Fake News

While attempting to research this article, I came upon far too many opinion-based libertarian lobbying blogs, so I’m anticipating some severely misinformed questions in the comments—and I don’t blame anyone for them. The fear-mongering is ridiculous; I saw one writer lamenting the fact that “the new law” disallows workers from determining or waiving their status, but that has always been the case.

Workers can’t choose exploitative work arrangements that violate federal law any more than people can sign contracts agreeing to unlawful arrangements. 

Several writers argued that this is a “major change” that will bring disaster to workers, business owners, and the economy, but what they’re really telling you is how little they understand the world we’re all living in, where misclassification and wage theft are the default business strategy, not rare exceptions, and where business owners are not receiving the education, guidance, or support required to be both compliant and profitable. 

If you’ve been pushed to the brink of panic by these clowns, take a deep breath: at no time has the definition of the word “independent contractor” changed in this country. The rules provide guidance to help workers and employers understand the law (that is literally their entire purpose for existing), but the actual law in this area is very well-established. Only people who want to lean on ignorance as a defense for their bad behavior consider clarity a threat to their freedom. 

The DOL’s rule change simplifies classification, making it more accessible and comprehensive. This should make violations far less likely, which is a win for everyone involved.

The “new” method is more illustrative; it explains itself fairly well. The way each factor is broken down and clarified—with two examples for each—should make it easier for employers to recognize improper use of the independent contractor classification and avoid the consequences associated with misclassification. 

The Difference Between Laws and Rules

The first thing you need to understand is that laws and rules are not the same thing, and anyone attempting to conflate the two deserves serious side-eye.

Laws are codified by legislative bodies (state or federal) and must be adhered to by everyone who falls under that legislature’s jurisdiction.

Rules are detailed frameworks developed by various government agencies to provide guidance. They clarify the law so the public understands how to comply and so the judges who must enforce the law understand how they are applied in practical scenarios. Various agencies are required by law to enforce these rules. (A judge can’t decide not to apply these six factors, for example.) 

The core legal definition of an independent contractor under the FLSA hasn’t fundamentally changed.

The rules help to clarify the DOL’s position and provide insight into how the law should be interpreted and applied; the rule change doesn’t change the law itself. The statutory law and underlying regulations here are very much the same—only the analytical lens through which worker classification is determined has been changed.

Brief History of Worker Classification Guidelines

In 2021, the DOL moved from a five-factor “economic reality” test to a system weighing two core factors: the nature and degree of control the employer had over the work, and the worker’s opportunity for profit or loss. 

The DOL believes this approach didn’t “fully comport” with the text and purpose of the FLSA as interpreted by the courts because the rule included provisions that conflicted with longstanding case law and the established guidance provided by the DOL. Overall, the rule narrowed the test by excising factors the DOL considers relevant when making a determination about a worker’s status. Plus, it departed from decades of case law, which could confuse workers and business owners. 

For those who know a thing or two about US labor and employment laws, the real problem was the prohibition against examining whether the work performed was “central or important” to the employer’s business. It’s a pretty critical element to consider. 

Ultimately, the tests are similar in the following ways, per the DOL’s FAQs:

Both rules identify economic dependence as the “ultimate inquiry” of the analysis; both rules provide a non-exhaustive list of factors to assess economic dependence; and both rules caution that no single factor is determinative. Both rules also clarify that economic dependence does not focus on the amount of income the worker earns, or whether the worker has other sources of income.

The important thing to know is that none of this is likely to negatively impact anyone who was in compliance to begin with.

Per the WHD’s guidance regarding the 2024 Worker Classification Rule:

The Department emphasized that “because this final rule is aligned with longstanding case law, the Department does not anticipate that independent contractors (who sometimes also self-identify as freelancers or small/micro business owners) who are correctly classified as independent contractors under current circuit case law would be reclassified applying the guidance provided in this rule.” 89 Fed. Reg. 1659. 

If your practices currently align more closely with the looser 2021 Rule, it’s time to reevaluate to ensure you’re still in compliance.

The Six-Factor Test for Determining Worker Classification

Factor 1: Opportunity for Profit or Loss Depending on Managerial Skill

Does the worker exercise managerial skill that affects their economic success or failure? Can the worker negotiate the pay, determine whether they accept or decline jobs, and choose the order and/or time in which the jobs are performed? Does the worker engage in marketing, pay for advertising, or take efforts to expand their business or secure more work? Does the worker have the authority to hire others, purchase materials and equipment, or rent space?

• Interpretation: This factor evaluates whether the worker actually exercises independent effort and decisionmaking, without the employer’s influence or an expectation to comply with the employer’s requirements or limitations.
• The Focus: Does the worker call the shots when it comes to their business, or is their independence theoretical at best?

Factor 2: Investments by the Worker and Employer 

Are any of the worker’s investments capital or entrepreneurial in nature?

• Interpretation: Costs borne by a worker to perform their duties are not considered evidence of capital or entrepreneurial investment. This factor examines the degree to which the worker makes investments in their own business’s growth. 
• The Focus: Does the worker make similar types of investments as the employer or investments of the type that would allow the worker to operate independently in the worker’s industry or field?

Factor 3: Degree of Permanence of the Work Relationship 

Is the work relationship indefinite or continuous in duration?

• Interpretation: This factor examines the nature and length of the work relationship.
• The Focus: How independent is the worker, as a matter of economic reality?

Factor 4: Nature and Degree of Control 

Who sets the worker’s schedule? Does the employer supervise or monitor the worker’s performance? Is the worker limited or prohibited from working for others? Who sets the service prices? Who controls the marketing?

• Interpretation: This factor aims to determine whether the worker has sufficient autonomy to be considered an independent contractor.
• The Focus: How much control does the employer have over the performance of the work and the economic aspects of the working relationship?

Factor 5: Extent to Which the Work Performed is an Integral Part of the Employer’s Business 

Is the work critical, necessary, or central to the employer’s business? 

• Interpretation: This factor does not depend on whether any individual worker in particular is an integral part of the business. 
• The Focus: Is the work they perform an integral part of the business?

Factor 6: Skill and Initiative 

Does the worker use specialized skills to perform the work? Do those skills contribute to business-like initiative? Is the worker dependent on training from the employer to perform the work? If the worker brings specialized skills to the work relationship, it indicates that the worker is an independent contractor.

• Interpretation: Any worker can be skilled, so the fact that the worker is skilled doesn’t indicate one status or the other.
• The Focus: Does the worker use their skills in a manner that evidences business-like initiative? 

The Totality of Circumstances

None of these factors alone are considered definitive. Instead, the DOL looks over the totality-of-circumstances, analyzing the entire working relationship before making a determination.

The primary question the test seeks to answer is this: As a matter of economic reality, is the worker dependent on the employer for work, or are they truly in business for themselves? (See: Fact Sheet 13.)

According to the DOL’s announcement (which I recommend reading in full), the March 2024 Rule returns to “an analysis that is more consistent with judicial precedent and the Act’s text and purpose.” Once again, these are not “new laws,” they merely clarify the application of existing laws. 

Regardless of your situation or position in the salon, it’s worthwhile to read every bit of guidance provided, whether the law itself is changing or not. (I say it a lot, but know your rights.) Once you understand the factors, you’ll know misclassification when you see it. 

In some ways, I sympathize. None of us should be forced to learn skills we don’t need. I get it. I really do.

But unlicensed people don’t get to argue that professional licensing shouldn’t exist. Without a license, Jasmine doesn’t have the training to understand all of the risks an unlicensed person in a salon poses to the general public or the massive liability they pose to the salon owner. 

It’s true that licensing requirements were heavily lobbied for and influenced by for-profit beauty academies looking to bloat their bottom line, but regulations requiring education and licensing were also created to attempt to solve problems and establish a shared value system around objectively good practices.

While each state has different regulations, most overlap in a few key areas. By and large, every regulated state agrees:

• Clients have the right to expect a clean and safe salon experience.
• Those seeking to enter the beauty industry have the right to an education sufficient to guarantee that they can competently perform their duties in the salon while protecting themselves and the public from communicable disorders.
• Professionals and clients have the right to a clean, compliant workplace.
• As an industry, professionals are obligated to ensure all of the above or face penalties including fines, license suspensions, and—in extreme cases—permanent license revocation.

Our state board regulations ensure that professionals and clients alike understand how and why we disinfect our tools between clients, what the standards for salon cleanliness are, what licensing documentation they should expect to see, and where that documentation should be posted in the salon. 

Our licensing requirements guarantee that professionals can—at a very minimum—respond to common first-aid situations (cuts, burns, falls) capably, mix and use state-approved disinfectants properly, and identify symptoms of communicable skin disorders. They also ensure that we understand and practice Universal Precautions. 

These regulations aren’t designed to necessarily serve us; they’re designed to protect the public, including the business owners who are legally liable for anything a service provider does in their facility.

I agree that experience isn’t worthless. However, just because you’ve been doing something for years doesn’t mean you’ve been doing it correctly or safely. Without professional training, you won’t learn that until you happen to make a very, very big mistake (like causing a pink-eye outbreak because you didn’t know not to reuse mascara wands). 

You don’t know what you don’t know.

State Board licensing standards and regulatory requirements are the methods by which our state legislators reassure the public and our employers that we should know what we’re doing—and that if we screw up, there are mechanisms in place to hold us professionally liable for it. The public shouldn’t have to rely on local courts to determine gross negligence when a framework can be provided that guarantees a professional who acts recklessly or carelessly will face professional consequences, like losing their ability to ever legally work in a salon again. These regulations provide protection against malpractice. They’re meant to strongly incentivize licensed professionals to play by the rules and take their obligations to their community seriously. You aren’t supposed to like them.

Instead of arguing that licenses shouldn’t exist, Jasmine should be fighting for the creation of smaller licenses for specialized professions. There’s no denying that makeup artistry is a separate profession from cosmetology. Makeup artists could go their entire careers without ever having to learn anything about mixing chemicals, using and disinfecting sharps, or applying hot wax to a client’s skin. These are things makeup artists don’t do.

Precedents for crafting smaller, more specific licenses already exist. Various states in the U.S. have introduced specialized licenses for services such as hair braiding and body wrapping, acknowledging that these professionals have different needs compared to full cosmetologists. This move towards specialized licenses recognizes the unique skills and training required for specific services, making it more accessible for professionals to enter the industry without undergoing extensive training irrelevant to their specialization.

Does a professional who plans to specialize in braiding need to spend 300 hours learning how to do manicures and pedicures? No. Because that isn’t part of their job. Why should a makeup artist be required to learn how to do hair and nails?

It’s tough being caught in the catch-22 of needing to work to pay for the licenses but needing the license to legally work. Instead of limiting herself to keeping her makeup business as a side-hustle, and risking legal repercussions if caught, she needs to think outside the box and find a legit way to get her needs met and her career on the best possible path.

If I were in Jasmine’s position, I would petition for alternative certification programs, advocate for specialized licensing, and collaborate with the board and other industry peers. It’s far past time for our industry to find innovative, accessible pathways to professional legitimacy that align with individual career goals and legal requirements. 

Today, the salon owner charged my client’s services before the service was over. She refused to give me the money and told me she would put it towards rent, but I never agreed to this, nor did I agree to her taking a percentage from both the sale and my tip.

When I said that I wasn’t going to tolerate this, she claimed that it couldn’t be helped because the client paid with a gift card. I know the client didn’t pay with a gift card, but that’s beside the point, because the owner knows I don’t accept her salon’s gift cards. (Besides that, nowhere in my lease does it say anything about her stupid gift cards!)

After I caught her in the lie, the owner said I’m no longer allowed to receive any walk-ins. Is this legal? Can she seriously refuse me walk-in clients?

I’ve already addressed this topic, but your story provides important insight.

You did everything right. You took every step you could to prevent being taken advantage of. When your landlord pushed your boundaries, you responded immediately. Few have the confidence to do so, and I’m glad to hear you did. Her treatment of you is nothing more than childish, petty retaliation. I’m embarrassed for her.

However, unless your contract states otherwise, you aren’t owed walk-in clients. (More about that here.)

What can you do about it? Unfortunately, not much. You could bring her to small claims court, but the filing fee will likely cost more than the disputed amount, and unless you really want to make a point, it might not be worth your time to pursue.

In these situations, the only thing you really can do is tell her to make things right, or you’ll warn others, starting with your fellow renters.

If she refuses, make good on that promise. Only state what you can confirm—what you’re willing to swear to in court under threat of perjury. Don’t embellish or get creative. Stick to the facts, and keep your emotions in check.

If she threatens to bring you to court—good. Let her. Be sure to update us so we can hear how she rationalized the theft. 

I’m sorry this happened to you. Sometimes, even when you do everything right, you aren’t entirely safe, and even if you’ve clearly been wronged, you might never see justice.

Take a deep breath. Now read this handy list.

Dress conservatively and professionally. No sandals. No jeans. No tank tops. No t-shirts. Dress like you’re going for an interview at a law firm or to a congressman’s funeral. This is not the time to make a fashion statement. Dressing sexy will win you no points here. If you chose to wear a skirt, make sure it’s no shorter than two inches above your knee.

Courts are weirdly formal places. Prepare yourself accordingly.

Keep your makeup minimal and natural. Don’t get crazy with that eye shadow. You want to be taken seriously, so don’t walk into the courtroom with you eyelids covered in rainbow glitter. Remember, you’re entering a place where people tend to care a whole lot about presentation and decorum. Some judges read a little too deeply into fashion choices and what they say about people.

Remove the metal from your face. If you normally wear facial piercings, take them out. They aren’t appropriate to wear to court. I cannot reiterate this enough times:

As stupid as it is, appearances matter. A lot.

Don’t wear a belt or complicated shoes. You will have to remove your shoes and walk through a metal detector before you can enter the courthouse. Make it easy on yourself by leaving your belts and metal accessories at home and wearing flats you can slip into and out of easily. Don’t create unnecessary stress. You’ll likely be a hot mess of nerves to begin with.

When it’s your turn to sit in front of the judge, follow these rules.

Don’t speak unless you’re spoken to. Never show emotion during your opponent’s testimony. You can be nervous, sad, and scared. You cannot be angry, loud, or disrespectful. Judges have zero patience or tolerance for belligerence.

Don’t roll your eyes, sigh, or draw attention to yourself.

Even if the other party lies through their teeth, keep your mouth shut and your attitude in check. Write down your objections and bring them up when it’s your turn to speak. Put on your best poker face and be patient.

Always address the judge with “Your Honor” or “Sir” or “Ma’am,” and never use slang or profanity. When you’re asked a question that requires a yes or no answer, always say “yes ma’am/sir/Your Honor” or “no ma’am/sir/Your Honor.” Never say, “yeah,” “nope,” or “I dunno.”

Don’t go in demanding justice. Do not bark orders at a judge or demand anything from them. Sure, your tax dollars pay their salary, but they don’t work for you. 

You’re at court to reach a peaceful, reasonable resolution, not to fight with your opponent.

Both of you believe you’re right. You can’t come to an agreement, so you are in court to ask the judge to come up with a fair solution based on the information and evidence that each of you collected. Approach it from that perspective–it’s not about winning or losing but having a neutral party evaluate each of your positions and make a decision for you.

You can think that your opponent’s actions were wrong. You can feel your opponent’s action were wrong. You don’t know they were wrong or not. The judge determines that. (Even if you really do know and you have fistfuls of statutes and evidence to support that argument, never go in with the arrogance of assurance.)

In small claims court, don’t be afraid to tell the judge that you’ve never been in court before and you may have questions during the proceedings. Small claims courts are generally pretty mellow. Nobody has attorneys and judges don’t expect you to be competent in court procedure. If you don’t understand what a judge asks of you or what they mean, politely ask for an explanation.

Keep your testimony brief and only testify to what you can prove. This is so, SO important. Do not pop off with a bunch of irrelevant, unverifiable testimony. If you cannot prove a claim, the judge will likely disregard it.

Bring evidence in triplicate. One for you, one for the judge, and one for your opponent.

A lot of professionals panic at the thought of going to court. Don’t be scared. The majority of the time, you’re going to end up in small claims, where the stakes are low and the process is pretty informal. You don’t need an attorney, the rules are relaxed, and if you’re the plaintiff, generally, the worst that can happen is that your case gets dismissed and you lose your filing fee. No biggie. In other proceedings, you’ll have an attorney representing you and doing all the heavy lifting, so relax and focus on controlling the one thing you can control—yourself.

Have you ever been to court? What for? Were you scared? What happened? Tell us about it in the comments!

A handful of these owners, however, were proud of their commitment to abusing their workers, acting as if surviving the abuse were a cultural rite of passage and a necessary part of every professional’s growth.

“We don’t believe in employment, so everyone here is independent.” my client said.

“Your current arrangement puts you in a very vulnerable position from a legal perspective because you’re exerting managerial controls you have no right to exercise,” I replied. “You’re also making less money than you would be making if everyone were properly classified and legally compensated. So, why don’t you ‘believe’ in employment?”

“Because that’s just not how this industry works. We just don’t believe in it. Everyone here is independent and they are in charge of them. If they want to be successful in this business, they need to work for it, promote themselves, and climb up the way we all did. That’s how we drop the dead weight from the industry.”

The professionals in this salon weren’t independent by any definition of the term, legal or literal. They were very much misclassified employees and the salon owner (who wanted to have and eat all of the cake) was willingly and knowingly committing tax evasion, wage theft, and fraud—and bragging about it like they were virtues or deliberate professional development strategies instead of extremely serious and highly punishable state and federal crimes.

“We have to pay commission-only! Why would they work if they’re getting paid to just sit there?”

Like it or not, salon owners, you’re required by federal law to ensure prevailing wage compliance. “Commission-only” is not and has never been legal and calling an employee an “independent contractor” doesn’t make them one.

I’m accustomed to this entire process, having had this exact conversation hundreds (if not thousands) of times with salon owners over the years. First, they boast about how industry abuses are part of our “culture.” They lament the changes they feel “forced” to make. Then, they try to defend their indefensible actions and behaviors by arguing that they somehow make our industry and the workers in it “stronger.”

“My employees pay for their own product,” another client explained to me. “That’s their responsibility and a cost of doing business in this industry. If they can’t afford it, they need to find a new career. Why should I be paying for their product?”

“Because they aren’t business owners and never asked to be burdened with the responsibilities of a business owner,” I said. “You’re the one who sets the prices, creates the schedule, and handles the appointment book. How can they offset their costs and be profitable when you’re the one who determines what their services are worth, when they can work, and how many clients they get each day? That’s not independence. That’s you pushing your costs of doing business onto misclassified employees. If they fail, it’s because you didn’t take responsibility for managing them properly, not because they aren’t cut out for this industry.”

Over the last two months, I’ve been reminded of these salon owners and how proud they were of not taking ownership of their businesses. I can’t help but think about how they would present their laziness, irresponsibility, and lack of consideration for the welfare of their employees as a series of clever management tactics. Even now, I am astounded by the mental gymnastics these owners do to attempt to justify themselves.

Every problem in the salon is the fault of the professionals:

If the salon isn’t making enough money, it’s not because the owner hired more people than the business could justify hiring and didn’t bother to schedule them strategically, it’s because the employees are not marketing themselves well enough.

If the employees quit because they couldn’t afford to work for free, it’s not because the owner refused to pay the prevailing wage in accordance with state and federal law, it’s because the employees “couldn’t compete in the industry.”

If the owner ends up in hot water with the IRS for misclassifying their employees as independent contractors, it’s not because the owner was exploiting them and willfully breaking the law, it’s because the employees had a “personal vendetta” against the salon owner.

There’s no attempt from willful violators to take responsibility for setting their workers and their salons up to fail. There’s no remorse. Instead, there’s a dismissive wave of the hand, an irritated eye roll, and muttered resentments.

When talk turns to actual management strategy—with regards to talent acquisition and retention, for instance—the callousness really becomes apparent.

“Employment benefits for hairdressers? Sick pay?! Nobody does that! Why should we?”

For years, I’ve wondered what makes people in our industry this way. What gives these owners such a strong sense of entitlement? What makes them think the best way to develop a professional is to baptize them by fire? Why do they believe professionals in our industry aren’t worthy of guaranteed wages, paid time off, or health insurance? Why can’t they see that this lack of security is directly tied to our high attrition rates? How do they not realize this asinine attachment to an “eat or be eaten”/“survival of the fittest” mentality undermines the legitimacy of our profession and damages their own salons?

Why are they bragging about being a terrible place to work as if that’s a point of pride akin to a company value rather than a profound embarrassment and a scathing indictment of their irresponsibility?

COVID-19 killed the fabricated nobility of this sink-or-swim narrative dead in the two weeks it took for exploited professionals all over the United States to realize what their self-employed status actually meant.

Non-compliance is and always has been the easy way out for salon owners who wanted to own a salon but didn’t want to do the actual work required to become a good salon owner. I’ve long suspected these abuses were never truly the result of an ideological choice but have been presented as one to convince professionals of their validity. This lazy, shitty approach to business ownership won’t survive the post-Covid economy, and I’m glad for it.

A good deal of non-compliant salon owners are in for a rude awakening when the stay-at-home orders are lifted. The pandemic has made evident the serious flaws in our industry’s approach to employment. It’s not just the professionals non-compliant owners will have to answer to, but their clients and the public at large, as these issues have been gaining more attention over the last five years.

“Even documented workers will have a challenging time accessing the benefits they may be entitled to due to the pervasive, illegal payment practices that pervade the nail salon industry, including underreporting earnings, or failing to keep records altogether.”
-Allure

There problems aren’t new, they just impacted individuals previously, and therefore often went without much public notice. COVID-19 put all exploited workers in the same boat pretty much immediately, and that sudden education on an industry-wide scale changes everything. As an advocate for beauty workers, I can’t help but appreciate the poetic justice and rejoice in the sudden and (hopefully) final end to this idiocy.

Our industry has used “girl power” to manipulate people for as long as I can remember, promoting our largely female-founded companies as mechanisms driving female empowerment and allowing beautiful, well-marketed salons to grace the pages of popular fashion and lifestyle magazines, all while conveniently ignoring the fact that many of these same female founders owe their success entirely to the (mostly female) employees who quietly accept their exploitative practices.

The hypocrisy has annoyed me for decades…but those were the Before Times. Things are certainly different now, so the days of brainwashing workers to confuse acceptance of abuse with “empowerment” are finally over, once and for all.

[Related Post] “We should not be praising exploitative salon owners for providing work opportunities for immigrants any more than we would praise pimps for providing protection and work opportunities to women.”

Education is the true mechanism for empowerment. Educated professionals confront exploitative salon owners. Their knowledge gives them the strength to demand better. It motivates them to share what they know with others. For the last ten years that I’ve been working to provide accessible information to the industry and helping non-compliant salon owners become legitimate employers, the transition has been slow and painful, as willfully non-compliant salons were often only forced to change when an employee or group of newly-informed employees filed complaints with the WHD and IRS.

That time is suddenly now. Like the misclassified employees who had to contend with the possibility of being ineligible for unemployment during a pandemic, the salon owners who exploited those employees (intentionally or accidentally) are finding themselves in the same boat, too.

We’re likely to see a massive shift in how salon owners approach business management.

What form that shift ultimately takes—whether we see more salons revert to rental or become overwhelmingly employment-based—remains to be seen, but one thing is clear: non-compliant salon owners with a strong desire to “stick it to The Man” by way of screwing their employees over will have to figure something else out, because nobody in our industry can unlearn what they now know. They’re wiser and harder now, and certainly won’t tolerate “customary” abuses any longer, no matter what ridiculous narrative that abuse is dressed up in.

We can’t tell the future, but we should all be planning for a variety of potential outcomes, the most threatening of which is extended economic strife.

Thus far, the government has been wrong about basically everything. Expect them to also be wrong about how long we need to distance ourselves from others and how long our businesses will need to be closed for. I consider their “15-day” estimations to be absurdly optimistic (and so do a lot of people far more qualified than me), given that defiant, ignorant people exist in disproportionate numbers here. Our government doesn’t have the authority or the capacity to enforce national quarantines nor have they yet approved a plan to pay anxious Americans enough to stay home.

What worked in China likely will not work here, so it wouldn’t hurt for you to assume that COVID-19 and the economic consequences of the pandemic will persist for much longer than projected.

Plan for the worst.

I good at my job because I’m pragmatic. I consider unexpected outcomes and unintended consequences a lot of other people miss. I’m able to foresee certain conclusions because I am always asking myself a series of questions, like, “Which behaviors does this policy/practice reward and which does it discourage?” and “If this compensation system were a game, how would I break it?”

Right now, the most important question every one of you should be asking is this:

Three months from now, which steps will you regret not taking?

Base your answers on the worst possible circumstances. I’ll help you identify those, in case you haven’t yet:

• The virus continues to be a problem for the next year (at least), with salons ordered to close for weeks at a time as COVID-19 continues to infect the populace in waves.
• The moratorium on bills that people are now calling for never passes.
• The government provides relief, but it’s too little too late, and you aren’t eligible for it anyway.
• The economy is thrown into a depression that makes the 2008 recession look like a cakewalk.

Those are your worst possible circumstances at this very moment. If all four of these things remain true, what will you regret not doing right now?

Don’t be caught with your ass in the air. Get ahead now. Every day counts.

I’m a human person. What do I do?

Stop circulating in the public. If you must, start contact tracing. Write down the names of every person you come into contact with each day and where you were in contact with them.

If you think contact tracing is too much work, you are circulating too much.

These records are invaluable to healthcare workers and the CDC when someone gets sick because they can be used to quickly track down the person who infected you and notify everyone you’ve been in contact with since.

I’m a business owner. What do I do?

Close your salon, even if your local authority hasn’t ordered it. A responsible government would have taken a cautious approach from the beginning. We haven’t. Instead, we wasted critical weeks and continue even now to put people at risk by allowing too many of them to mingle freely while a novel virus we understand less than dick about spreads like wildfire.

Because we work so closely with the public, we present a massive public health threat right now. Stop being part of the problem. Close up shop until tests and masks are freely available, the danger of overwhelming our hospitals has passed, and contact tracing becomes the rule for everyone.

Those who are unwilling to make sacrifices now will continue to exacerbate the problem, causing it to continue indefinitely.

The fastest way for us to get back to work is to shut everything down until we’ve identified and isolated the ill.

When it comes to finances, start researching the relief programs that may be available to you. This tool made by Forbes can help.

Do not—I repeat—DO NOT apply for ANY loans or lines of credit out of desperation. Harsh truth time: Even if you manage to obtain a massive loan (which is unlikely AF now that lenders are getting nervous), your salon could still drown in the multi-year economic wake of coronavirus, leaving you destitute.

You should only accept debt when you’re confident it’ll result in growth, enabling you to pay it off, otherwise you’re performing a blood transfusion on a dead man.

Never forget that unjustified optimism brought us to where we are today. “One day, it’s like a miracle, it will disappear.” Remember that? Feels like a lifetime ago, right? Don’t make the same mistakes our government officials made when you hear them trying to convince you that the economy will “bounce back.” The best a realistic optimist can tell you right now is, “Nobody knows.” Anyone telling you anything else about how COVID-19 will affect the economy is putting your livelihood at risk.

As a consultant, I can’t in good conscience advise salon owners to gamble their future on a recovery that likely won’t come in time for their businesses. If you have to cut your losses, cut them quickly and seek reemployment. Retreat now and live to fight another day.

Are there any alternatives to closing up shop? Totally, but it will require revolutionary thinking and ideal pre-COVID financial circumstances. Owners who were once competitors will need to join forces, partner up, pool resources, and work together. If you’re determined to fight to the death, start reaching out to like-minded salon owners and professionals to form strategic alliances now because the saying, “There are more than enough clients for everyone,” won’t be true when we all finally emerge from our homes.

I’m an employee. What do I do?

If you were laid off (or are sitting at home uncompensated), try to take advantage of state resources like unemployment. Instead of watching the news all day, think of ways you can work and generate an income outside of the industry. If you have an opportunity to pursue any of those options, I would advise you to take them. Now.

Do not “take one for the team” and work in the salon for free unless you genuinely want to and can afford to volunteer.

If your employer has earned some goodwill from you, try to extend some grace to them. This is uncharted territory for all of us.

I’m an employer. What do I do?

Whatever you can. Hopefully, you took my advice and stockpiled a bunch of cash in an emergency fund and have enough to compensate your professionals for a few weeks (at the very least). If you can’t, you owe it to them to communicate that immediately and give them the opportunity to find other work and/or seek employment elsewhere.

You should also research the relief programs that may be available to you. This tool made by Forbes can help.

How will this impact the industry long-term? Should I find another career?

Let me preface this with the following: I hope like hell that I’m wrong.

As much as I’d like to lift your spirits during this crisis, I can’t.

The fact of the matter is that we—as a nation—very likely are not organized, disciplined, or selfless enough to “flatten the curve,” “slow the spread,” or “eradicate” COVID-19. We’re already seeing our efforts fall apart nearly every step of the way so far. Unless something miraculous happens, our businesses and our incomes will be in jeopardy for a long while and our clients will be hesitant to return even after their income starts to recover.

The last recession, I clung to this industry like a drowning woman clings to a life raft, hoping that if I just waited everything out, things would get better. I told myself that I had invested so much already, it would be foolish to quit. I said, “Everyone needs haircuts! We’re recession-proof! Any day now, we’ll be back to normal. If I leave the industry, I’ll be betraying myself because I love this job.”

Please, don’t do what I did.

If I had to do it all over again (and it looks like that might be the case), I’d have found a position in any industry that could compensate me steadily so I could routinely pay my bills. Instead, I worked part-time at two salons (three, during off-season), averaging 90 hours per week and going anywhere from one month to six weeks without a single day off, yet no amount of hard work could close the gap between my pre-recession expenses and my post-recession income. I gave up my house and sold what I could. I lived for years without cable, internet, or a cell phone, cutting coupons and relying on sales to put food on the table.

I realized too late how nonessential our services are.
I didn’t have a backup plan.
I leaned in when I should have been dipping the fuck out…at least temporarily.

Back then, I rarely had more than $400 in my bank account. Sure, I survived, but it was stressful and I cried a lot. I was fortunate to have a job at all, let alone three. My managerial qualifications were likely the only reason I didn’t end up indefinitely unemployed like so many of my colleagues.

If you’re barely scraping by right now or are new to the industry and haven’t built your following, it’s okay to cut ties with for now, especially if you aren’t properly classified or legally compensated. In fact, if either or both are the case, I would urge you to start researching new jobs ASAP. Don’t waste time waiting and hoping, like I did. Weeks quickly stretch into months, and months into years. The longer you wait, the easier it is to justify waiting even more. (Our brains are real bastards.)

Not a single one of us owes our loyalty to this industry. There’s nothing noble or honorable about going down with the ship during a global crisis. Do what is best for you and your family. Pay your bills. Feed your kids. Come back when you can afford to. A lot of salons will be forced to close, but our services will always be needed in our communities.

As for the future, I expect, at the very least, we’ll be repeating the past. Because the 2008 financial crisis traumatized me for life, it’s still very fresh in my mind.

Here’s what happened:

• Clients were laid off and quit coming to salons.
• Salon owners slashed prices, engaging in price wars with local competitors that continued to drive down prices.
• DIY products and video tutorials proliferated the market.
• Professionals whose commissions constituted a large part of their wages quit to find employment elsewhere.
• A large chunk of salon owners couldn’t cut costs or increase productivity to the levels necessary to compete with other salons or retail alternatives and were forced to close.
• Beauty schools saw critical declines in enrollment levels, which caused many to cut programs or to close entirely.
• Finding qualified employees became exceptionally difficult as people fled the industry and schools became less accessible. Salon owners also couldn’t afford to compensate professionals competitively at the absurdly low price points cash-strapped consumers demanded, making a difficult situation outright impossible.
• The industry’s plague of labor abuses became even more commonplace, fragmenting our industry into a legion of microsalon owners who would rather work for themselves than be exploited, crushing the already ailing employment-based salon model. The increase in these abuses provoked me to start blogging about them in 2010.
• Lacking the distribution provided by employment-based salons, salon-exclusive brands turned to retail outlets to move product. As we were already beginning to see our clients choose to buy from online retailers, this punch proved to be the final blow for many salon owners who relied on those retail sales to subsidize the salon.
• Legislators pushed to deregulate our industry. (But that’s nothing new.)
• A bunch of salon owners and professionals remained in denial about their economic reality for far too long, wasting valuable time “doing business as usual” when they should have been rapidly evolving in an effort to compete or dropping out entirely.

Nobody can say for sure how things will shake out, but I’m operating on the assumption that we’re facing a big hit that will impact us for a long while.

What I’m Doing

It became clear to me that COVID-19 was going to be a serious problem the first week of March. My family has been inside since. I never thought I’d be glad to be born and raised in the armpit that is the state of Florida but growing up in a place where state-wide emergencies are routine prepared me for this well (as did being nearly bankrupted during the recession). We have a bidet and cloth diapers, so my family of seven won’t exacerbate the inevitable toilet paper and diaper shortages. We’ve started a large vegetable garden to help curb our grocery needs. Thankfully, I eliminated my debts and saved aggressively over the last decade, so I can afford to expand my skill set by earning a nanodegree in full stack development online—just in case I have to change careers. I started the course a few days after we voluntarily quarantined ourselves. Both the immediate and long-term future are virtual so that’s where I’m focusing my attention.

I encourage you to also start thinking about your future and coming up with contingency plans, at the very least.

Honestly, over the last month, I’ve been a mess. I’ve been overwhelmed by the horror stories from professionals and owners that I’ve formed relationships with over the last decade. A lot of my consulting clients have only just recovered from the last recession and were finally building wealth. Nearly all are women with children to support. The thought of them losing everything they worked so hard for feels like a punch to the chest.

They busted their asses. They poured everything into their dreams. They deserved much better.

You all deserve better. That’s why I won’t lie and tell you it’ll all work itself out. That attitude ruined a lot of people for a lot longer than it should have fifteen years ago. If you currently know or suspect, based on your current financial situation, that you or your salon won’t make it—get out early.
Please.

WHAT DID YOU SAY?! Why aren’t you telling people not to panic?!

Because you should panic. While the media focuses largely on medical supply shortages and dehumanizes and diminishes the victims by constantly referring to “the numbers” (because god forbid we call them “people”), thousands of workers are losing their jobs, to the point that the White House is asking states not to release their unemployment statistics for fear of causing more market chaos. Businesses are already shuttering with no plans to reopen. Every day we go without aid to the people, their debts (and ours) accumulate. Meanwhile, the only option for business owners is to take out loans—if they can find and qualify for them.

If you’re holding out hope that the government will sort it all for us with bold, decisive action—stop. Thus far, they’ve done nothing to earn that trust from you.

What they have done a whole lot of is lying. That’s not even just my opinion. That’s a verifiable fact. Now, the same people who told you COVID-19 was a hoax are in charge of “saving” the economy. Call me cynical, but I wouldn’t be so quick to put my confidence in a positive outcome.

Panic, but channel that energy into something meaningful and productive.

I am where I am professionally because I tell the truth, regardless of how unpopular it could make me. I’m trusted because I genuinely care about the welfare of the people who work in this industry and want nothing more than to see us all thrive. I take my responsibility to all of you very seriously, which is why I’m here forcing everyone to acknowledge what no one wants to admit. I can’t advise anyone to sacrifice themselves on the altar of industry loyalty.

The facts are clear: the vast majority of beauty workers and salon owners will not survive this economic downturn.

I don’t want to hear a bunch of bitching in the comments. Don’t tell me it’s “too early.” I brought receipts. And don’t you dare tell me I’m being “negative.” This system has broken in ways we, as an industry, cannot fix. We have no control over any of this. Now is not the time to “stay positive.” Now is not the time to “wait and see.”

Now is the time to set our emotions aside, get proactive, and take our own bold, decisive actions to save ourselves and our families. We can mourn every single one of our countless losses later.

When I sat down to write this article, I wanted to be positive. I really did. The idea of publishing it has kept me up at night and I’m not sure how long it’ll be before I can stomach sharing it on the site’s social media accounts. The last thing I wanted was to kick at you while you’re down. I’m sorry, but where our industry is concerned, there’s little to be positive about.

Things don’t just look bleak, they look downright abysmal, and when your savings is dwindling and the bills are piling up with no resolution in sight, you don’t have the time to waste praying for a miracle. Brace yourselves.

No amount of motivational platitudes or positive thinking will alter the fabric of our new economic reality.

We’re facing an unprecedented stop in economic activity. If you’re a “ride or die” professional, great. Only you know what’s best for you, but keep your sunshiny, sugar-coated bullshit to yourself. While you try to will the economy into submission with the sheer force of your happy thoughts the rest of us will be facing a broken, traumatized populace that won’t be able to afford the luxury of our services for a long time and probably won’t be comfortable being in such close proximity to others when they finally can. If you aren’t taking this seriously by now, you aren’t paying attention.

I care about this industry but I care about people more. Many of you will have to make tough, agonizing decisions. A lot of you will have to leave. If you do, don’t worry—the industry isn’t going anywhere. It will be here when you get back.

If you want an efficient, stress-free tax season, you need a system that streamlines your recordkeeping throughout the year.

Salon professionals need to stay ahead of the game when it comes to handling their taxes. Here’s how to make it happen. 

1. Use Bookkeeping Software That Syncs With a Mobile App

If you aren’t using bookkeeping software, what decade are you living in? Don’t get me wrong, I’m the kind of person who carries a physical planner and must hand-write things if I hope to remember them, but I refuse to go back to the days of keeping a manual ledger.

As careful as we are, we’re not perfect.

Working in our industry often involves a lot of cash changing hands, which doesn’t always have a paper trail. Around this time of year, I spend a lot of billable hours helping build that trail for salon owners and renters who stuff cash in their pockets throughout the day and fail to record their transactions. Every point-of-sale app facilitates cash tracking and nearly every single platform comes with mobile app synchronization, making recording sales of all types as easy as opening the app and tapping a few buttons.

If you’re not interested in an actual point-of-sale software, you can create a document on your phone and track transactions there throughout the day. I recommend saving this document to the cloud (Google Drive, OneDrive, Dropbox—take your pick) so it saves automatically and is accessible from multiple devices.

No matter which method you choose, your transactions will sync with the cloud. You can classify it as a business transaction, and with a log kept every day, your taxes will be easy once it is time to file. 

2. Make Expense Tracking Part of Your Purchase Process

I’m not willing to stoop so low as to include gifs in my posts, but I’ll link them. This is me, talking to you right now. This is you, next tax season and every season that follows.

If you have time for Instagram, you have time to snap your damn receipts.

Create a folder on your preferred cloud-based storage system and call it “[YEAR] Receipts.” Whenever you spend money on a business expense, snap your receipt and save the picture to that folder.

While the cashier does their thing, I’m waiting with my phone, card, and receipt envelope in hand. I grab a quick pic of the receipt and toss it into the envelope. (I prefer to buy this pack of 12 and use one each month.) When I purchase something online, I immediately print, snap, and store the purchase order.

At the end of the month, print out your business bank statement and fold it like a letter. Slip the receipts inside. Write the total revenue on the left side of the folded statement and total expenses on the right side. Put that statement/receipt bundle into your receipt envelope and toss that envelope into the battered shoe box you’ve been using to store your collection of crumpled, faded receipts up until this point.

Every time you fail to deduct a business expense, you’re losing money. Stop that.

The better you keep track of everything that you spend, the better prepared you will be to handle the tax write-offs for your business. 

3. Pay Your Estimated Taxes on Time and in Full

If you’re self-employed, pay your estimated taxes each quarter to avoid potential fees, penalties, and big tax bills.

Self-employment income isn’t subject to withholding. What does this mean? If you don’t withhold and remit taxes quarterly (breaking your annual tax due into a quarterly payment), you’ll likely end up with a really large annual tax bill come April.

You must pay at least 90% of your estimated annual taxes to avoid penalties and fees.

Sign up to use the EFTPS (Electronic Federal Tax Payment System) through the IRS. Paying quarterly is quick, easy, and free. Payments can be made immediately. If you like getting money back from the IRS or hate the idea of a large tax bill more than you hate the fact that the government will be earning interest from your overpayments, contribute more than you anticipate owing.

You can download The Salon Professional’s Guide to Quarterly Tax Payments here.

4. Encourage Digital Payments

Apps allow people to use credit and debit cards, PayPal, Apple Pay, Google Pay, Cash App, and other services. Give your customers as many ways to pay digitally as possible. These services link payments to your bank account, giving you cleaner transaction records.

businesses that don’t accept digital payment options will fall behind.

Just as cards replaced checks and cash, digital payment options are quickly rising in popularity, replacing cards. In the next ten years, people will increasingly use smart devices (phones, watches, etc.) to process transactions. This is a trend, not a fad. Get ahead of it.

Contrary to popular belief, business owners actually aren’t required by law to accept cash. If you want to fully automate your transaction tracking process, you can get real radical and stop accepting it altogether.

I quit taking cash years ago for a variety of reasons. Primarily, I consider the possession of cash a liability, and I really didn’t like the tedious process of tracking cash transactions.

5. Choose an Entrepreneur-Friendly Bank

Be selective about the banks you do business with and don’t be afraid to switch when a better opportunity presents itself. Every bank offers special programs and incentives to lure business owners. Take advantage of them.

If you don’t have one already, immediately open a business checking account.

I can’t express this clearly enough—nothing annoys me more than having to go line-by-line through a client’s monthly personal bank account statements to determine which transactions are business-related and which aren’t. I’m willing to bet you don’t want to endure that torture so do yourself (and/or your accountant) the massive favor of separating your business finances from your personal. This, combined with the envelope/snap system, will turn your tax filing into an hour-long data entry task instead of a nightmarish week-long hellscape.

6. Keep Informed of IRS Changes

The IRS makes changes to the law each year. Some will be inconsequential, while others will directly affect the type of business you do. The IRS has social media accounts on Twitter and Facebook, but they also have an email newsletter. The newsletter is written for tax professionals, but anyone can sign up and receive updates.

7. Rectify IRS Issues ASAP

Often, consulting clients tell me they’re scared to file taxes because they’ve failed to file for so many years and/or have a lot of unclaimed income. As much as I hate to be the bearer of bad news, filing your taxes isn’t optional and constitutes a big part of your responsibilities as both a citizen and business owner.

Each year you delay resolving outstanding IRS issues, the worse the consequences will get.

All is not lost if you run into tax trouble. Late filing penalties and payments aren’t ideal, but they are not the end of the world. The IRS works directly with taxpayers to create realistic payment plans.

If you’re hiding from the IRS, contact an Enrolled Agent to advocate on your behalf. They’ll represent you in your dealings with the IRS to help you get the best outcome.

8. Hire a Tax Pro to Assist You

If you’ve read this entire post and have determined that you aren’t a “tax person” or an “accounting person,” find someone who is.

People who struggle to keep records and stay organized should seek help from a tax professional immediately.

In addition to keeping your records in order, tax professionals can help you put together a tax strategy to minimize your tax responsibility and maximize your deductions. Let them handle the heavy lifting. 

Whether you are a hairdresser, nail technician, massage therapist, or another sort of beauty professional, putting in a little bit of effort every day will result in a quick, simplified filing process. Stop putting off for (a long, miserable) April what can be done easily today.

If you feel like the new kid at school, that’s because you are. You can try to convince yourself you’re not in high school and that you’re surrounded by other grown adults, but the salon environment isn’t your typical office and it’s likely that more than a few of your coworkers are creative personality types.

Are salons drama-filled workplaces? That depends highly on the management.

In a well-managed salon, drama tends to be minimal, with most of it coming from without (clients) rather than within (coworkers). In a poorly managed—or completely unmanaged—salon, bad behaviors often go unpunished. Creating an environment where employees are permitted to reap the rewards of their bad behavior obviously ensures that those behaviors will continue, but it also virtually guarantees that employees—who otherwise wouldn’t need to seek retribution (thanks to management intervention)—certainly will. Every professional I know has worked in at least one miserable salon, spending their days with their ears open, mouths shut, and neck-hairs on end, monitoring the climate minute-by-minute and hoping everyone would just stay cool.

Thankfully, times have changed since the 90’s and early 2000’s. Now, those salons tend to be the exception rather than the rule, so the odds of you ending up in one of those pre-Glassdoor, pre-Twitter hellscapes aren’t high.

You’ll never experience much drama at all in a salon where everyone respects one another, regardless of management.

Make the first move. Introduce yourself to your coworkers at the first appropriate opportunity. It’s normal to feel anxious and uncomfortable when meeting someone new but if you don’t suck it up and follow through, the entire vibe can get real awkward real fast.

Don’t make it weird. Acknowledge people with a greeting when they make eye contact with you. Say hello and introduce yourself if it seems like an appropriate time to do so.

Observe and ask questions. Does the owner prefer for colorists to work with small batches? How is backbar inventory tracked? What washer and dryer settings do you use for towels and linens? Do you immediately dispose of trash bags containing chemicals or wait until the can is full? Where are the garbage can liners and paper towels kept?

Pay attention, newbie. Watching what others are doing when you’re not busy will provide answers to questions you haven’t thought to ask.

Should you have a question, seek answers rather than making assumptions. You may not think twice about tossing the cardboard packaging around a tube of color but if your salon owner uses box tops to replenish backbar, you’ve just messed up her system and compromised the salon’s inventory balance.

Don’t say too much. During your first week or so, listen more than you speak. Get to know more about the people you’re working with. Let them tell you and show you who they are so you know what to expect from them and how to interact with them.

I’ve found that it’s easier to create and maintain relationships with others when you’ve spent enough time learning who they are before showing them too much about who you are. As a rule, I tend to share only necessary information about myself—keeping my opinions to myself and my private life as private as possible. In an effort to establish a connection and bond quickly with coworkers, some professionals make the mistake of oversharing. At best, this is a high-risk strategy. While a well-timed, well-targeted overshare might be just the thing to break a barrier and make a friend or two, you’re far more likely to embarrass yourself. Instead, play it safe.

When you do speak, be sure to think carefully first to keep from being misunderstood—especially if you’re feeling anxious. You’re not being timed or graded. You don’t have to have an immediate answer or response to everything. It’s okay to consider for a few seconds. You could also say, “I’m not really sure what to say about that,” or “I’m going to have to think about how to respond first.”

Nothing annoys me more than when I impulsively say the right thing the wrong way and have to backtrack to explain what I originally meant.

As a writer I may be more conscientious of this than other people, but I think we can all agree that the words we use and the order we use them in matters. It’s worth it to take the time to consider the messages we’re sending, especially during the early days of a new job when your coworkers don’t know enough about you to instinctively know what you mean when you do misspeak. Clear communication is critical (at least for now).

Don’t participate in or react to gossip. Remember when I said “it’s unlikely anyone will give you an orientation?” Notice that I didn’t use the word “impossible.”

One or more of your new coworkers may take it upon themselves to catch you up on the salon’s drama.

You should tell this coworker you’d rather not hear about it, but for most people that can be really difficult to do on the first day or week at a new salon. If you don’t have the intestinal fortitude to tell that gossipy coworker, “Thanks, but no thanks,” remember the following:

• Their version of events may be biased and/or entirely uninformed,
• The coworker you’re talking to is for sure one of the—if not the—problematic employee in the salon. You should probably consider distancing yourself from them ASAP. (Come at me in the comments, haters. I stand by it.)
• Body language is still language.

Your reaction is an opinion.

You might not speak a single word but your raised eyebrows, smirks, and eyerolls communicate a lot. If you’re going to listen, prepare to do so as a blank slate or risk having your facial expressions creatively interpreted by a coworker who—for some reason—felt it appropriate, acceptable, and somehow helpful to dump a bunch of sordid backstory on a new employee.

Don’t bring offensive foods for lunch. I’m not sure why people still need to be told this but nobody wants to spend 1-2 days smelling the stink of your microwaved salmon. If your meal comes with a stench, eat it at home.

Focus on work and be a team player. Build goodwill by doing your job. When you’re not working on a client, look for opportunities to help your coworkers. Sweep hair you didn’t cut, pick up damp towels you didn’t use, wash color bowls you didn’t dirty, set up a treatment room for a service you won’t perform.

Teamwork constitutes a big part of a salon professional’s job.

Be yourself. I saved what arguably constitutes the most critical tip for last. Some professionals feel pressured (or just tempted) to behave unnaturally when they start a new job. Maybe they want to seem more laid back than they normally are, so they set up others’ expectations inaccurately by pretending to be cool with things that secretly drive them insane.

For example, If you’re the kind of person who doesn’t normally share tools, don’t be loaning out your flat iron on Day 1 and your blow drier on Day 2 or you’ll set a precedent that will have you flipping your lid on Day 8.

It’s too hard to force yourself to pretend to be someone you aren’t, especially for long periods of time. During those first few weeks at a new job you’ll be learning a lot about your coworkers, but they’ll be learning about you too. It’s in everyone’s best interest if you make sure they’re seeing your real self and not a character you play while you’re on-the-clock.

Remember, your relationships with your coworkers will strengthen over time, so don’t force things. Be cordial, do your job, and allow yourself to settle into place naturally. Before long, your newness will fade and you’ll be part of the team.

Your financial management system should be simple.

You are not a child. You don’t need 15 different bank accounts, labeled cash envelopes, complicated formulas, or a device that delivers electric shocks every time you reach for your wallet.

You need exactly two bank accounts: business and personal. Your personal account belongs to you. The salon account does not. Why?

The salon’s money isn’t your money.

Don’t think of the salon account as your personal piggy bank. You’re putting your revenue into a separate account for good reason. That money belongs to the business that employs you. Just because you own the shop doesn’t mean you personally own its revenue. Tattoo that into the folds of your gray matter: The salon’s money isn’t your money.

A well-functioning system is an efficient, straightforward one that requires very little upkeep.

Establish a minimum balance.

Your “minimum” balance will vary depending on the scale of your business and your expenses. For microsalon owners, I recommend having a minimum of $5,000 dollars in your business banking account at all times. Depending on the size of your operation, rental and employment-based salon owners may want to maintain a minimum balance of at least $10,000. Building this balance takes time, but once you’ve established it, you should never dip below that minimum unless an emergency situation warrants doing so.

Your minimum balance should be considered your emergency fund. That balance will be your defense against debt, downturn, and short-term financial crisis.

Plan ahead.

If you have plans to expand in the future, start saving now by increasing your minimum balance in accordance with your timeline. Even if you don’t have grand, long-term plans, I still recommend increasing your balance over time—especially if you want to be in business for a long while.

You may not have plans to expand or renovate soon, but in ten years (when your furniture and floors are dated, beaten to hell, and in desperate need of replacement) you’ll be grateful to have the money to cover it.

Calculate a reasonable salary.

Nobody likes hearing this, but salons are high-overhead businesses with slim profit margins. Those are the facts for all but those lucky few who own their buildings (or slipped into uncommonly sweet leases) and can charge the prices necessary to support their operational costs. When you decided to become a salon owner, presumably you accepted the realities of what that means for you and your lifestyle.

Am I saying it’s impossible to live comfortably? Absolutely not.
Will you be living the glamorous, jet-setting life of a billionaire? It’s highly unlikely.

While plenty of dubiously qualified “financial gurus” preach this “pay yourself first” bullshit, salon owners who live and operate in the real world know that you only get paid once you’ve paid the salon’s bills, otherwise you won’t have a salon for long.

The most successful salon owners I’ve consulted with are those who put the salon and its employees before themselves.

Prioritize your work lifestyle over your personal lifestyle. Instead of paying yourself and trying to operate the salon with the leftovers, do the opposite. Salon ownership can be intensely stressful, not just because of the personalities we work with but the financial pressure. You’re trying to create a profitable operation that will provide you with a sustainable income for the long-term, right? You’re spending every day of your life working towards that end. For the love of god, make it easy on yourself by establishing a solid business account balance—even if that means driving that busted ass Toyota another year or two or renewing the lease on your modest apartment.

…but don’t feel hopeless or like you need to sacrifice endlessly. You may never own a Farrari but you won’t be dining on Ramen until you retire either. A little later in this article, I’ll share the personal finance tips that have made me debt-free and provided a really comfortable lifestyle but I’m going to warn you right now—it requires hard work, sacrifice, and discipline. The process sucks.

There is no rosy shortcut to financial stability, no matter what the gurus say. (If there were, I’d have found it and we would ALL be loaded.)

If you’re breaking even, make changes ASAP.

Running in place will get you nowhere, but what do you do if you’re barely scraping by—to the point that budget cuts are literally impossible?

I was there once too—during the recession.

I worked 80+ hours per week.
I kept my A/C off (in Florida) to save on electricity.
I lived in a 500 square-foot, one-bedroom apartment, sleeping on the couch in the living room so my daughter could have her own bedroom.
I traded my ‘04 Civic in for an ’88 Buick LeSabre to eliminate the payments and lower my insurance.
I bought my groceries on sale and hardly ate to save money.
I went without internet and cable.
My cell phone (if you could even call it that) was a Nokia brick fueled by a $20 prepaid card that I only used in emergencies.

Even still, every month was a challenge to break even. There wasn’t one thing I could cut from my monthly expenditures to move forward but running in place wasn’t an option.

What pulled me out was the understanding that nothing short of drastic action would improve things. So, I aggressively searched for a new job in an area that could pay beyond what the salons in my sleepy, seasonal hometown could afford. I decided that any move that wasn’t a step forward wasn’t worth my time. When I finally found the position I desperately needed, I commuted 40 minutes to and from work each day and continued sweating, starving, and coveting my prepaid minutes until I could afford to move closer.

Poverty made me aggressive, professionally. It made me realize nobody else was going to look out for my best interests. Nobody was going to fight for me. So, I cross-checked my pay stubs to ensure I was receiving every penny of my wages. I kept my resume online and kept my options open. I worked hard, ensuring my boss knew I was worth my salary and far too valuable to replace with a cheaper candidate.

For me, these things worked. While you may have your back up against a wall and may not have the ability to pull yourself through a breakeven situation at this very second, I urge you to keep your eyes open for opportunities, and don’t be scared to fight for yourself. Don’t accept lowball offers. Don’t sacrifice for anyone else’s benefit. Don’t be timid when you ask for a raise. Don’t allow an employer to take advantage of you.

Any step forward, no matter how small, is a step in the right direction.

Develop a strong hatred of debt and eliminate it.

Can you afford to light money on fire? Probably not, but even if you can, why would you? I’m going to need you to get a little high and mighty right now.

You are too smart to be burning money on interest.

When you’re paying interest, that’s exactly what you’re doing—lighting money on fire. Every penny spent on interest keeps you further from your goal of being truly free. Take a machete to those binds and pay off your debts as fast as possible so you can start putting that money where it belongs: in your pockets.

The method you use to eliminate debt will come down to personal preference.

Choose one:

• The traditional method, debt stacking, requires you to make list your debts by interest rate in descending order. You hit them from highest to lowest—making large payments on the cards with the highest rate and paying the minimums on the lowest rates. You repeat this process until you clear the list. Debt stacking saves you the most money in interest, but since some of your cards with higher balances might take a while to pay off, you’ll have to wait for that feeling of gratification that comes with crossing debt off your list.
• The debt snowball method requires you to list your debts in ascending order by balance—not interest rate—making large payments on the cards with the lowest balance and paying minimums on the others. Again, repeat the process until you clear the list. This method reverses the pros and cons found in the debt stacking method; the interest costs more, but the psychological payoff is higher.

If you hate interest as much as I do, then the debt stacking method will appeal to you. However, if you need the morale boost that comes with crossing a debt off your list for good to keep you motivated to clear them, go with the debt snowball method. You could even switch up your strategy when you grow bored with one or the other—so long as you’re paying off your debts, the approach doesn’t matter.

Whatever strategy you choose will be the right one if the end goal—a life free of debt—gets achieved.

For me, debt stacking worked best. I couldn’t stand seeing how much of my loan and credit payments were getting burned on interest, so I paid them all off as fast as possible, diverted the money I had been spending on payments into my savings account until I had a five-figure balance and became a “payment-in-full” kind of bitch.

Paying for things with your own money introduces a new level of spending discipline. Trust me, you’ll think twice about how “critical” those new lighting fixtures are and how acceptable the cost is when the full amount comes directly from your account immediately rather than being paid off over the course of several months or years.

Creditors profit by manipulating us with low monthly payments. $180 a month for three years sounds a lot more appealing than $5,000 right now, but most consumers aren’t seeing what that $5,000 balloons into once fees and interest are applied over that three-year period.

If we assume an 19.2% interest rate (average for most credit card companies) and no fees, that $5,000 debt turns into $6,500.

…and that’s only if you never miss a payment.

I recommend using an interest calculator before making major purchases on credit. Would you be willing to pay the inflated price on the item just to have it right now, or can you wait until you can afford to buy it outright?

Keep focused.

Train yourself to see that light at the end of the tunnel, because you will reach it much faster if you exercise financial discipline. What does the end of that tunnel look like?

Once you secure your minimum balance—assuming you have no plans for growth—anything above the minimum balance can be reinvested into the business or become part of your salary.

Do you have any idea—ANY FREAKING IDEA—how awesome the end of that tunnel looks? I do, and so do many of my consulting clients. Staying disciplined can be hard, so if you need help from a friend or professional, ask for it.

Set calendar reminders to reconcile your accounts every week.

I recommend creating an immovable appointment with your bank account every week. I do my accounting every Thursday morning and I follow the same process every time. Your process will likely look different than mine, but here’s what I do, so you can see an example:

Step 1: Transfer Paypal funds to business checking.
Step 2: Pay business bills (if any).
Step 3: Verify account transactions line by line.
Step 4: Transfer salary to personal checking.

How much do I transfer to myself? Typically, $1,500 a week. Sometimes I’ll transfer more but I rarely feel the need to because I’d rather be debt-free and have financial freedom than a difficult to manage “luxe” lifestyle and the stress that accompanies it.

Learn to love the possibilities.

Can I afford a luxury car? Yep. Instead, our family has exactly one vehicle—a 2014 Honda Odyssey (that we paid off a few years ago).

Can I afford a housekeeper, a nanny, and a personal assistant? Totally, but our family can handle all of those things ourselves.

Can I afford a boat, an RV, a motorcycle, and a pair of jet skis? You bet, but I’d rather have a 5-figure balance, thanks.

Knowing you can afford things can feel better than actually owning those things.

Reject flex culture—and if you can’t, redefine it. When you have money in your account, you have endless possibilities. You have endless freedom. You might not be a Mercedes driving HBIC who spends the weekends yachting up and down the coast—but you fucking could be, and that’s enough.

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