have a handbook in place at the time. I had people calling in sick. I had retail that was not being accounted for on the shelf. I had customers coming in for the wrong appointment times. It’s a really scary thing when you have seven people servicing other people and things going wrong because the person that ends up being responsible is ultimately myself.
OWEN: Basically the stylists are just making their own decisions for how things should be run in your company. And basically the experience is not the same for the customer.
ANTHONY: It’s very true. I even had one stylist at a point changing her pricing in the computer because she felt like she wanted to change something different. I caught it because I like to look at those things, but it took a couple of weeks before I found out.
OWEN: She was discounting the prices for her friends?
ANTHONY: Oh yes. Not a good thing.
OWEN: Yeah, I totally understand that. Do you remember one specific point that was your breaking point that made you decide, “I can’t do this anymore. I have to change around my business and get it automated and systematized.” What happened?
ANTHONY: I do. I had a business partner for a while and she was incredibly micromanaging and it became very difficult. She used to have control over everything that happened in the salon. I was away on a business trip, this is back in 2010.
OWEN: I’m wondering why was that bad though because the systemization is to have control and give people the ability to take the systems and run with it. Maybe I’m playing devil’s advocate too much, but what was wrong with that?
ANTHONY: She couldn’t let go. She couldn’t just let the systems do their thing and run, so what happened is it created fear within our stylists because she was constantly on them about things. You’re not doing this right, you’re not doing that right. And even though they were trying to follow all the systems she wasn’t allowing that to happen. When I came back from this business trip in 2010 they sat down with me and the stylists. “If she doesn’t we’re going to go.”
OWEN: That’s just so true because people say they get hired by a job but they leave because of a manager. In this case they leave because of the boss.
ANTHONY: Correct, totally true. I needed to get these systems in place and have this set-up because she was going to be gone then I needed to allow them to at least take some control of what they’re doing but also follow a procedure. And because we didn’t have all of it together all the time I realized now that it’s all, it has to be put together. We need a handbook for the front desk, we need a handbook for the stylist, we need job descriptions, and we need retail inventory systems. And so one by one I started putting these things together.
OWEN: And just so the listener knows you mentioned that when you had to deal with the partner you had to buy the partner out. So that wasn’t as easy as we’re making it look, right?
ANTHONY: Yeah. It was a very difficult situation. It’s hard when you’re working with one person, you have 50%-50% interest in the business and you have to buy a person out. That’s a whole legal issue that could be another entire podcast.
OWEN: I totally understand that pain. Now that you realized what the issue was back then what was the very first step you took to systemize your business?
ANTHONY: The first thing I did was I created a training system. I reached out to a business group called the salon summit business center. They have a lot of wonderful training manuals and things that I could work. So I started creating one that was specific to our salon and it included all of our rules and regulations, any job descriptions, what was expected of the employees, what was required of the stylists. And then I created another one specifically for the front desk.
OWEN: During the pre-interview you also mentioned that when you were creating these training systems you’re actually dedicating one person to do the training rather than multiple people, why?
ANTHONY: I did, yes. That’s for consistency. The important thing here was to find the one person that was going to be the trainer and the person that was kind of helping everybody around. So I pulled him aside and talked to him about this. He got on board, and so I really made him kind of the point person for that. Because if you have everybody going to different people then everybody’s ideas are going to start getting involved in what’s actually supposed to happen. It needs to be consistent and it needs to be the same message coming from one person.
OWEN: How do you identify that that was the right person to be the trainer within all your employees? What made you say this is the person?
ANTHONY: I could see in him, he was following all along exactly what I was putting out there for information.
OWEN: He was a details guy.
ANTHONY: He was mimicking what I was doing. He was helping people. That’s the kind of person that you want to be a trainer, someone that wants to help someone else. This is what it’s about.
OWEN: What was the second step you took to systematize the business? I think you mentioned something during the pre-interview about creating monthly meetings with everyone, stuff like that?
ANTHONY: Yes. This is a huge deal, because once you create a system you have to have a checking process and find out what’s working…
OWEN: Like a follow-up, right?
ANTHONY: Absolutely. What we do every month is I have one on one meetings with my staff. We set goals in those meetings. We talk about any roadblocks that they may be running into. We create solutions for those roadblocks and then we set new goals. It’s the chance for me to hear from them directly on what’s working, what’s not working, what do we need to change, and to make sure that they’re on-track.
OWEN: I think you also mentioned how by having meetings you were able to catch anything that could easily become a new habit that was going the wrong direction because you saw it ahead of time. Can you talk about how… Do you know what I’m talking about?
ANTHONY: Absolutely, yeah. The thing about checking in with the systems and how people’s goals and such are moving for them is you do find if someone’s picking up a bad habit. A bad habit, it may be a service habit, it may be a pricing habit, it might be just the way that they’re working with their co-workers. If these things are allowed to go on for too long it does turn into a habit and it’s very hard to reverse that once it’s become part of someone’s job.
OWEN: So you’re [Unintelligible 00:12:02] so to speak?
ANTHONY: Immediately. You don’t want to let that stuff go.
OWEN: What other steps did you take back into systemizing the business?
ANTHONY: Well, we did some systemizing with our marketing. In the salon industry the best way to market is by word of mouth. We implemented a consistent referral program. We do percentages off for the person that is referred in, and then also a percentage off for the person that has referred them.
OWEN: Okay, like a double sided, benefit referral program? Okay.
ANTHONY: Yup. And then we use different types of materials for that, so just postcards. We use social media quite a bit, and just making sure that we’re staying in touch with people on a regular basis.
OWEN: That’s awesome. Back then you have so many things come at you at the same time, you’re trying to systematize the different aspects of the business. I was wondering how did you prioritize what order of steps you take. How did you decide which systems to create systems for and which ones to create systems who are next? Do you understand what I’m saying?
ANTHONY: I do, and it’s a great question. Because I work in the people business the most important thing was the people, and that had to be my priority. Everybody needs to be in order before we could start adding off little details and to make things run even smoother. Before I changed everything around I want to make sure everybody was on the same page. So job descriptions, monthly meetings were the most important thing to start with.
OWEN: Okay. So you made sure that the part that had to do with your customers, because this is a people business, you started with that first. And then getting all your employees on board knowing what their specific roles were and stuff like that, so job descriptions and procedures and processes for them. ??And I think you mentioned something about promotions happening or products being introduced, what is that?
ANTHONY: Yeah, after we got the systems in for the employees and job descriptions then every month as we had our meetings we started adding in more, We would start talking about what promotions we’re going to be having for the month as far as products or services, what new things were going to be introduced, new products to be introduced. And then we’d add any of that ?into the system so that the staff would get it. But again, it was more important to make sure that they understand the core of their job before we start adding all of these little extra sales items that are going to help people out.
OWEN: I totally understand. Back then, how exactly did you document procedures and processes for your business? What tools did you even use?
ANTHONY: I found that Word was the best way to do it, using a Word document. What I did was I would type up the original handbook and then as things changed I would have my employees do it. So especially for the front desk, the word document will include all of our policies or job descriptions, and then anything that we do in the salon. And then at the front desk we would have a separate handbook that was also done in Word. Anytime we change or enhance something I would have my employees type it in.
OWEN: You’re not scared that they might go ahead make changes and mess up the other things that were in there and making a small change? I just to understand what measures you put in to make sure that when they make changes they don’t blow up the other things that are in there.
ANTHONY: The only time they got a copy of the editable handbook was when I sent it to them and then I took it back and checked it. So, I didn’t just let them do it. It’s a check process.
OWEN: I’m thinking, like my listeners now, you want me to give them my procedures and processes and you have no control of what they put in there, this get messed up. I’m glad you mentioned how you put that check to make sure that they make changes but you have the final say of what goes in and all that based on the changes. At that time when you were working on the systems and automating your business, what books or mentors had the most influence on you and why? I think earlier you mentioned the Summit Salon. How did you find out about these people?
ANTHONY: Yeah, the Summit Salon Business Center, it’s a group that I learned about through my distributor sales consultants. This is really what they do. They help salons create systems, job descriptions, and training programs. And they were a great resource for me to get some of this information. But even beyond that I tweaked a little bit of it because it’s a really great, general overview of a nice salon system. But it depends upon your culture in the salon. I my culture in the salon they’re very driven people, they’re not going to just wait for something to happen and they want to have access and information and seems to get it. So I had to change a little bit of the that. I will say one more thing on that point. Having the right mind to set is incredible.
ANTHONY: Because you really have to be able to say, “I’m going to push this away from me and I’m going to have my people have accountability, responsibility, and do their thing. And then trust that you have it set up in the way they can. And you do have to have some trust in that and belief in that. You have to let go a little bit.
OWEN: And we’re going to talk about some of the challenges that you struggled with next because at the end of the day if we just talk about the beauty and benefits of systematizing the business and how you did it. And we don’t talk about the challenges that you actually dealt with while you’re trying to do it. And we don’t give the full picture. Starting out, what will you say is the biggest challenge you experience when you initially tried to systematize the business and how did you solve it?
ANTHONY: The biggest thing I had to deal with was getting my employees comfortable with me not being there as much.
OWEN: Why was that a problem to them?
ANTHONY: I’m a big time mentor so I love helping people. I do everything I can to support them. What that created was a lot of, “Let’s go to Tony to find out what we needed to do.
OWEN: A dependency, yeah.
ANTHONY: A dependency, absolutely. When we started systemizing things it was kind of taking me out of the picture and I really had to push them away from me even though they wanting to come to me for answers.
OWEN: I think you also mentioned that even when you’re started pushing them away they sent you a lot of SMS text, right?
ANTHONY: Yes, it’s true. I do like to be available for people but it got kind of ridiculous after a while. Every time they had a question about color or product they were sending me these texts. I’m like, “I’m not there. I need you to go to the manager.”
OWEN: Okay. How did that help them? I know they must have had some push back from going to meet the manager but how did that eventually get to the point where that now became the default instead of coming to you or texting you? The manager now was the first of port of call.
ANTHONY: What I found is that you have wean them off. You can’t just all of a sudden say, “I’m not going to help you anymore.” What I did was I would refer to them to the manager with easily solved problems. With stuff that maybe a bunch of questions about a product. Or maybe it was a question about a booking situation with the client and I would just do it one by one. Eventually we started getting to the hard stuff like formulation questions or a new client question. And then little by little they realized, “I can ask the manager and he can give me the answer, and he’s right here.”
OWEN: Awesome. What was the second biggest challenge you experienced when you initially tried to systematize the business and how did you solve it? I think one of them was something to do with the guest communication?
ANTHONY: Yes. It’s been about 6 months or so, we have gone to email confirmations instead of calling everybody, which has been fantastic. It takes the time away from the front desk having to deal with that and the phones aren’t ringing quite as much. But the problem is that we had to get the front desk into a really great habit of collecting everybody’s email. And so what was happening for a while is that the emails didn’t get typed in correctly, or we didn’t get everybody’s email. Sometimes the confirmations wouldn’t happen and people wouldn’t show up, or they weren’t getting their confirmation. They would be upset about that. It took a few months to get over that hump of everybody being on board with that. But it’s great now.
OWEN: I can actually see that whole issue of scheduling being a big issue for you, especially if this is a people business where you’re actually expected to show up and you’re planning around your time around when they’re showing up and stuff like that. I definitely understand that.
ANTHONY: Yeah, it’s a big deal. Everybody’s income is depending upon that, the stylist, the salon, and mine.
OWEN: I’m wondering, am I making that out to be a much bigger deal than it is? I’m just looking from the outside thinking but you correct me if I’m wrong.
ANTHONY: It’s a huge deal. If you don’t have it under control in a way that people are held accountable for not showing up it can be a big problem. Because every time someone doesn’t show up my stylist don’t get paid, and the salon doesn’t make any money. So it’s really important that you have a good system in place to make sure that you get these confirmation emails, or calls, or whatever you need to do to get people in.
OWEN: You mentioned that you had ongoing training for the front desk. So that was the challenge and you mentioned some of that. But then you shared a story about how somebody, one of the front desk staff didn’t like the way they talk. You tell the story.
ANTHONY: Yes. I looked back at it and it’s kind of funny now but I had this person at the front desk for a while and we have a tour that we give to all of our new guests. They come in. They get a drink and we take their coat, and we give them a tour of the salon. The tour is designed for people so that they know other services that we have to give them, and also we have promotional cards and such. I went into the salon one day and one of my stylists was like, “Are we not doing tours anymore?” I said, “We’re doing tours.” She’s like, “Well, so and so at the front desk isn’t giving tours.” I’m like, what? Another reason that you keep checking up. I went to her and I’m like, “Are you doing tours at the front desk?” And she’s like, “I didn’t really think it was important.” “Oh my god, this is not your decisions for one.”
OWEN: What is she doing instead of doing tours?
ANTHONY: She was giving them drinks, taking the coats, and introducing them to the products but she didn’t really like it. I don’t care if you like it. It’s part of the job.
OWEN: Wow, that was a funny story.
ANTHONY: But it just goes to show too that when all of your employees understand what’s supposed to be happening, they’re going to call each other out on it.
OWEN: I think the importance of that is not only understanding what’s supposed to be happening but why it should be happening. And correct me if I’m wrong. Because the stylist knew why those tours were important that’s why she was able to note that it wasn’t working and call it out on it.
ANTHONY: That is exactly right. You have to tell the people why you’re doing what you’re doing. It has to make sense, it has to come to our place that’s going to be helpful to them so they understand what the process is for.
OWEN: What other challenges did you experience when you initially tried to create systems for the business. I think you mentioned something about something to do with retail. What is that?
ANTHONY: The reason is one product that we sell to our consumers and customers that come in. It’s an automated system to a point, the aspect that we have. An inventory system where you can check the product in and check the product out.
OWEN: Okay. So make sure that when you take the product you check it in… Okay, go ahead.
ANTHONY: Right. I’ve been trying to teach my front desk person how to do that. But we have had a couple of challenges with that over the years because getting the stylists comfortable to check these products in and when they’re used instead of just throwing them away. Because they would use the product, and then it would be empty and they throw it away, it wouldn’t get checked in. So we didn’t have the product when we did the order. And we would be missing things and I would be running into the store and I just got to be this whole jumbled situation. Another one of those situations where you have to kind of keep track of everybody for a while. When you change something or you add something new you really have to keep bringing it back to what we’re doing. We need to check the products in. Here’s what happens if we don’t check the products, it’s important because we’re going to run out of things.
OWEN: Of course. I get that because especially if you don’t have their products then someone comes to do their hair expecting to get it done and you tell them that you’ve run out of shampoo or something.
ANTHONY: Yeah. You lose the sale, everybody loses income, and you don’t want that to happen.
OWEN: Yeah, definitely. And so you used to do that with checklist, basically having them check… You mentioned that you did something to actually solve that problem of the checking of the inventory.
ANTHONY: Yeah, so what I have now is I have them just bring the product to the front desk as soon as it’s empty. Anything that’s empty goes to the front desk. The front desk person checks it in the computer and that goes on our order sheet.
OWEN: Okay. Given all the challenges you mentioned earlier why did you even stay committed to the goal of systematizing your business?
ANTHONY: I have a long term goal here. Part of my long-term goal is to eventually not have to work.
OWEN: You and me both.
ANTHONY: Right, and I think most people. But the thing is when you’re self-employed and you’re running your own business the only way that that’s going to happen is if you can find other people work for. And I knew this and I knew that I needed to figure out a way that that was going to happen. And it needed to start right in the beginning. Even though these challenges have happened I know that businesses are systematized. And I know that other people don’t have to go to their businesses. So if I could do it for my business then I am getting closer to my goal.
OWEN: Awesome. At what point in this story, because we’re telling the story from the past. At what point in this story did you realize that the business was systematized and it could run without you successful?
ANTHONY: Hybrid Salon in Madison, I realized this at the beginning of the year. Can I just give you a little explanation on why this happened?
OWEN: Of course.
ANTHONY: Last year in July I got a phone call from the Salon Professional Academy of this franchise and they asked me if I’d be interested in opening a school in Madison. And I have long-term connections with this group because they’re connected to Redken and I did consulting and educating for Redken and for many years in the past. At that point I realized, “Okay, we need to get everything so streamlined that I’m not going to have to be here. Because if I want to open this cosmetology school. I can’t be working in the salon.” And so from that point I started kind of introducing more and more things to each of my stylists. And at the beginning of the year I made a decision that I was going to step away. Even though the school wasn’t open yet I decided we’re going to do this so I did. The Hybrid Salon in Madison, it was fairly recent, I stepped away. Tanglz Salon in Appleton, I acquired the salon two years ago and this salon I systemized right away. This salon is two hours away so it wasn’t even physically possible for me to be there on a regular basis.
OWEN: The condition was like it has to be systematized based on the situation.
ANTHONY: Absolutely. I trained all my front desk staff immediately on how to do the retail, how to order the retail, what their job descriptions were. I had a front desk manual written up immediately because I had known about these things prior to the Hybrid Salon. We got that set right away. I only go there once or twice a month now.
OWEN: And the Salon Academy?
ANTHONY: The Salon Professional Academy is going to be systemized immediately. It’ll open with systems in place. Each employee will have a specific job description. I have a complete operations manual. I would with the franchise. So I’m going to take part in it for the first number of years just because I do believe that you need to put yourself into what you’re starting until you get to running to a point where you’re safe to step away. But the idea here is not for me to be working in there full-time.
OWEN: Let’s talk about what are the different parts of your business and their specific systems that you have in each part. So let me make this question clear. Think of your business like a conveyor belt. They probably need to go to a party or whatever and they think of doing their hair. Maybe next week they need to go to a party so they need to get their hair done before then. And then at the other end of the conveyor belt is they come to you guys. And you guys have made them look beautiful and they’re out there raving about you guys and referring you guys customers. But behind the scene is this conveyor belt where they touch different parts of your business to make that transformation happens. So let’s share that to the listener. What’s happening behind the scenes.
ANTHONY: Okay. So that’s great. With new guests or new clients specifically, when they come in there’s the big welcome. I’m just going to walk you to the entire process.
OWEN: Please do.
ANTHONY: Okay. It’s a big welcome. We take their coat, we give them a beverage, and a consultation form. The consultation form is designed to help the stylist or the service provider better understand what their needs are. After that happens the front desk just kind of keeps an eye on them and then when they get ready to be finished with that we give them a tour. This is where they handle all the promotional cards. They explain to them the different areas of the salon, the different services we have to offer. We show them our beverage bar, our restrooms. And at then at the final stop in the front we talk to them about the retail and then what our credit promotions are. This gives the guest a feeling of, “I can be here and make myself at home now because I didn’t know what’s going on.” The service provider then takes it from there. So then I have this with the front desk and then the service provider comes in. It’s a big welcome, handshake, and then they bring them to the chair and they have the consultation. And the consultation is designed with specific questions so we knew exactly what this guest needs. So it’s giving the stylist an idea to figure out. And I’m trying to think of the products that this person is going to need, what types of services they’re going to do. Even if they’re not asking for these services the service provider through the consultation will be able to pull that out of that.
ANTHONY: And each service or stylist has a menu, a specific price menu for the guest with their consult form. And it’s hugely important because pricing questions need to be addressed before the service happens. You can’t have the guest go to check out and have sticker shock. It’s just not okay. We go through that process and then we have a preparation portion of the service, the actual service that happens. And then we have a teaching portion of the service where whatever service is being performed, the stylist talks about how do you maintain this at home or products that need to be used. And then finishing the service so that the guest looks amazing on their way out. That’s something that my stylists are top of that entire system. So from that point we have a checkout system. And this checkout system involves both the front desk and stylist. There are service tickets that we have each service provider fill out the beginning of the day. And then when we go to the front desk check the guest out. We have them re-book their appointment first. We ask them if they have any questions on retail or any products that were used. We talked about the referral cards. Ask if they have any special occasions coming up for gift cards. And then we close with a thank you and send them on their way. But we don’t take payment until they end because once you take payment you’re done. The service is over. And these things that happen prior to that, the re-booking, the retail, the referral, the gift cards is what our business is run on. It’s what keeps are business going. Those systems have got to be in place.
OWEN: So you take payments after, this is when you’re getting them to know the referral program and all that before you take payment?
ANTHONY: Oh yeah, absolutely. You need to be able to discuss those things ahead of time. Because once you take payment from someone they kind of check-out.
OWEN: The transaction is over.
ANTHONY: They’re not really paying attention anymore. So you want to get that stuff in ahead of time. Due to that we have a 60%-75% re-booking situation which is great. Because that’s money that’s already in your books in the future.
OWEN: Can you share a little bit more details about that referral program that happened before they pay because my listener might be, “Wow, I love this owner here.”
ANTHONY: Yeah, absolutely. The referral program as I mentioned, we use a percentage. We give the person who is referred in 20% off their complete purchase, complete services. And then when we give the person that referred to them in 20% off their next services.
OWEN: How is that tracked. I’m just wondering.
ANTHONY: That’s tracked in our computer. We have notation areas. So when our guest books an appointment we call the client card pops up and we’ll say in there 20% off referral. Referred someone in for 20% off and then that gets erased every time they use it.
ANTHONY: We have one guest in particular and I just love this story. She has referred in so many people I don’t think she’s ever paid full price for her services.
OWEN: I would to ask that, if you put a guard like how many… But it’s good that you don’t do that, that way she can keep referring because she’s your evangelist out there.
ANTHONY: Yeah, she has incredibly built one of my stylist clientele. So if she wants to have 20% off every time then you just keep doing that.
OWEN: She just asks 5 customers and that’s a free haircut.
OWEN: I love that. Before I even move forward to that, one of the things that hit home for me is the word you say, consultation. The stylists are consulting with the people that come and sit in the chair. I have to cut my hair twice a week. I don’t think I’ve ever had a consultation. They just ask me what number. I said number 10, or whatever. I don’t know what number they use. That’s it. That’s the most consultation that’s happened. I can see how that changes the experience from just cutting your hair or [Unintelligible 00:34:03] your hair, or whatever, to an actual experience where you’re trying to make a person beautiful. I love that.
ANTHONY: Absolutely. This is how we get a good result. Don’t you have a guest coming to you over a long period of time. You want to continue to re-consult because people don’t always tell you, maybe their lives have changed for instance. Maybe they don’t have that time to do what they were doing before with their hair. Maybe they don’t have the money to keep it up like they used to. Maybe they are interested in something in new but are just comfortable with what you’re doing they don’t even talk about it. So, in the consultation it brings all these points out. I have a number of guests that after the recession hit strong in 2008 they had to stop coloring their hair as much. Instead of having them have to go somewhere else that’s cheaper I just adjusted my color application in a way that they could let it go longer between appointments.
OWEN: Awesome. What systems do you have in place now that enable your employee to know exactly what they need to do. And so, you mentioned some of them already, the training program… Go ahead, talk about the other ones that come to mind.
ANTHONY: The training program, the associated program when someone first starts they work with one specific stylist to learn from there. And then that’s how they learn how our entire system works. But on top of that we have the employee handbooks so they always have a reference point. Whatever questions they may have they can go to that point. How many days do I get for vacation? How much time can I take off? Do I get personal days? Do I get sick days? It’s all in the handbook. So if there’s ever a question I really try to refer people to that as much as possible.
OWEN: One thing that you mentioned during the pre-interview that really stood out to me was you mentioned how you hire people with minimal or no experience. That kind of sounds scary but why?
ANTHONY: I do. And there’s really good reason for it. In the salon industry when someone has been doing hair or has been a service provider for a long period of time they have to develop…
ANTHONY: Yes, they have developed what works for them and the way they like to do things. That is a very, very difficult to change. In my salon, because we have these specifics systems and structures that help the salon grown and keep everybody working it’s very difficult to bring someone in that has had a lot of experience and expect them to change because they won’t. I have hired people with experience and they’re no longer with me.
OWEN: I like that, because now you basically are in control of the growth and trajectory because you’re basically putting the right person on the boss. And as long as they fit that more for that role that you’re in they can actually deliver by following the procedures and processes that they have in place. Speaking of that I think you mentioned something about how you had a full-time desk employee who you had to move to part-time and change positions. Speak on that.
ANTHONY: I did, yes. And this is somewhat of a difficult thing. She’s a very nice girl. Very bubbly, good personality, but she wasn’t meeting her job requirements and she wasn’t meeting the goals that were set for her. So the great thing about having a handbook and having systems is that when I have her monthly meeting with her I explained what was going on. It was not me coming from a place of being emotional it was just simply saying these aren’t things are not being done. And it’s been having for a while now and I need to let you know that I have someone else that can do these things that you’re not doing. So I would like to keep you but I would like to shorten your time and keep you in a limited area.
OWEN: I like that too. It’s not personal at this point is based on real facts. If she knows what the role is, it’s not the right fit for her so you can move her to another position and start [Unintelligible 00:37:49]. How do you track and verify the results delivered by your employees?
ANTHONY: This is what our monthly one on one meetings are used for. There are specific amounts of services and retail, and referrals, and pre-booking, and such that each stylist has to meet. And we have a level system in the salon. When someone starts there they’re at an entry level position and they can continue to move up. And as they move up their price is increased, their commission increases, and their pay ultimately ends up increasing. But these goals are all tracked on a monthly basis so I can see exactly what’s happening. They know again too what’s happening, what’s working for them, what’s not working for them, and what they need to adjust in order to make those goals. So as they talked about the front desk position being held accountable due to just pure facts. It’s the same thing with the stylist position. It’s a performance-based position. If you’re not meeting the goals you need to meet I can’t move you forward within this company.
OWEN: I like that. Now, since you have all these free time which areas of the business do you focus on now and why?
ANTHONY: I focused mostly on marketing and PR because I need to get people going getting into my salon. I need to get my stylist chairs full, I need to hire more staff, I’m opening this cosmetology school so I need to be looking for students. My salon in Appleton, I need to make sure that the chairs are rented. So I need that time to do these things. That stuff that I haven’t been able to do. One of the really neat things that I’ve been able to do lately is I’ve been doing high school visits for the last couple of weeks for the Salon Professional Academy and it’s sparking interests with the students but it’s also given me a chance to talk about entrepreneurship and non-traditional career paths with a lot of students that are getting ready to graduate.
OWEN: One of the things I like about the fact that you’re creating that school is you can actually identify the cream of the crop and get them into your system that you know already works.
ANTHONY: That’s the plan.
OWEN: I love that. Correct me if I’m wrong but what is the next stage of growth for the business? What do you plan to achieve next or why? And I’m wondering part of the goal of you creating this school is just so that you can get more franchises and identify the right people to go in there. I’m just trying to understand what’s the next stage of growth.
ANTHONY: That’s totally what it is. It was a realization that came to me when I got this phone call about this academy that I would have the opportunity to basically grow my own stylists. They will learn exactly the same techniques and systems as I use in my salon. So when the top crew are ready to get done with cosmetology school I can hire them.
OWEN: Okay. Is it more of a thing where you’re just building more of the brands or you basically owning it, the companies and they’re just creating different branches? Or are they going to be more like franchisees or something?
ANTHONY: I haven’t fully decided on franchising the salon.
ANTHONY: My best case scenario would be to have shareholders and multiple slots.
OWEN: Okay. The good thing is the idea is bubbling now and as you go it will become more concrete. I love what you’re doing. It sounds exciting. Now that we’re coming to the end can you summarize the entire step-by-step that the listener will have to go through in order to transform their business so it runs without them successfully, based on what we talked about so far.
ANTHONY: Yeah, absolutely. The first you need to do is you need to look at every job position that you have and put together a training program for it. The reason why I say this is you’re going to have turnover. People are going to come, people are going to go. And sometimes, especially in small businesses you might have one person that’s doing that entire job. And if they decide to leave you’re going to have an empty spot that needs to get filled immediately. By having a really solid training program that multiple people understand, you can bring someone on board and get them up to speed in a very short period of time. And then adding all the delightful, different parts of it that are going to make it even more beneficial. But you want to be able to get them going right away.
OWEN: That’s awesome. What is the very next step that the listener who’s been listening to this all the way to this point should take in order to transform their business so that it runs without them successfully. What would you say is the very next step?
ANTHONY: The mentorship program would be next. Once you have these training programs in position you need to identify the people in the company. They’re going to be able to train who’s… As I mentioned earlier in the beginning my stylist right now is managing. He also does training and I could see he wanted to help people. He wanted to help people grow and make them better. He was a good person for a trainer. It’s a big safety net.
OWEN: I guess what you’re saying is basically identify your details guy or details gal.
ANTHONY: Yeah. And then you need to have someone on board as well and that’s going to be there to stay. Identity these people too. You want to treat them well, you want to give them perks, and you want to give them reasons to stay with your company and ways to grow. I will tell you for myself, the salon that I left that I was working at was because I couldn’t get any further. I had ideas and things that I wanted to do, and ways to grow the salon, and they wouldn’t let me do it. So I left.
OWEN: I totally understand. Is there a question that you were wishing I would’ve asked you during the interview that I didn’t ask you. It can be a question with systematizing the business and it doesn’t have to be, whatever you think would bring additional value to this conversation that I didn’t ask you yet.
ANTHONY: Let’s see. A question that I think would be good to ask. What’s your long-term goal.
OWEN: Okay, what’s your long-term goal?
ANTHONY: My long-term goal is to be stable for myself financially, mentally, physically, and to do that you have to have money. It’s the way it works. It’s freedom in the United States. You’ve got to have money. So creating something that’s going to be able to do that for you is ultimately my goal. But the other part that plays into that is helping other people get better at what they do and grow.
OWEN: What is the best way for the listener to connect with you and thank you for doing the interview?
ANTHONY: Oh my gosh, I love returning emails and giving messages on Facebook. My best contact is email@example.com. I’m also on Facebook under Anthony Santini. I have a lot of guests that like to connect with me through Facebook. But for sure, feel free to shoot me an email. I would love to hear from people.
OWEN: Now, I’m speaking to you the listener, thanks for listening to this interview all the way to this point. If you’ve enjoyed this interview like I did, I enjoyed it myself. I’m sure you can tell by my voice, please go and leave us a positive review on iTunes. And to do that go to sweetprocess.com/iTunes. And while you’re there make sure that you subscribe to the podcast because you basically would know any time we have a new episode. And if you know another entrepreneur who will find value from this interview, please share with them so that they too can give value from it as well. Finally, if you’re at that stage in your business where you’re tired of being the bottleneck and you want to get everything out of your head so that your employees know what you know, well, sign-up for a free 14-day trial of SweetProcess. Anthony, we’re done.
ANTHONY: Thank you so much for having me today Owen, this has been great.