Ep 308 – Busting Financial Myths in the Beauty Industry

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0:01:40.4 Maggie Staszcuk: Hello and welcome to ASCP's Esty Talk. I'm your co host Maggie Staszcuk and ASCP's program director.

0:01:46.3 Ella Cressman: And I'm Ella Cressman, licensed esthetician and Content contributor for Associated Skincare Professionals.

0:01:52.3 MS: Ella, I am really excited for today's episode because we're about to dive into some of the biggest financial myths in the beauty industry. There's so much misinformation out there, and I'm sure we've both heard some of these myths and maybe even believed them ourselves at one point. So, instead of just talking about them, how about we put them to the test? I thought it'd be fun to play a game called, Myth or Fact where we'll throw out these common opinions or misconceptions about money in the beauty biz and see if they hold up or if it's just, well, a myth. So, ready to bust some myths with me?

0:02:29.9 EC: Don't just stand there, bust some myths.

0:02:31.8 MS: Okay, so, myth or fact? If you want to make more money in the beauty industry, you have to work long hours, hustle constantly, and take every client you can get.

0:02:44.3 EC: Myth.

0:02:45.2 MS: Myth. Yes. All right. The fact is, working smarter, not harder, is often the key to boosting your income. You can raise your rates, offer premium services, and build more efficient systems to make more money without burning out. But I will say, when I first started in the industry. I believed this myth.

0:03:06.8 EC: I think a lot of people believe this myth, especially just starting out. And in even saying just starting out, I work with people daily and in the industry who are 20, 30 years in that still think this. My observation has been that it's just like a hamster wheel sometimes. Like you're just on a hamster wheel. Go, go, go, go, go, go, go. But it's quantity over quality.

0:03:33.4 MS: Yeah. A hundred percent.

0:03:35.1 EC: Yeah. I've, I've seen like those who are the most successful are having quality working hours, not just racking up the number of hours. Does that make sense?

0:03:46.4 MS: Yeah. Yes, totally. You gotta set boundaries, find that work life balance. Work smarter, not harder.

0:03:53.7 EC: Yes. Also think about in that vein, if you're working more, if you're not working, let's just say you're taking time off or you're going on vacation, then you're not earning. So, how can you make money in those times when you're not there? Because honestly, there is physical limitations at some point we can't duplicate ourselves. We can't triplicate ourselves. But how can we duplicate or triplicate our efforts would be key.

0:04:19.3 MS: Yeah.

0:04:20.0 EC: Okay. Okay, Ready? I like this game. It's myth or fact, only high end expensive skincare products can deliver real results for your clients. How about that one?

0:04:31.3 MS: That's a tricky one. And I'm going to say, I don't know, I'm biased here. I'm gonna say that's fact.

0:04:37.5 EC: It is a myth.

0:04:39.2 MS: A myth.

0:04:39.9 EC: Myth... It's not about how much the products cost, but it's how well they work. So, there's so many options now, especially not just in the professional realm, but especially in the professional realm. We have all accessibilities, I'd say. So, many of these affordable lines have quality products and they can provide similar results to these perceivably higher end lines. So, not always is more expensive mean better. It's important that when you're choosing the product lines that you're pairing with, whether you're recommending them like from a, from a big box beauty store or that you're carrying them, that you're looking at productivity efficacy instead of just the pretty packaging. So, look at the ingredients rather than the brand name or price tag.

0:05:30.5 MS: Another thing in this same vein is that there is this myth or misconception that you have to carry the full range that that brand manufacturer offers.

0:05:40.6 EC: Absolutely. And I'm not sure... I'm working with a brand right now that does drop shipping. There is something about drop shipping I want to make sure that I'm having relation, like the relationship management is with me, with my clients. But having that as like an option, I'm not gonna lie, I had been against it for so long, it's kind of nice now for some of those speciality things. So, I don't drop ship everything but I also don't need to carry this very, very specialized thing in all the time. So, I just drop ship it sometimes. So I love that as an option too.

0:06:15.0 MS: So myth or fact? Ella, beauty services are just a luxury and raising your rates will turn clients away from non essential services.

0:06:22.9 EC: Fact.

[laughter]

0:06:25.7 EC: In smart alec font, fact.

0:06:31.0 MS: All right, listen people, we know the truth here. Raising your rates is a good strategy for improving profitability. Why?

0:06:39.4 EC: Because you're working smarter. So, raising your rates is also raising the perception. I have to be honest, when I've raised my rates, it's scary. It's really, really scary. But there's... And the people who are gonna fall off for 10 bucks, 20 bucks are, that's fine if they can't swing that much a month. It's a hard conversation to have. But at this time in our, my career, it's easier to raise your rates than ever because everybody else is doing it everywhere. So...

0:07:06.6 MS: Clients are willing to pay more when they perceive enhanced value or quality in your services. And if you've got a loyal following, of course, you know, five, 10, $15 increase, you may have a couple that drop off, but that loyal following is there to stay with you.

0:07:24.6 EC: And let's talk about future clients too, because their perception is there that like if somebody just go like looking for you, searching you, doing an Internet search and they see your prices are middle or a little bit higher, there's a little natural tendency to go, "Oh, they must have some difference in quality." So, the people who you want to, as I say, rock with you will rock with you. And the people who are going for lower price, they're not going to. And so, you have to really analyze who is your target market, who is your perfect client. I think in school we come out and we say, "I'm gonna offer lower prices, I'm gonna, I just wanna get people in the door." And that might really be a mistake to set yourself up that way. Hold that thought. We'll be right back.

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0:08:53.3 MS: Okay, here we go. Let's get back to the podcast. Myth or fact? If you have a solid social media presence, your beauty business will immediately gain a huge following and clientele.

0:09:05.3 EC: I can't even sarcastic font this because this is absolutely sometimes a myth and sometimes a fact. I'm gonna be honest with you.

0:09:13.4 MS: Okay.

0:09:13.7 EC: For me this is a myth. This is not true because my social media presence is like creeper status only I am not a content creator by any means. But I know there's that demographic who do perceive this as they don't, they only have a thousand followers, I am not going to go to them. Or they are looking at your before and after. So, I hate that there is a generational difference, but I think it is probably both. I do not think it is everything. In fact, I loved the what if your social media went away podcast that we did recently, so check that one out. But you can't rely solely on that. But what are your thoughts?

0:09:52.7 MS: Your business is not going to blow up overnight if you have a massive following. I think we can agree to that. It takes time also to build that loyal, engaged social media following. You need to have consistency, authenticity, engagement is key. It's hard to be that solo practitioner to your point, and be engaged and constantly posting. And also being the business owner and the esthetician and expecting instant results I think is not realistic.

0:10:22.4 EC: I agree a thousand percent. Okay, I have another one on that note. Myth or fact? Maggie, if you're fully booked every day, it means you're making good money.

0:10:33.6 MS: Myth.

0:10:34.4 EC: True. That is absolutely. It is a myth. Here's the thing, understanding your business's finances is key to the long term success because you really have to understand if you're busy every day, are you still profitable? So, are you performing services that have the best ROI or return on investment? Think of for example the price of chemical peels and how you're able to perform that treatment in about 45 minutes to an hour versus let's say doing two 30 minute services that don't equate. So, peppering those in understanding what your specialty is, are you charging enough to be profitable taking into account your overhead, your other business prices and then are you being efficient? So, pricing is key, also efficiency. And the number of people isn't as important as are you profitable with each. So, if you have three that you're profitable with versus 10 that you're not profitable with, you could do the math and it's going to say nope.

0:11:35.5 MS: I think this is a really hard one for some estheticians, at least to wrap their head around. And we've talked before, Ella, that we come out of school, I think you said you've done this and you basically, you know, copy paste the menu that you did in aesthetics school, and that's what you're offering in your place of business, and it doesn't make you profitable. It's maybe not the best menu of services for the demographic that you're targeting. You might be killing yourself working like mad and you're still not making money.

0:12:10.1 EC: Absolutely. You know who's a good resource for like looking at your menu and also looking at profitability, in all fairness? Are product representatives. So, whoever you align with as far as products for your back bar or even your retail, have a conversation with your representative. They'll usually will help walk you through it. Based on, for a couple reasons. One, they have experience with other people in the area. So, if you're brand new, they can kind of help navigate you to what to expect for the area you're in. But also they can clue you in on what is the most profitable, what's the most popular treatments. And they can, and I mean, they're really resourceful for that if you get a good one.

0:12:50.7 MS: Myth or fact? As a solo esthetician or small spa owner, you need to compete with the big guys to survive.

[laughter]

0:13:01.3 MS: Ella has spoken.

0:13:02.9 EC: That is a big old myth.

0:13:05.0 MS: Big old myth. Okay.

0:13:06.8 EC: I think it's a huge myth because I never paid attention to that. But who, I guess here's some differences as I see it.

0:13:16.1 MS: Tell us.

0:13:16.8 EC: The benefit of being solo versus a large place is, in my opinion, the opportunity for flexibility with your clients. And by flexibility, I mean customization. Sometimes, if you're working in a large spa, you are held to protocols. SOPs are standard operating procedures. They have signed up for X facial, they have signed up for X treatment. And this is the protocol you follow. You start with this and you end with this. And there's not a lot of deviation. Maybe a little wiggle room versus if you're a small business or a solopreneur, you have more opportunity to wiggle. [laughter] I guess it's the best thing you can scratch it, control, alt, delete, and start with something that's important for that, because you're not answering to somebody else. The other thing about, and this is like a perk, an industry perk. One thing I love is going grocery shopping on a Wednesday or going to Costco in the morning on a Tuesday or something when it's not busy. And as a solo esthetician, you can make that happen versus not being tied to a schedule necessarily that you may if you work for big spa. That's my opinion. What do you think?

0:14:32.5 MS: I agree with you. It's hard as an esthetician, first going out on your own, to not recognize all the large spas and see that as competition. But for a solo esthetician, you said it, you have differentiated yourself. You're not that big spa. That big spa, whether it's corporate or not, doesn't matter. That is attracting a certain type of clientele. It's not the same clientele that would choose to come and see you. You have an opportunity to customize, be unique, differentiate yourself, offer all those little perks that that big spa does not.

0:15:08.9 EC: I would think of an analogy here would be like shopping at a department store versus a specialty store. So, sometimes a specialty store just gets you a little bit better. Would you say that would be a fair analogy?

0:15:21.3 MS: Yeah. Yeah.

0:15:22.5 EC: Like, I know this is my style that I like, I'm going to this store. I know the majority of the stuff in here is my style or my size or my favorite colors are mixed in here, and I don't have to shovel past the men's department or luggage or whatever, you know. And sometimes it's like, I want a lot of things, and I'm not sure. So, I want to go to the department store and be exposed to more. So, for me, I love boutique shopping. I love small, and I think a lot of people are like that, especially when we're talking about personalized things like skin issues. So, not necessarily do you have to compete with the big guys. I think there's room for everybody at the table.

0:16:00.8 MS: Well said. Now, listeners, we want to hear from you. Do you have financial misconceptions or anxieties that are holding you back? Share with us on social media through Instagram, Facebook, or by emailing getconnected@ascpskincare.com. Thank you for listening to ASCP Esty Talk. And as always, for more information on this episode, or for ways to connect with Ella and myself, or to learn more about ASCP, check out the show notes.