It’s now been 5 years since our company started work on it’s software for salon suite management and their tenants, and over two years since we hit the market with our platform. If you aren’t yet familiar with the salon suite model, salon suites are buildings/locations where independent business owners rent private rooms, which typically include sinks and beauty salon furniture. This model is now evolving and you are beginning to see chiropractors, dentists, physical therapists, and many more jumping ship from employers or costly building rent, etc. and finding their business home within these locations. The model, which some say started in Ohio or Texas (it depends on who you are talking with), is now seeping out of the United States and going international.
I’ve had a front row seat watching all of this unfold and it is exciting. Having worked for both first-time salon suite owners who are excited about their new endeavor – to the owners and management of the largest names in the industry, it has afforded me the opportunity to see just how big this movement really is and how it’s not only disrupting the current beauty salon model, but also creating a new eco-system of newly self-employed business owners. In other words, this is much, much bigger than just hair dressers and nail techs.
As for our company – we just happened to be the first to the party with the solutions to the problems. Over five years ago, my business partner, Tim Hauser, came to me with the idea to create a mobile app that would help the business owners within a suite location market themselves. Ironically enough, both Tim and I went to salon suites to get our hair cut and I immediately latched onto the idea. Having bottomed out at my last two startups and burning through idea after idea, I was trying to find the next opportunity, when Tim asked, “Have you ever heard of a salon suites?” I was sold at salon suites. Having gone to salon suites to get my hair cut for a few years, I knew a little bit about them. I also knew that the person that cut my hair used a paper calendar, only took cash, and would often get my appointment dates wrong. It just clicked; location owners could offer their tenants salon suite business software as an amenity for being a tenant, which could help them both manage and market their business. It’s a win-win for everyone.
When we first got into the game, salon suite management were typically using costly over-the-top apartment property management systems or Quickbooks to collect their weekly rent from tenants and never-ending spreadsheets to track tenant info, etc.. It was not unusual to speak with an owner of a location and have them tell me about having a hard-time keeping track of rooms, rent, and licenses. On the flip side, the tenants had their challenges as well. Some are veterans with full calendars of repeat clients, while others struggled to pay their weekly rent due to empty calendars and little hope of turning things around. You’d also see some that used paper calendar/appointment books, while others would use monthly subscription-based booking apps, which as I saw it, offered them many downsides with the monthly cost being one of them. So, we started to talk with both groups, management and tenants, and began to collect feedback, suggestions, and started work on our salon suite technology. This wasn’t going to be just a marketing app. It was going to be much more.
It actually doesn’t feel like yesterday that we started work on the product. It has been a total uphill climb. That’s just the reality of software startups. It’s a grind. You build. You fix. You pivot. You build. You fix…and so on. In our case, not only were we building two separate systems, one for the management and one for the tenants, but we were also having to get to a minimum viable product for both parties to even be able to use it. We’re talking about thousands and thousands of details that we had to learn via trial by error. However, that’s the nature of the beast and today we are still plugging away, and with the core of our platform where we want it, things are about to get real fun.
So, what’s next for the salon suite model? Well, the model does have it’s downsides. First off, you can only build so many of them in an area as with any business. Today, there are many places that are totally saturated with the model. With saturation, you are already seeing owners who once boasted about hand picking their tenants (“I’ll only take tenants who can prove they have the clientele…”) who are now having to accept tenants that are straight out of school. Tenants retire. Tenants have more options. Herein lies one of the biggest problems.
Most new tenants are first time business owners. They typically don’t know how to run a business, much less market one. They come in excited and if they don’t have a stable client list they might try a few Groupon-type marketing campaigns – only to find that those services are not going to sustain them. Then sometimes they see the reality of organic social media marketing and that it’s not as easy as it appears and it’s time consuming. Those looking to their subscription-based booking app for leads also quickly realize this is not their solution. Paid advertising? They might as well forget about trying to do Facebook/Google ads because they don’t have the marketing funds to compete with the ad spend of traditional businesses, thus they don’t get seen. So, what do they do? Well, they end up having to cut bait and close shop.
While the suite model is awesome – the reality is it can be considered a restrictive atmosphere for consumers and tenants. With the salon suite model, you have private rooms (whose doors are sometimes shut), which house separate businesses in one facility with an overall brand name that typically has one point of entry. I rarely see a consumer strolling through a salon suite location looking at what is offered. The car driving by a salon suite location has no idea what really is in it or what is being offered. Then if you go to the average salon suites website – you will notice that it focuses heavily on getting new tenants; “Be your own boss!” or “Get your first two weeks free!”. Sure, some websites will have a tenant directory buried somewhere in the navigation, but in today’s world – who has the time to look through those to figure out who offers what for what price and when they are available? Not me. So, on average you will see that a salon suites’ website will have a 90% bounce rate (where a person gets to the website and stays for a second and leaves). This does nothing to support the existing tenants within the facility(s). In essence, there is a huge barrier-to-entry for consumers to get over, and to add insult to injury, the public is still not fully aware of what salon suites are or how to interact with them. While many salon suite owners/management will say, “It’s their business. I don’t get involved”. The reality is THEY, your tenants, are your business. All boats rise with the tide.
Another example of the suites model being a restrictive atmosphere is the issue with “call-in business and walk-in” traffic. While some suites offer front desk staff to assist people – many do not, and even if they do have a front desk assistant, it’s still not as smooth and fast as an employer-based salon. This reminds me of a time that I went to a salon suites to get my haircut. I actually didn’t know it was a salon suites. I just wanted to get my haircut. So, I went inside and I just started walking around trying to figure out what I should do. Most of the stylists had their doors shut while performing their services with their client. I could see them and they could see me through the interior windows of the suites. I felt weird and out of place. I finally found someone whose door was open and she was sitting in her chair. I asked if she could cut my hair, and she said she was waiting on a client and couldn’t, but gave me the business card of the person next door to her suite who was not there. This is not an unusual story and once again outlines how it’s a restrictive atmosphere.
Furthermore, at an employer-based salon, the salon owner covers 100% of the marketing cost. Then as leads pour in the doors – they distribute them to their employees. However, salon suites do not typically spend marketing dollars trying to get their tenant’s business, and if they do, and they are sending them to a typical website – then you can kinda guess the outcome. So, what is the fix? How can the barriers be removed so consumers can easily interact with one or more businesses located within a location? How can the costly issue of individual business owners having to market for themselves (with their actual business hidden within the brand of suites they rent from) and compete with all the outside competition with larger marketing funds hope to compete?
The fix begins by the management/ownership understanding and accepting that the suites model is evolving quickly and that technology, as it does with the vast majority of industries/models, is going to remove the barriers-to-entry, eliminate the restrictive atmosphere and streamline the processes to help the ecosystem flourish. So, when will this “new” technology be available to help both management and their tenants? Well, our company is currently rolling it out now with our current clients and their tenants, and this is just the beginning. Our company offers a true 360 degree solution for the salon suite model that is a) designed to help tenants both manage and market their individual businesses b) a property management system built specifically for the salon suites model and c) remove the barriers-to-entry and pull in traffic into the facility in a seamless and painless fashion to fill individual calendars. We are tremendously excited to be a part of this ever growing and evolving concept and being able to create solutions that positively effects people’s lives! Thanks for taking the time to read this article and I hope you enjoyed it!!