Recession-Proof Industry (01:40)
Gregory Chavez is founder of J. Gregory Salon and founder of a local salon academy. The industry is recession-proof.
Cosmetology School (02:52)
Chavez sought to pursue commercial art out of high school but went to a hair show and found it a creative outlet. He went to cosmetology school, then worked for a product distributorship.
Education as Preparation (03:01)
Chavez focused on education rather than work as a full-time stylist, which allowed him to train his own people and gain connections to product companies.
Taking Over Business (02:45)
In 1990, at twenty-three, Chavez took over the Salon where he worked and found a partner.
Personal Conflicts (01:16)
Chavez usually handled conflict with his employees successfully.
Business Books (02:55)
Chavez read books on the salon business, not having a business school background, and learned lessons from the school of hard knocks.
New York (01:47)
Chavez went to New York to learn from the owner of one of the top spa salons in the country. Trends start in New York, L.A. and Europe. He went broke there and decided to move back.
Funding J. Gregory (01:38)
Chavez started J. Gregory. His connections, stable history and business plan allowed him to raise money.
Success of J. Gregory (02:09)
J. Gregory started in 2003 with a strong customer base and has made $1 million, placing his in the top one percent of salons. Stylists have short, flexible schedules.
Personality Traits (02:24)
An outgoing personality and listening skills are crucial to success. The host suggests the owner should himself have a good haircut; Chavez tries to match customers to stylists with similar haircuts.
Lessons of Chavez's Rise (03:14)
The host draws lessons from Chavez's story: education in the business and cosmetology of the industry was crucial, and outgoing personality is crucial.
Financial Needs (02:52)
Chavez wrote a business plan to raise money for his salon. He took out enough money to meet renovation needs, but not to get working capital, because he had a good customer base to start.
Chavez took out a five-year high-interest loan from a friend. He paid it off in a year and a half.
Feelings About Venture (02:00)
As he started his business, Chavez was excited rather than afraid, since his debts were manageable. He was confident in his cosmetic abilities but nervous about being a businessman.
Location and Lease (03:19)
Chavez found a location with the unique aesthetics he desired. He personally guaranteed his lease, confident in his following; many salons, in contrast, close because they lack an existing customer base and artistic owners lack business sense.
Chavez rejected on principle the idea of taking staff from the business where he previously worked, instead training a new staff of five.
Chavez used outlets and plumbing that were in the building when it was a clothing store and spent about $10,000 on improvements.
Local Distributorships (02:11)
Chavez recommends keeping good relations with local distributorships rather than looking elsewhere. Used equipment is available.
Chavez recommends starting with a simple setup. Though Chavez's vision has evolved, he started out with some understanding of the culture he wanted to create.
Product Line (01:57)
Cities are crowded with salons; Chavez chose an edgy product line out of New York to set him apart and avoid products that could be found at grocery stores.
Support Services (01:43)
Product manufacturers offer support services such as education. They want sellers to succeed.
Profitable Investment (01:52)
Chavez spent almost all his $45,000 loan before opening. After about two years, he could generate a living for himself.
Cash-Flow and Banks (01:39)
Chavez's cash-flow allowed him to develop a good relationship with banks, which paid off when he opened his school.
Licensing to open the salon was simple, since Chavez is a licensed cosmetologist. The board occasionally inspects.
Word-of-mouth is the best marketing, so Chavez gave incentives for referrals.
Chavez spent little on marketing to start, then advertised in local papers and supported local foundations. Eventually, he advertised a grey hair fashion in big papers, creating national buzz.
Social Media (01:29)
Chavez's marketing budget is 5% of revenue. He uses social media.
Chavez initially charged high prices because of his high-end quality, but has had to discount and provide add-ons during the recession. He studied the local market through his own research and his distributors' information.
Management and Delegating (02:35)
Chavez has forty employees between his businesses. He has had to delegate and restructure as he has grown.
Resources for Beginners (02:19)
Chavez sends his people to a trade organization to learn. Resources are available for people starting up, and business resources not specific to the hair business are valuable.
Importance of Using Resources (01:14)
People can find information with little effort on how to start up. Many business owners rely too much on their spouses rather than on people who know the business.
Hard Work (02:02)
Chavez works long hours, especially since he has three businesses. He is trying to manage his hours and delegate.
Advice for Entrants (01:54)
For someone entering the salon industry today, Chavez recommends attending academies, which today teach business skills, not just cosmetology. Jobs are mobile.
Success In Your Hands (01:45)
Everyone is a potential customer, and while the market is crowded, people are always looking for a good haircut. The industry has stayed strong during the recession.
Summary of Advice (04:14)
The host summarizes Chavez's advice. Chavez's connections made his start-up loan possible. Making living wage took years. Marketing depends greatly on referral; marketing budget is 5% revenue. Choose local vendors.
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