Words matter. They affect how we think, and how we think affects the decisions we make.

For more than 25 years, I have been saying something that challenges the conventional mindset and makes some salon owners uncomfortable:

You don’t own a salon. You own a business that happens to be in the beauty industry.

It sounds like semantics. It isn’t.

In my conversations with salon owners, I repeatedly hear the same concerns. Profits, if there are any, are often slim. Overheads continue to increase. Finding and retaining quality people is difficult. Online retail and manufacturers selling directly to consumers have changed the marketplace.

There are successful exceptions, of course. But we should still ask:

Are we trying to solve today’s problems with yesterday’s business model?

Busy Is Not the Same as Profitable

The industry has traditionally celebrated sales, full appointment books, large teams and multiple locations. But revenue is not profit.

A busy salon can still be a poor business. The important question is not simply how much revenue we generate, but how much we retain. Which services are genuinely profitable? How productive is each square foot? How much does an empty station cost? What is the lifetime value of a client?

Profit should not be what we discover at the end of the year. It should be designed into the business at the beginning.

Why Can’t a Dentist Sell a Montblanc Pen?

I have used this example for years. Why can’t a dentist sell Montblanc pens?

The usual response is: What do pens have to do with dentistry?

Nothing. And that is precisely the point.

The dentist already has something retailers spend fortunes trying to obtain: a customer inside the business who trusts the professional environment and has time to look.

There is no rule saying a dentist can only make money from teeth. There is simply an assumption. And assumptions have a remarkable ability to disguise themselves as rules.

The same applies to salons. Why should a salon only sell hair products?

A client may spend two or three hours in the salon. During that time, the business has their attention, their trust and an understanding of their tastes and lifestyle. Yet having created that extraordinary relationship, the opportunity is often restricted to a service and a few bottles of haircare.

Why?

Because we still think we own a salon. And that may be the real problem. The moment we define ourselves by the category, the category becomes the constraint.

Find Revenue You’re Not Looking For

When costs rise, the obvious response is to raise prices. Sometimes that is necessary. But there is a limit to how often increasing costs can simply be passed on to the consumer.

The greater opportunity is to create additional income without proportionately increasing overhead.

Skincare, fragrance, cosmetics, jewelry, fashion accessories, wellness, beauty technology, gifts, memberships and subscriptions can all represent opportunities, provided they are relevant to the customer and the brand.

I am not suggesting turning salons into department stores. The opportunity is curation.

The customer is already there. The space is already being paid for. The relationship already exists. Additional revenue generated from those existing assets has very different economics from revenue that requires another chair, another employee or another customer.

That is why the Montblanc question matters. It isn’t about pens. It is about seeing value where convention has taught us not to look.

The chair is an asset. The space is an asset. The relationship is an asset. But so are the customer’s time, their trust and everything we have learned about them.

Instead of asking: What else can a salon sell?

Ask: What else would our customer want to buy from us?

The first question begins with the limitations of the salon. The second begins with the possibilities of the customer.

Change the Question

The same thinking applies throughout the business.

How many stations can we fit? becomes How much profit can this space produce?

Rather than asking where we can find more stylists, consider why a talented young person would choose to build a career with us. And when rising costs suggest another price increase, ask what opportunities already exist within the business that we have yet to recognize.

Better businesses frequently begin with better questions.

For too long, we have looked primarily at other salons for our answers. We should also be studying hospitality, retail, technology, luxury brands and other industries that understand customers extraordinarily well.

Because once we stop thinking like salon owners, we begin to see opportunities that were there all along.

The next time you walk through your front door, look around as though you had never seen the business before.

Then ask yourself: If I were creating this business today, knowing what I know now, would I create the business I am looking at? If the answer is no, don’t begin by changing what you do. Begin by questioning why you do it that way.

You don’t own a salon.

You own a business.

A salon is a category. A business is a possibility.

About the Author:Leon Alexander is president of Eurisko, a comprehensive design, consulting and distribution source servicing the salon and spa industry. He holds a Ph.D. in behavioral psychology.