How to Succeed in the Salon Suite Business

In this interview, we sit down with Karen Kaminski, the owner of Allure Salon Suite Consulting. Karen shares her journey from owning a nail salon to becoming a prominent consultant in the salon suite industry. Her story is one of unexpected opportunity and determined innovation. Through her experiences, Karen has become a trusted guide, helping beauty professionals navigate the complexities of establishing and growing their own salon suite businesses. From overcoming initial challenges to providing tailored consulting services, Karen’s expertise is a beacon for those looking to succeed in this evolving industry.

Join us as we delve into Karen’s unique approach and the valuable insights she offers to aspiring salon suite owners.

Inspiration Behind Allure Salon Suite Consulting

SBS – What inspired you to start Allure Salon Suite Consulting?

Karen – It’s not the typical story; I actually fell into it. People began reaching out to me, asking for advice on how to set up their own salon suite facilities. After several calls, I realized that I had valuable insights and expertise to offer. Having built my own successful salon suite company, I knew the industry inside and out. That’s how Allure Salon Suite Consulting got started. It was clear that many were looking for guidance to navigate the complexities of setting up these facilities efficiently and cost-effectively, and I was in a unique position to help.

Challenges in Starting Allure Salon Group

SBS – Can you share some of the biggest challenges you faced when starting Allure Salon Group?

Karen – There were three major challenges I faced.

First, I had to convince landlords of the salon suite concept. It was relatively unknown in Pennsylvania, so getting them to understand and buy into the idea was tough.

Second, I needed to convince banks to provide loans for this new concept. Since the salon suite model was not established in PA, financial institutions were hesitant to support it.

Lastly, introducing the concept to beauty professionals in PA was challenging. The state had strict requirements from the PA State Board of Cosmetology, mandating 180 square feet for a single salon operator, whereas the franchise model I was advocating for typically required only 100 to 110 square feet. This discrepancy made it difficult to gain acceptance initially, even though the rest of the country had already adopted the salon suite model.

Influence of Nail Salon Ownership on Consulting Approach

SBS – How did your experience as a nail salon owner influence your approach to salon suite consulting?

Karen – My experience as a nail salon owner profoundly influenced my approach to salon suite consulting. I knew firsthand how difficult it was to run my own business and what each beauty professional needed in their space to perform their services effectively. This insight allowed me to design salon suites that cater specifically to the needs of beauty professionals.

My background also gave me the knowledge to ensure that each location was in compliance with state regulations. I used the PA State Board of Cosmetology as my guide when building my company from scratch. This experience, combined with my time as a top-performing sales representative for Cosmoprof, provided me with a unique perspective on the struggles beauty professionals face in maintaining brick-and-mortar businesses. This knowledge has been invaluable in helping my clients set up successful salon suite facilities.

Key Factors in Scouting Salon Suite Locations

SBS – What key factors do you consider when scouting locations for new salon suites?

Karen – When scouting locations for new salon suites, I consider several key factors. First, I look at the presence of other salon suite facilities, as their success can be an indicator of market demand and, on the other hand, competition. Also, I evaluate the density and performance of nearby salons and spas, as well as professional beauty supply stores, to make sure there is a strong local beauty industry.

I take into account the neighborhood’s demographics and accessibility, ensuring the location is convenient for both beauty professionals and their clients. It’s also crucial to make sure that the location complies with state regulations, which I am well-versed in due to my extensive experience and use of the PA State Board of Cosmetology as my guide.

Negotiating Tenant Improvement Allowances

SBS – How do you negotiate tenant improvement allowances to reduce client expenses?

Karen – Typically, I have brokers search for properties that are known to offer tenant improvement (TI) allowances. Once we identify a suitable location and my client is satisfied with the potential income from the pro forma, we begin negotiations. We often secure 10-year leases, and, depending on how generous the landlord is with the TI allowance, we may extend the lease term. In some cases, I’ve negotiated up to 20-year leases to secure over $100 per square foot in TI money.

This strategy is a win-win for both sides: the tenant receives significant funding for the project, which helps defray the initial setup costs, and the landlord benefits from having a long-term tenant who can drive consistent traffic to the property. By leveraging these negotiations, we can create a financially viable and attractive setup for both the client and the landlord.

Common Mistakes New Salon Suite Owners Make

SBS – What are some common mistakes new salon suite owners make, and how can they avoid them?

Karen – One of the most common mistakes new salon suite owners make is not hiring a consultant who has firsthand experience in building, managing, and operating salon suites. When you work with someone who has never gone through the entire process, you are likely to encounter a very expensive learning curve. Mistakes in these projects can amount to tens of thousands of dollars.

To avoid these costly errors, it’s crucial to partner with a consultant who has a proven track record and knowledge of the industry. An experienced consultant can provide valuable insights and guidance, ensuring that every aspect of your salon suite is set up for success. This includes everything from location scouting and lease negotiations to construction management and tenant onboarding. With the expertise of a seasoned consultant, new salon suite owners can mitigate risks and avoid the pitfalls that often come with inexperience.

Supporting Beauty Professionals in Growing Their Businesses

SBS – How do you support beauty professionals in managing and growing their independent salon businesses?

Karen – At Allure Salon Group, while it might look like a typical salon suite from the outside, inside we operate as a business incubator. Our goal is to help beauty professionals not only maintain their existing business but also grow it into something bigger and better. We teach basic business principles in a way that is easy for beauty professionals to understand. Our approach emphasizes that the beauty professional is running a business that provides beauty services rather than simply working in a beauty business.

We also started the Employee-to-Owner (ETO) Program. In this program, we interview individuals who have a book of clients. They receive all the benefits of ownership but remain W2 employees of Allure. Participants are required to engage in one-on-one training calls with our team bi-weekly. They receive a 60% commission, buy their own products, and usually, within six months, apply for their own salon license and become independent salon business owners. This structured support helps them transition smoothly from employees to successful business owners.

Future Trends in the Salon Suite Industry

SBS – What trends do you foresee in the salon suite industry in the next five years?

Karen – One trend I foresee is the increasing involvement of private equity in the salon suite industry. Private equity firms have taken notice of this business concept and have partnered with all of the major franchises, which translates to accelerated growth. As a result, you will likely see more and more salon suite facilities popping up in neighborhoods across the country.

This growth is actually great news for beauty professionals, as more people are choosing the salon suite route due to the increased income potential and the flexibility it offers. The ability to control their own schedules and manage their own businesses makes salon suites an attractive option for many in the beauty industry. It will become an even more viable and appealing choice for beauty professionals looking to grow their careers.

Tailoring Consulting Services for Clients

SBS – How do you tailor your consulting services to meet the specific needs of each client?

Karen – Rather than tailoring my services individually for each client, I use a structured approach that has proven successful in my own locations. I create a consistent framework that addresses the essential aspects of setting up and managing salon suites. However, I encourage clients to personalize their facilities with their own style through the selection of furniture, finishes, and fixtures. This combination of a solid, tested structure with individual customization allows clients to benefit from a reliable model while also making their space uniquely theirs.

Managing Daily Operations and Property Management

SBS – How do you handle the daily operations and property management for salon suites?

Karen – Property management is a service we recently started offering due to increased outreach from other private facility owners. We noticed that many owners were making the mistake of dropping their prices to attract new tenants, which led to what I call “a race to the bottom.” To address this, our team has systemized the daily activities of Allure’s locations to optimize operations.

We deploy our standard operating procedures into the facilities, streamlining processes and ensuring efficiency. Additionally, we educate owners on how Allure operates differently from franchises and other private facilities. Our approach includes business training, one-on-one coaching for tenants, and systemizing the facility’s operations. These added services help attract and retain tenants while maintaining the original pro forma, ensuring the facility remains full and profitable.

Advice for Investing in the Salon Suite Business

SBS – What advice would you give to someone looking to invest in the salon suite business?

Karen – If you’re considering investing in the salon suite business, it can be a great semi-absentee income stream if set up correctly. The heavy lifting is at the front end of the project during the setup phase. Once everything is set up properly and running efficiently, with value-added services to support the success of beauty professionals, it becomes a highly profitable semi-passive income stream.

I strongly encourage investors to do their homework and ensure they have an experienced guide, like myself, to assist them through the entire process. Having someone with extensive experience can help avoid common mistakes and ensure a smoother, more successful project. My own experiences have taught me valuable lessons, and by sharing this knowledge, I can help investors navigate potential issues and hit their investment goals.

Educating Beauty Professionals Transitioning to Salon Suites

SBS – How do you educate and support beauty professionals transitioning from traditional salons to salon suites?

Karen – We have three primary methods for educating and supporting beauty professionals transitioning from traditional salons to salon suites. It all starts with providing basic business skills rather than the “beauty education fluff” I often hear about. We’ve developed a systemized way of educating beauty professionals who want to move from being employees to owners.

First, we offer Allure’s One-on-One Coaching, where we provide personalized guidance and support. Second, we have the Employee-to-Owner Program, which helps individuals transition smoothly by offering them the structure and support they need. Finally, launching this fall, we will introduce Allure University, an online course designed for those who prefer a DIY approach. This option includes business development calls with our team to ensure that beauty professionals fully understand the content and can help their businesses thrive.