Financial Adviser: 5 Business Lessons Everyone Can Learn from the Founder of David's Salon
David Charlton comes from a family of hairdressers in Sunderland, England. His grandfather used to work as a barber while his mother and uncle were hairdressers.
At a very young age, Charlton grew up in the hair salon business of his family where he would assist in entertaining customers by serving cups of coffee or helping clean up the floor.
When he was 22 years old, Charlton applied for a hairdressing job in Hong Kong where he would be eventually assigned by his employer in their Manila branch to manage an upscale salon called Rever, which was located inside the Mandarin Oriental Hotel in Makati.
Under his employment contract, Charlton was supposed to work for only two years but because Rever did so well—even becoming one of the top premium salons in the country at the time—he was always asked by his employer to extend his contract by another year.
Charlton’s employer kept increasing his salary package to keep him from leaving every year until he ended up buying out the salon in the early 1980s.
In 1989, when Charlton was busy expanding Rever, he was offered a space to put up a salon at the New Farmers Plaza in Cubao, Quezon City.
Realizing that Rever was a premium salon that caters mostly to high-end clients, Charlton came up with a new hair salon brand concept that offers premium service at affordable pricing, which he would later call David’s Salon.
Today, 33 years after the first branch, David’s Salon is the largest hair salon chain in the Philippines with over 230 outlets nationwide.
How did Charlton succeed in the hairdressing salon business? Here are the five business lessons every entrepreneur can learn from David Charlton, founder of David’s Salon:
1| Grow by capitalizing on your talent and expertise
One way to expand a business without too much cash outlay is by entering into an industrial partnership wherein one person provides the capital, while the other provides his skill and time as his investment in the company.
“It took two to three years before we expanded and that was because some people came and said, ‘Can you help us with our salon?’” says Charlton. “I helped them turn around their salon and they brought me in as industrial partner. Once I became a partner, we changed the name of their salon to David’s Salon.
“After that we started to expand because more and more people kept coming and asking me to help their salon. I saw and learned how to put together a structure so that if you want to do business with me, this is what you have to do. Then people started accepting my terms. That was how we grew quickly in the very beginning.”
2| Grow by training and professionalizing the team
Every hair salon wants to have the best hairstylists and employees. Providing regular staff training does not only mean higher employee retention but it also attracts talents from the industry. Investing in staff training leads to higher profitability over the long-term, as well as better customer service and productivity improvements.
“A lot of hairdressers are artistically very good but technically, they need to train to be good,” Charlton says. “You might be cutting a straight line or doing beautiful make-up, making nice petals and things like that with hairstyles, but to actually do color or a perm properly, there's a technical side to it.
“That’s what we improve on, we took the artistic side of the people and nourished that and then gave them the additional technical skills to be able to do a whole range of hairdressing that was needed to make the salon successful.”
3| Grow by generating repeatable business
Customer retention is about making good relationships. It is an important business strategy that keeps customers from switching to the competitor at the first sign of disappointment. Keeping regular customers protects your profits as well as your market position.
“In reality, all over the world, no matter how good you are as a hairdresser, there is always somebody who is never going to like you,” he says. “This is why I tell our staff to always aim for at least 60 percent to 70 percent retention because out of 10 people, there are likely four types of persons who are just not going to like you.
“One person is not going to like the color of your eyes, your hair, the way you talk, your skin, your clothes. Another person is perhaps just a tourist so they are never going to come back no matter how good you are because they don’t live here.
“And then the third one is somebody who doesn’t like your receptionist or they don’t like the color of the place. The fourth person is not going to come back because they just don’t like the service.
“No matter how good you are you can’t please everybody. After those four persons, it’s up to you to make sure to keep the next six people as regulars.”
4| Grow by creating memorable customer experience
Making a positive customer experience can help differentiate a business from its competitors. A superior service that exceeds customers’ expectation can increase customer satisfaction and potential referrals.
“We find that we have a lot of customer loyalty to the extent where we have three generations of the same family that come to our salon to get a haircut together,” Charlton says. “There was a lady there in our salon who used to be my client 20 years ago. I used to actually fix her hair but now she is already a grandmother. She still comes to my salon with her daughter and a 12-year-old granddaughter as well. There are a lot of people who are very loyal and we do appreciate that.”
5| Grow by keeping up with trends and techniques
For a hair salon business to be successful, one must find ways to stay relevant in the market. Staying updated is one competitive advantage that a business can have over its competitors.
“In general we are a lot better,” Charlton says. “I think we push fashion as well. So if you want a fashionable hairstyle or haircut and color then you come to us. We have a lot of overseas hairdressers who come at least two to three times a year to do seminars and workshops for our staff.
“We also do a lot of traveling. We usually travel at least three to four trips a year to watch competitions abroad or sometimes our own staff wins the local competition here and then go to participate abroad.”
Henry Ong, RFP, is an entrepreneur, financial planning advocate and business advisor. Email Henry for business advice [email protected] or follow him on Twitter @henryong888