Mane Attraction: Lather, Rinse, Revenue | The Hustle | PragerU Kids

Before we start this episode, here's a quick preview of what's coming. Want to build your own business, but don't know where to start? Hear from fellow young entrepreneurs and learn how they turn their passions into profit in this show from Prageru, The Hustle. Enjoy the rest of our free videos for all ages when you subscribe at prageru.com. [Music] What's up, guys? This is Sabrina Cardone. Today I'm in Springtown, Texas to meet a 22-year-old hair stylist whose business of glowing up is blowing up. This is the hustle. I'm Lauren. I'm 22 years old and I run the Main Attraction Salon. Lather, Rinse, Revenue. Meet Lauren Osborne, who is cutting through the competition with her own salon, Main Attraction. >> I have three chairs. I work in one and the other two I rent out. We do hair services. We do washing, curling, chemical services, and this is it. In this episode of The Hustle, we'll learn how Lauren matched a valuable skill with an ambitious plan. We'll also look at how she tracks finances, manages her time and resources, and turns customer satisfaction into steady revenue. When she's not trimming or washing hair, Lauren works behind the scenes. Planning ahead, putting her spin on beauty trends, and using her salon's resources to earn recurring revenue are ways Lauren makes a profit. With an upscale vibe, and cuttingedge enhancements, getting your hair done at Main Attraction is a luxury. Look at this. It's so beautiful. When someone walks in, I greet them. I ask them if they would like a cup of coffee or a soda. I want to make them feel comfortable and at home. >> Lauren's always loves styling hair. Her first clients were her friends from middle school. When I was little, I would do my hair, my friends hair, but I knew I wanted to pursue it as a career in high school. Whenever homecoming came around or prom, I was the hair girl. This is it. That's just kind of what hit me. I wanted to do what I love and what I have a passion for. >> When Lauren graduated, she cut a straight line for cosmetology school. There, she brushed up on her skills. I really worked hard on the services that I wanted to offer. did two semesters of school and then went and took two different tests, a written test and a practical test and then got my license and started working in Bootheran right after. To open her salon, Lauren needed $15,000. It was time to hustle. Starting out in the hair industry, I actually worked a separate job that didn't have to do with hair, just so I could save a little bit of money and build my clientele at the same time and make sure I could support my business. So after about 6 months, I quit my second job and I was strictly doing hair, just focusing on building everything. And then after 2 years working booth rent, I found this building. Lauren knew she'd need money for rent, chairs, a shampoo bowl, and other startup costs. Winging it might work for eyeliner, but not for entrepreneurship. Lauren needed a business plan. A business plan is a written document with your company's goals, strategy, and a potential timeline for getting there. Growing your business or taking it in a new direction is risky. A solid business plan helps you measure your progress, remind yourself what your customers expect, and make wise decisions when you need to adapt. Starting with the business plan, I know I had $15,000 to work with. So, I sat down and I wrote all the costs of every necessity that I needed, the chairs, the station, the mirror, the shampoo bowl, and then of course supplies inside of the salon, the paint for the floors and the paint for the walls, every little item piece by piece, so I didn't go over budget. And if you're a young entrepreneur like Lauren, you can get started with budgeting by watching our cash course episode, different ways to budget. It covers six proven ways to keep track of the cash you spend. something you'll definitely need if you're hustling to turn your dreams into a thriving business. When a great location popped up online, Lauren was ready. But she couldn't open her doors just yet. She had the vision. A salon offering visitors an exclusive, relaxing experience. To get the look and atmosphere just right, she had to renovate. When I first got the keys to the building, it was empty. We had to paint the walls. I mean, we did everything from top to bottom. Everything in it, we put in here ourselves. We replaced the ceiling tiles. We painted the floors. We hung everything up and just decorated it to be my style and my personality, exactly how I wanted it. >> By opening day, the salon looked great. But Lauren quickly realized that when you're a business owner, there is no letting your hair down. When a pipe burst in the bathroom, her dream was almost washed away. About a month after I opened, one of my pipes had burst in the bathroom. So that flooded the whole place. So, I had a contractor come in and fix everything and help clean it up, but that's just one of the expenses that I had to save room for in my budget. >> When something breaks, the buck stops with her. Repairs, products, even her outdoor sign. Everything her salon uses costs money. It's enough to make anyone want to pull their hair out. >> So, I took the cost of product and my time and I wrote it all down on paper and I just kind of went through everything. What do I want to make an hour? How much is my product going to cost per service? How long is this going to take me? So, if I want to make X amount in three hours of work, how much do I need to charge that price at and start? And if I need more product, I have to add that in there. And just writing it all down and going over it a few times to make sure it's going to go flawlessly. Lawrence stays on track with something called a P&L sheet. P&L stands for profit and loss. A P&L sheet records how much money you're making versus how much money you're spending on time, products, or operating costs. Like a business plan, P&L sheets can help you measure progress and decide what products or services to prioritize or trim. So, an example is a service I offered, eyebrow waxing. I was spending a lot of money keeping new wax and keeping the pot going, but I just wasn't getting very much business in eyebrow waxing. So, I cut that from my service list just to save myself the money and the time. Lauren checks her P&L sheet every month to see what's working. Knowing what she's earning and losing with every haircut helps her make smart decisions about her time and pricing to incorporate my flexible pricing in with my services in my business. I like to add on the luxury services that only cost me my time. If you're looking to cut through the noise and make good financial decisions like Lauren, check out our cash course episodes on that topic. Manage your financial hygiene and accounting basics 101. From covering your budget bases to tracking profits and spending, cash makes financial literacy a breeze. Now, it's time to jump in myself and see why Lauren's business is a cut above the rest. So, we're at the shampoo bowl. What are we doing here now? So, we have Sam here today. We are going to wash, tone, and then style her hair. >> Okay, awesome. Let's get right into it. [Music] Lauren is a master. And her customers don't just come in for a new look. They come for the luxury service. A luxury service is an exclusive treatment with touches and enhancements that make customers feel special. When they come in here, they get their service done. They get to relax and be treated like a princess for a day. Sometimes I'll even toss in a free deep condition mask, but I like to do it more as a treat to let my clients know that I care about them. I care about their hair. I style it just how they want it to be, and I make it look perfect. And I want them to walk out feeling good about themselves and feeling like fresh, like a new person. Because luxury services come with a premium cost, customers of Main Attraction expect Lauren to deliver at the highest levels. If she does, then they'll come back again and tell their friends how great it was. >> In this business, social media reviews and word of mouth is very important to help me grow and keep me here. While regular clients are a valuable revenue stream, Lauren's got another one up her sleeve. She rents out the salon's two extra chairs to other stylists for $140 a week. That's almost $1,200 a month of recurring revenue. stable, predictable money that comes whether she's working or not. And for the hair stylist she rents to, the chance to grow their clientele and do business in a stylish salon is a bargain. You can learn more about renting assets and how that compares to owning them with our cash course episode, renting versus owning. So, I do sub lease the other two chairs. They pay me a weekly amount and they're able to have full access to the building so they can run their own businesses. >> And so, that's a part of your business strategy. Yes, it's a big part of my business strategy. It helps me maintain the building and it's part of my business as a whole. Slow week, split ends, no problem. With recurring revenue, Lauren's not just relying on her appointments. She's also saving for her long-term plan of expanding to a bigger salon. One that will let her bring in more customers, offer more luxury services, and develop an even stronger brand. I think once I in the future have a bigger salon, that's my goal, then I would be hiring employees to work at. >> Okay, good. That's probably a 10-year plan. >> So, what did we learn from Lauren today? To stay on track, follow a business plan. Don't just hope your idea will work. Plan, set a budget, and make sure you have enough money for startup expenses before you open your doors. Measure your progress by checking that plan and watching your profit and loss sheet. Keeping track of what brings in money and what costs too much can tell you what to cut and what to focus on. If you're providing customers a luxury service like Lauren, remember that they expect more. Satisfying them again and again can grow your business and provide you with recurring revenue. What's some advice that you would have for other like-minded young entrepreneurs like yourself? >> Take the jump. It's hard and it's scary, but you do have to just take the jump and put yourself out there to starting whatever business you want to start. With a glowing reputation, Lauren's ready for what's next. Hair today, gone tomorrow? No way. I can't wait to see what Main Attraction does next. Thank you so much, Lauren, for telling us all about Main Attraction Salon. I can't wait to come back and get hired in a year. >> You'll be here. >> Okay, good. And thank you at home for watching this episode of The Hustle. Make sure you like, comment, and subscribe so that you never miss an episode. And if you're a young entrepreneur who wants to come on the hustle, let us know and I'll be interviewing you next. That's a cut. Thank you so much for watching this episode of The Hustle. To make sure you never miss an episode, subscribe at prageru.com. And for a deeper dive into business, economics, and financial literacy, check out our show Cash Course at prayeryouukids.com.