Smart Money Podcast: Building a Brick-and-Mortar Business | Personal Finance
Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions.
This week, we talk with a business owner about how she opened a full-service beauty salon and bar, grew it to two locations with dozens of employees — and how she pivoted again and again during the COVID-19 pandemic.
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Uyen Le grew up working in her mother’s nail salon. In 2013, she opened Beauty Bar, which offers hair, nail and esthetician services as well as a full bar. Beauty Bar now has two Colorado Springs locations and as many as 80 employees when fully staffed.
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Le’s partner, a real estate agent, suggested they buy a building in downtown Colorado Springs so Le could open her own salon. With an SBA loan and financing from family, she bought the building in 2012 and opened Beauty Bar’s doors in 2013. Later, they added a second location.
In the first months of the COVID-19 pandemic, Le says the salon reinvented itself over and over again. Because her stylists were employees instead of contractors, they were able to collect unemployment while the salon was closed. When hair and nail services were allowed to re-start but skin services weren’t, they turned esthetician rooms into private rooms for cautious clients. And when they had to stockpile supplies to stay ahead of supply chain issues, Le started thinking about adding wholesaling to Beauty Bar’s revenue mix.
If you’re dreaming about starting a business, Le says, be prepared to help do every job in the company for at least the first year. Stay focused on your niche and try not to compare yourself to your competitors. And remember that there are no stupid questions — don’t be afraid to ask for help when you encounter something you don’t understand.
- Prepare to jump through some hoops: You’ll likely have to invest time and money into licensing, permitting and zoning issues, especially if you’re opening a brick-and-mortar business.
- Figure out your financing: SBA loans are backed by the U.S. government and issued by banks and other financial institutions. They have competitive interest rates and long repayment terms. But you have other options, too, like friends and family. Ask for help and shop around to put together the financing that works best for you.
- Seize growth opportunities as they come: Chances to expand your business or diversify your revenue can arise out of all kinds of circumstances, even a pandemic.
Have a money question? Text or call us at 901-730-6373. Or you can email us at [email protected]. To hear previous episodes, go to the podcast homepage.
Sean Pyles: Welcome to the NerdWallet Smart Money podcast, where we typically answer your personal finance questions and help you feel a little smarter about what you do with your money. I’m Sean Pyles.
Rosalie Murphy: And I’m Rosalie Murphy, a NerdWallet writer who focuses on small business.
Sean Pyles: Today, we are bringing you the next installment in our Nerdy Business series in which we interview entrepreneurs about starting and growing their businesses. Rosalie, who are we talking with today?
Rosalie Murphy: Today, we are joined by Uyen Le. Uyen is the owner of Beauty Bar, Inc., which is a full-service salon, bar and boutique with two locations in Colorado Springs, Colorado. Uyen grew up working in her mom’s nail salon and took over the business when she was pretty young, and then she launched her own concept in downtown Colorado Springs.
Sean Pyles: Very cool. Well Uyen, welcome to Smart Money.
Uyen Le: Hi. Thank you for inviting me here today. I’m so excited to be on Smart Money.
Sean Pyles: We are so excited to talk with you, and I think it would be interesting to start with hearing about your background in the beauty industry. Can you tell us your experience?
Uyen Le: My family are immigrants to America. I came when I was six, got my citizenship when I was 11. My mom opened the first nail salon in 1996. So only nails, no hair, no skin, nothing, just nails. So I pretty much grew up in the nail salon. If we weren’t in school, we were in the salon. Got my license when I was 17, and just kind of told my mom I would never work in the salon because that wasn’t going to be for me. Then my first day of college, I also knew I wasn’t going to make it in college. And so, I had to tell my dad that, and I just remember him saying, “Then you need to be prepared to work for the rest of your life.”
Uyen Le: And so I said, “You know what? I can. I think I can.” And that’s what I’ve been doing ever since, chasing that dream.
Sean Pyles: OK. Interesting. And can you describe Beauty Bar, the business that you own today?
Uyen Le: So we are a creative blend of full salon services. We do hair, skin and nails, but we also have a full bar, which we create amazing, beautifully-crafted cocktails. And then we also have a boutique inside the salon.
Sean Pyles: Huh. Sounds like a fun place to hang out for a few hours, have a drink and get your nails done and chat.
Uyen Le: Yes. It’s a one-stop shop kind of deal because our first location is downtown, so we get a lot of business people, especially businesswomen. So, the joke has always been you can do five meetings in one meeting. And so, they all see each other there. And so, they start talking about stuff that is coming up or stuff that, “Oh yeah, I was going to tell you something. Perfect. You’re here.” So it’s fun.
Rosalie Murphy: What went into getting that business up and running? What was going on behind the scenes while you were working to launch Beauty Bar?
Uyen Le: So honestly, because working for my family, I never felt like I needed to own my own business because my mom always treated me like I was one of the owners. So but then I met my partner, Chris Morrison, who is a real estate agent. He’s from Colorado Springs, he loves Colorado Springs, and he said, “Why don’t we just buy this building?” 2011 around there, it was still really good in the real estate market. And for us, our downtown is super small and quaint.
And I’m like, “Yeah. We can do this.” I have a little bit of experience in big city living, big city life. So I said, “Yeah. Why don’t we do that?” So not only were we going to be our own landlord, the people that own the building, but now we are also opening a business. So it was a lot. We had a lot going on. So my mom and my aunt was able to lend us some money. But then, my business banker suggested that we try to apply for this SBA loan. And that’s what we did. So our SBA loan was to help us with the const
ruction of the building, and then the other side of it was now the capital to run the business.
Sean Pyles: What’s interesting about Beauty Bar is that you’re a hybrid of a couple different types of businesses at once. You have a bar and you also have a salon at the same time. Was that difficult to start up? Did you feel like you had to set up two different businesses distinctly, or was it all kind of bleeding together?
Uyen Le: So in a way, we were both new to everything. In downtown, you have zoning, so when you’re the landlord, you have to worry about zoning. So then you have to put in a zoning permit to see if you are able to even open that type of business. And so, learning that part, zoning, even your sign, you need a permit on that. So it was really hard and was really rewarding at the same time. So I learned really fast and I started talking to people. And if you said you were an owner of something, I just start asking, and then that’s how I learn. I don’t think that there’s any stupid questions.
Sean Pyles: What was the process like getting your liquor license?
Uyen Le: Hard. Hard. Because usually liquor, they go hand in hand with food.
Uyen Le: And so we don’t have that food concept, we have a service. So we want to provide a service, and then you can get a drink. So that was really hard going to the liquor board. Number one, it costs a lot of money to get a liquor license. And then, when you go to the liquor hearing board, you have six older businessmen, so there’s no woman on the board that understands what a full-service salon is.
And I have to keep reminding people that I am, number one, first and foremost, a full-service salon. I am not a bar. And so, I have to keep telling them, “It’s probably going to be like 25% of the income is the bar, and if that.” Because if you’re averaging one drink per person, or some people might get two, that’s not a lot. And some people don’t get any at all. And so, that was the thing that I had to sell myself and now have to tell, “OK. This is just an additive.”
Sean Pyles: So if it was so difficult, I’ve got to ask, why did you keep pushing for it? What about having a bar in there was so important to you?
Uyen Le: I always believe that if you keep putting something out there, then it’s going to come. And so, I was already talking about it. I was talking about, “We’re going to have a bar.” I was talking about it to my client. I was talking about it to anyone that I knew. So there was no way I wasn’t going to have a bar. And it was hard. We opened without the liquor license. And when we did open with a liquor license, we could only drink at the bar. So then we went to the state. And so one of the board members actually came down and toured the salon so that he could understand. So that’s how we got our liquor license.
Rosalie Murphy: What does your business look like today? How much of your revenue does come from the bar and how much comes from hair and nails and skin care and all the other things?
Uyen Le: Honestly, our liquor business has gone up quite a bit. It’s almost gone up every year, now that people realize that we have it and how cool it is. So not only that, we started kind of like blending our service. So if let’s say you go in to get a hair blow out, if you want your hair to be kind of messy looking, bedhead, you can do an extra dirty martini with it.
Rosalie Murphy: That’s funny.
Uyen Le: So we kind of blend it in a little bit. So it’s pretty cool. And now that we have a name and people know, it’s gotten easier with the bar and it’s actually really fun. The bartenders are fun. They don’t know anything about hair, and every time we hire them, they’re like, “You sure I’m going to make money doing bartending?” And we’re able to grow people, too, in that aspect. Our front desk becomes our bartender. Our bartender becomes our front desk.
Rosalie Murphy: Yeah. You have two locations now. How many employees is that in total? And it’s a really challenging environment right now to hire and retain workers. How are you dealing with that?
Uyen Le: Before COVID, the last year was 2019. We were always sitting on between 70 and 80 employees between the two salons. After COVID now, this is our first full year really being back without any restriction. We’re sitting about 65 through 68, but the service dollar has grown. So I guess in a sense, it’s a good thing. And then also the people that want to work, they’re really, really working because now they’re making a lot more money than they would before, and there’s more opportunity. And our job is hard because when we hire them fresh out of school, we spend so much time training. Sometimes they work under our master stylist for a year just training, just learning how to cut hair, do nails or any of that. The time that is put into that is a lot for the outcome that we get. So we try to build that employee retention really high.
Rosalie Murphy: Yeah. I know in the beauty industry, oftentimes, I think my hairstylist just sort of rents a booth at her salon. How does that work in your salons?
Uyen Le: So the salon business, we always have a bad reputation for high turnover, and we really do because how do you grow somebody and be able to still profit at the same time? And everyone says, “Employees cost a lot of money.” For an employer, it does cost us a lot of money, especially hairstylists and nail technicians. They don’t look at us like we’re very smart or make a lot of money, but I can tell you, I have people that make six figures in my company doing hair and nails. But on top of that, our business concept is hard and different because it costs the owner more money. So we’re a W2 commission-based salon. So we don’t do any booth renting or any of that. Everybody that’s in the salon is an employee. We also offer healthcare for anyone that qualifies for that. So you have to work with us for 90 days first. And then we also do a bonus structure based on your sales dollar and also vacation pay. And vacation pay is based on your retail sale.
Uyen Le: And how we maintain our customer and built that is we invest a lot. I have master stylists that oversee their department, and we have leads that sit with every single one of our girls and show them their numbers and how they need to grow. You have to maintain your clientele. First, they’re the Beauty Bar client. And then how do you turn them into your client? And that’s a skill because people are not raised with customer service. It’s all about customer service. I think we’re the only job that really is six inches away from the client. And we are constantly touching them throughout that whole service. So how much closer are you? So if you don’t have that customer service, I always say, “Oh, she can’t cut her hair straight for anything. But man, people love her because they come to see her.”
Sean Pyles: Building that relationship is really important.
Uyen Le: Yeah, exactly. That’s what I teach all the young girls. I said, “You don’t know who’s in your chair. You don’t know who you’re talking to.”
Sean Pyles: You mentioned COVID a little bit ago, and I’d love to hear how that changed the way you think about and run your business.
Uyen Le: So my joke is — and everyone that works for me knows — I felt like in the last two years I probably opened four different types of salon over and over. And we did it very well. When we got shut down, so we got shut down in Colorado for six weeks. So because they’re W2 employees, they were able to get on unemployment right away.
Uyen Le: So it was really nice, that was one load off of me when I know that my girl was not contracting and that they were able to call unemployment and get on it right away. That was so, so, so nice. That’s the benefit of being a W2 employee. So, and then we were able to open. So when we first came back, we only had 10 people. So we had five employees and five customers in the whole salon.
Rosalie Murphy: What would you normally have?
Uyen Le: I don’t know, 40 people.
Rosalie Murphy: Oh my goodness.
Uyen Le: Sometimes 50 people. So we’re not the quiet, romantic type of salon. We’re loud talking, “Hey, can I have another glass of wine?” type.
Uyen Le: So it’s really, the energy is really good in there when we’re super busy. So going back to that, we have to number one, clear everything out. Then I just reached out to all the girls. I said, “Who wants to come back to work, and who doesn’t want to come back to work? I’ll take whoever first. I can only do five at a salon. We could probably do 10 if we double shift.” So we normally open from nine to seven. So we actually opened from seven to eight so that we could double shift. So then that went away and then now they open it up to now you can have as many people as you can in the salon, but they at all time have to be six feet apart. And so then we could bring more people in, but the skin department couldn’t come back yet. So then we turn all of our esthetician rooms and lash rooms into now personal suites. So literally three businesses right there.
Sean Pyles: Yeah. Sounds like a lot to manage.
Uyen Le: And a lot of people chose to stay closed, and they were able to do that. But I knew that if I stayed closed, I would probably never go back because it would just be harder.
Uyen Le: I think when the hard time comes, and you just deal with it back to back to back to back, I think you can do it. But when you have a longer break, let’s say I was closed for six months and then reopened until six months. I don’t think I would’ve had the energy to do it.
Rosalie Murphy: What about some of the other impacts of COVID? I mean, there have been supply chain issues. We’ve seen really dramatic inflation over the last couple of quarters. How is all of that stuff impacting your business?
Uyen Le: I know that I’m the face of Beauty Bar, and people think that it’s just me, that I’m the superpower woman, but I’m not. I have a really, really amazing team. And so working through this and being able to like, “Hey, you guys, can you do this for me? Hey, can you do this for me?” So when we go and get supplies, we have to drive here, drive there. Or when it was back up, it was hard. Sorry, I’m just getting emotional. I don’t know why.
Rosalie Murphy: Oh, that’s OK.
Uyen Le: We just learned to now buy stuff in big bulk. My mom’s garage became our storage, my sister’s garage, my garage. And we were able to just buy stuff in bulk and pallets. It wasn’t like COVID, that was going to stop us. But now it was the supply chain.
If we don’t have the supply, how could we do it? You’re talking about hair color. We need that. It’s not like the company shut down. It wasn’t getting here. But I knew, I knew just because just from buying the stuff that we needed to buy for COVID, which was gloves and mask, and it was how expensive it had gone up and how they didn’t have any. I just knew that I just have to stock up. And I’m super grateful for the business that I’m in, besides from the bar. The stuff that we buy, they don’t go bad. So if we have to sit on it, it was going to get used.
Rosalie Murphy: Yeah. What do you think the future holds for you and your team and Beauty Bar?
Uyen Le: A lot. I’m excited. It got me thinking a lot of things now, because not only do I have a great team, but also I have a lot of loyalty and I could feel that and I could see that. And I’m super grateful in any business that you have, I think when your employees get to the top of your company, there’s no more room to grow, but to be their own boss. I always want to make more money, why wouldn’t they want to make more money? So I think there’s always a cap in our company. And so with all this, it’s opened my eyes. So a lot of things that I can do, like the shortage on supplies, it got us thinking, “OK, maybe Beauty Bar needs to be a supplier. Should we open a supply shop?” That when our girls want to leave us and want to own their own booth rental or run their own salon that maybe they can buy from us because they know us because there’s a relationship there.
Rosalie Murphy: Yeah. And it’s the products they’ve already been using.
Uyen Le: Exactly. So they know exactly. And all they have to do is just now buy it from us. So that is something that we’ve been thinking. And then with me just getting older, my clients are getting older. My very top-notch stylists that’s been with me for a long time are also getting older. So we are very actively looking into opening up a med spa because now we need extra machines to help us look a little bit younger.
Sean Pyles: It makes a lot of sense to evolve as your clientele are, as well.
Uyen Le: Yes. I have a lot of clientele that’s been with me since I moved to Colorado Springs, which is 18 years ago. And they’ve seen me from when I was young to now, and they want to be with me, and they’re starting to ask me questions in the beauty industry. “Uyen, I really want to get this done for my bag under my eyes. And I’m thinking about this, what can I do?” And so I’m starting to see that. So I don’t offer it right now, so they have to go somewhere else. But if I offer it, then I can just move right in. And I already have that trust.
Sean Pyles: Well, Uyen, I would love to hear what advice you would give someone who’s thinking about starting a business of their own.
Uyen Le: Well, are they sure? Is that what they really want?
Sean Pyles: You didn’t want that in the beginning and then you ended up doing it anyway.
Uyen Le: Joke aside. Honestly, I would tell them, are you ready to commit seven days a week, 24 hours being the front desk, the receptionist, the cleaner, the janitor and then also doing what you’re supposed to do for that business for at least the first or second year of the bu
siness? And if you can say yes to that, then it’s a great opportunity. I think that people don’t realize when you open the business, you are everything. You are literally everything until you have that capital coming in to now hire other people to help you with that.
There’s a lot of opportunity out here in this country. There’s so much money out there that could be made. And if you can just focus on what you have already going inside your business, then you’re going to be fine because I think we get lost and we create stories in our head and we start to look at our competition like the next salon down the street from me, what are they doing? And I always tell the girls, “You guys, don’t worry about what they’re doing. We just have to worry about what we’re doing, and it’s going to be fine.” I don’t think it’s a competition. I think everyone has a different niche, and that’s what it is. That’s why it’s such a great world to live in.
Sean Pyles: Well, thank you so much for talking with us and sharing your story, Uyen.
Uyen Le: Yes. No, thank you for having me on here.
Rosalie Murphy: And now let’s close out with some takeaway tips for our Nerdy entrepreneurs.
Sean Pyles: First, if you are opening a brick-and-mortar business, you’re going to have to jump through a lot of hoops. Be prepared to invest time and money into licensing, permitting and zoning issues.
Rosalie Murphy: Second, there are lots of different ways to finance a business. SBA loans, which Uyen talked about, are backed by the U.S. government and issued by banks and other financial institutions. They tend to have competitive interest rates and long repayment terms. Friends and family may also be willing to invest in you. Ask for help and shop around to put together the financing that works best for you.
Sean Pyles: And finally, keep an eye out for new revenue streams. You never know when you might have the chance to diversify.
Rosalie Murphy: And that’s all we have for this episode. Do you have a money question? Turn to the Nerds and call or text us at 901-730-6373 that’s 901-730-NERD. You can also email us at [email protected]. Also visit nerdwallet.com/podcast for more info on this episode. And please remember to follow, rate and review us wherever you’re getting this podcast.
Sean Pyles: This week’s episode was produced and edited by Rosalie Murphy with help from me. And here is our brief disclaimer, thoughtfully crafted by NerdWallet’s legal team. Your questions are answered by knowledgeable and talented finance writers, but we are not financial or investment advisors. This Nerdy info is provided for general educational and entertainment purposes, and may not apply to your specific circumstances.
Rosalie Murphy: And with that said, until next time, turn to the Nerds.
The article Smart Money Podcast: Building a Brick-and-Mortar Business originally appeared on NerdWallet.