Financial Adviser: 5 Business Lessons Everyone Can Learn from 'Brazilian Wax King' Paolo Hilario, Co-Founder and CEO of Lay Bare
Lay Bare has emerged as a true trailblazer in the beauty and grooming industry, transforming the landscape of affordable waxing services in the Philippines.
Conceived by siblings Fiona, Paolo, and Monique Hilario, Lay Bare was born out of the necessity to address the challenges Fiona encountered while searching for reliable hair removal solutions at traditional salons.
The Hilario siblings identified a gap in the market for quality hair removal services after one of them experienced dissatisfaction with existing options. They recognized the opportunity to disrupt the industry by specializing in hair removal and good customer service. This strategic shift became the core of their business concept.
In 2006, the Hilario siblings opened the first Lay Bare outlet on the ground floor of their Makati condominium. However, the business struggled to gain traction, primarily due to a lack of awareness about the specialized services they were offering.
Instead of becoming discouraged by the losses from their first outlet, the resilient Hilario siblings chose to expand and opened another outlet in Quezon City to promote the benefits of their services.
It took almost two years of intensive marketing before their efforts began to pay off. As the company became profitable, the siblings decided to scale the business through franchising.
Today, Lay Bare boasts over 160 outlets nationwide and continues to expand its influence. Leading this expansion is Paolo Hilario, who took charge of Lay Bare and guided it to unprecedented success.
Under his leadership, Lay Bare has successfully carved a niche in the market, attracting a predominantly female clientele, with 95 percent of its customers being women. Their flagship service, the Brazilian Wax, has become synonymous with the Lay Bare brand.
While Fiona and Monique have retired from the business, Paolo continues to steer Lay Bare towards new horizons. The brand's legacy is deeply rooted in its adaptability, innovation, and ability to meet evolving market demands.
How did the Hilario siblings overcome the early challenges of Lay Bare and become a dominant player in the highly competitive beauty and grooming market? What lessons can aspiring entrepreneurs learn from the Hilario siblings' entrepreneurial journey with Lay Bare?
Here are the five business lessons every entrepreneur can learn from Paolo Hilario, co-founder and CEO of Lay Bare:
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1| Know how to identify customer pain points and turn them into business opportunities
Identifying pain points can serve as a source of inspiration for innovation. Businesses that actively seek solutions to customer challenges may discover new and innovative ways to improve their products or services that will allow them to stay ahead of industry trends.
The Hilario siblings transformed pain points into opportunities by addressing a shared personal problem. One of Paolo’s sisters, Fiona, encountered challenges finding salons that provided satisfactory unwanted hair removal services. Although she found a salon that solved her problem, Fiona was dissatisfied with the overall customer experience. This inspired her to establish a salon that could specialize in delivering high-quality hair removal services. Despite the siblings' limited business experience, Paolo and Fiona joined forces to turn their business concept into a reality.
Through innovative thinking, a focus on service quality, and a keen understanding of market demands, the Hilario siblings successfully turned challenges into opportunities, establishing a business that has thrived for 17 years and counting.
“The business has been in existence for 17 years now,” Paolo Hilario says. “It was founded by myself and two of my sisters. The three of us started it to address a very personal problem we wanted to solve. One of my sisters was particularly focused on unwanted hair removal at that time. The idea came from our observation that what was available in the market didn't specifically cater to the type of expertise she was looking for.
“Si Fiona was into hair removal. Maraming syang tinry. She went to a parlor that offered a very similar technique and service and it solved her problem, pero the problem was, the place was unhygienic, madaming tao, it was sort of congested and the service that the parlor was selling hindi naka-focus dun sa experience.
“So she said, you know, what if we just focus on the quality of the service and position ourselves as experts? We could attract a lot of people who limit themselves and settle for something like this. So basically, that's how we wanted to disrupt the market at that time when we started.
“Si Fiona, wala talaga syang business experience. Ako naman kasi mahilig akong mag-sideline, so parati akong may side hustle. When she floated the idea to me, ‘What do you think about this idea,’ I told her there's nothing that I know about salon operations and hair removal in general, but let's take a look at what you're seeing.
“So I went to the salon with her, talked to the owner, because at that time, even the owner was saying, ‘Ang laki ng demand dito, but we don't have the capacity to scale.’ We could teach you some of the technology and send it to you and then maybe you want to do your own.’ So that was the opportunity and we were able to execute it.
“This was in 2006, and at that time, eto pa lang yung start ng product decision on services. Back then, to put our first salon, it cost about P200,000 and we all contributed P70,000 bucks each. We set up our salon sa Cash & Carry malapit. We couldn't afford a mall location. In fact, the malls weren't interested in us. So, we put up the salon in the area where my sister used to live, called Paladan Makati. She was staying in a rented condo unit, and the studio underneath had small commercial spaces. That's how we targeted the first location.
“We were close as siblings, so we wanted to involve each other. My other sister, Monique, was also seeking a way to augment her income. When Fiona and I explored and thought, ‘Okay, I think there's a possibility this could be successful,’ we invited her to come on board and be part of the process.”
2| Know how to develop customers into loyal brand advocates
Fostering brand advocacy is not just about acquiring customers; it's about creating a community of passionate supporters who contribute to the growth, credibility, and success of your brand.
Brand advocates serve as organic promoters, spreading positive word-of-mouth about your product or service. This kind of recommendation is often more trusted and influential than traditional advertising.
Positive recommendations and testimonials from brand advocates can lead to increased sales. Potential customers are more likely to convert when influenced by authentic endorsements.
Paolo emphasized that their business was founded on expertise. By highlighting their knowledge and skills in hair removal, they aimed to position themselves as industry experts, instilling confidence in potential customers.
By understanding the importance of reaching a broader audience, Paolo ensured that the entry point to their services was affordable. He also wanted customers not only to be satisfied with the result but to enjoy the entire process. This focus on customer experience laid the foundation for building brand advocates.
Recognizing the need for a more strategic approach due to limited resources, Paolo opted for a localized strategy. He understood the value of turning customers into loyal patrons.
By creating loyalty retention and referral programs, he incentivized existing customers to keep coming back and to bring in new customers. This approach not only retained customers but also turned them into advocates.
“So ang problem namin, because it was sort of a novel idea, unlike today when hair removal is part of people's lifestyle, back then we had to introduce the idea of hair removal and highlight its benefits,” he says. “We had to create awareness and communicate the value we were bringing to the market and, at the same time, trying to identify those who already had some knowledge in hair removal and find ways to reach out and communicate with them. This is the time before social media, so medyo mas challenging sya.
“In the first year and a half, we were in the red. We were losing money because we weren't serving enough customers. Pero, for the customers we were able to serve, maganda yung feedback namin. So ang tanong namin was how do we identify and target specific people who are interested in us so we could survive and break even, right?
“The strategy back then was that we created our own press briefing kit, and then my sister, Fiona, kinatok yung mga periodicals to publish us. When that information came out, we aimed to communicate three things to the market.
“First, that we're experts at what we do. We wanted to make sure that we could get trials. Second, we wanted to differentiate the technique we offered. Back then, hair removal was priced at a premium, and many of the products we used were imported from abroad. We formulated our own thing here. We wanted to make sure that the entry point for people to access our services is very affordable. It's cost-effective. Thirdly, we wanted to create and promote the idea that if you come here, you will have a complete customer experience from end to end. It's not just about the end result; we are very conscious of how we create experiences for our customers to enjoy.
“So, little by little, we were able to serve customers. Pero sabi namin ang hirap i-target yung customer because we have limited scale and capacity to reach out to them. How do we now make ourselves known? Our location sa Palanan, Makati was not the epicenter of commercial exchanges, so, we said we have to be more present so that people are more aware; that's one.
“Two is we have to make our customers into loyal patrons who keep coming back and advocates for the brand. This means we have to create a platform for them to partner with us as franchisees and, at the same time, we needed to establish a strong loyalty retention and referral program that allow them to invite their own network to try our services.
“When it started sa Makati, we were serving people from Quezon City and from the South as far as Laguna, yung mga ganun and so ang sabi namin we have to create a more strategic approach.
“Because we lacked the equity or funds and the capital to create a mass media marketing campaign, the only way we can do this is make sure that the clients we served could propagate the value we offered. So ang lalim ng groundwork nun.
“We were heavy on marketing to establish our presence. We would be sponsoring pageants, competitions, art shows, or any other means to encourage people to try our services because at that time it was really about who we were and what we had to offer.
“We wanted to make sure that people understood this. Once we got them through our doors, we aimed to make, kumbaga, a clear value proposition on why they should come back and how they could get more value from coming back by inviting more people within their network to try our services?
“I would say, on the sixth month, kahit na lugi pa kami, we opted to open our second branch already in Quezon City because we knew that we wouldn't get traction with one location. Kasi alam namin na what we were trying to do was to create a movement.”
3| Know how to scale your business through customer-focused strategies
Franchising allows a business to expand its footprint rapidly without the need for significant capital investment. By partnering with franchisees, your brand can establish a presence in diverse geographic locations, reaching a broader and more diverse market.
Franchising provides an effective strategy for penetrating new markets. Local franchisees have a better understanding of the specific needs and preferences of their communities, contributing to successful market entry.
Franchising offers a scalable model for growth. Instead of relying solely on internal resources, franchising enables a business to leverage the entrepreneurial spirit and investment of franchise partners, accelerating the overall expansion process.
Understanding the value of focusing on engaged and loyal customers, Paolo leveraged their commitment to the brand. The decision to franchise exclusively to existing customers became a fundamental aspect of their model, ensuring that those who believed in the brand were integral to its expansion.
One pivotal moment was when a loyal customer expressed a strong interest in franchising the business. This customer-turned-franchisee became an advocate for the brand, not only believing in the concept but also achieving remarkable success in promoting the brand in a specific region.
Instead of viewing franchising solely as a money-making venture, Paolo approached it as a safer route for expansion. Franchising provided a means to overcome capital limitations while tapping into the potential of a wider market.
“The problem was not with the service, kasi maganda yung feedback namin, but the products. Konti lang yung nagta-try so sabi namin we have to bite the bullet and increase our presence. The question was, are we going to invest in advertising with only one location that might be inaccessible for people? Or do we invest that money in operating more stores and expand our presence?
“At the end of the day, even if we attracted more people through our doors, having only a few services would still impose a limitation on our ability to scale.
“We talked about how do we scale, kasi, at that point, wala kaming access to capital, pero we had customers who wanted to do this business and saw the opportunity. It was a natural progression for us to franchise it out.
“Interestingly, one of our first loyal patrons wanted to franchise the business. On our second year, may franchise na kami so that helped our financial position. Dahil may concept na kami, we always believed that it could happen.
“Our first franchisee, who was initially a customer, wanted to join, but we couldn’t sell the idea without experiencing a profit, pero gusto nya talaga actually noong first year pa, and you know the beauty about it is she was a firm believer of what we were doing. She became an advocate. She was very successful in promoting our brand in the South that she even performed better than us.
“So dun namin nakita yung value in focusing on your customers. At the end of the day, when you serve different types of customers, those who are really engaged with your brand are the ones you need to leverage. Kasi nasip nga namin na, if we don't partner with them, we might end up having others who would compete against us. So we wanted to make sure that we leverage on other people's strengths and that's what we did.
“Not only that, we also learned from her experience that we would franchise only to our customers. That has been our model. During the first two to six years, we were really focusing on franchising.
“When we did the franchising, it was not really about making money, but it was a safer route for us because, you know, we had limitations on capital, but more than that, we saw the opportunity to reach a wider market because a lot of our provincial franchisees namin dumadayo pa yun para lang magpa-service.
“So that means that there was demand. They would advocate na, ‘O ang daming puedeng expand-an dito,’ so we did not want to miss that opportunity because we wanted to be the household brand that stands for personal care in the Philippines. We had to grab that opportunity, not let it pass by.
4| Know how to craft a compelling value proposition
In a crowded market, a well-defined value proposition sets your product apart. It highlights what makes your offering unique and why it's the preferred choice for consumers. A strong value proposition communicates the unique benefits and advantages of your product, making it more appealing compared to competitors.
When potential customers understand the value they will receive, they are more likely to convert. A clear and compelling value proposition can contribute to higher conversion rates, turning interested prospects into actual customers.
Paolo explained the value proposition of their services by highlighting several key benefits of hair removal. He positioned Lay Bare as the go-to place for hair removal, eyebrow shaping, and Brazilian Wax.
Lay Bare’s success lies in its ability to refine not only its service but also its product. Paolo innovated their Brazilian Wax service by introducing the patch technique. This method involves removing hair section by section, minimizing irritation and discomfort.
“By emphasizing these aspects, Paolo effectively communicates the multifaceted value proposition of Lay Bare's hair removal services, addressing hygiene, aesthetics, relationships, skin protection, specialization, innovation, and comprehensive care.
“I'll tell you about the benefits of hair removal. It's more hygienic in the sense that it traps odor. I mean, it's a natural protection, but since may advancement na yung modern society where you can wash yourself, hair doesn't really play a big part in protecting yourself.
“Your hair keeps you warm. It's supposed to protect you from germs, but when you do that, it also attracts odor. So some people would want to cleanse themselves differently and manage the odor side of it, so that’s one side.
“Second is for aesthetic. You know, some people don't like to look hairy. We're not judging people who do, but for those who don't, we are the place to go for them and then madaming intrinsic benefits, like a lot of partners, say they like having hairless.
“Our hair removal service not only involves removing the hair, but we also protect the skin after the hair removal. Parang baby ka na, wala ka nang buhok kasi ang smooth na ng skin mo.
“Our biggest service is the underarm hair removal kasi basic yun, then eyebrow and Brazilian Wax. Yung sa eyebrow is shape lang. Puedeng kortehan. Puedeng linisin.
“Yung Brazilian Wax, that’s where we are known for. Nauso kasi sa Brazil yun eh. Dyan kami nakilala talaga. We are the authority in Brazilian Wax. We serve a lot of Brazilian Wax, like thousands and thousands per month.
“We were already doing Brazilian when we started. Hindi naman namin naisip yun na magiging top service pero ngyaon marami na talaga because it wasn’t as popular as before. Alam mo kasi syempre naman private yun, so medyo may reluctance, pero because we've been able to build our brand as a pillar for professional standardized services, mas relaxed yung mga tao to do it with us.
“The beauty of what we've achieved over the years lies in our ability to refine not only our service but also our product kasi we developed our own product and the natural concoction of the wax we use. The technique goes hand in hand with how the wax is formulated. That’s why that technology or technique is locked into what we do.
“When we do Brazillian Wax, we apply the patch technique, so normally ang gumagawa nun hot wax—you spread the wax and get something to remove the wax with. What sets us apart is that we have our own wax concoction where the hair adheres, but what we do is we do it section by section.
“So hindi yan one forceful motion and action yun, that's why there is less irritation and discomfort. What we do is we apply a patch technique na per small area sya tinatanggal. Fifteen minutes tapos yun.
“We also innovated our Brazilian Wax service. You may be surprised that we can also remove the hair from the buttocks. Dati kasi harap lang. Kailangan malinis yung buong area so dapat pati yung likod sinasama natin sa Brazilian. Sa bikini hindi kasama yun harap lang. Sa Brazilian yung buong area malinis yung mga ganun.”
5| Know how to drive strategic leadership and lead with vision
Leaders with a strategic mindset make informed decisions that align with the overarching vision. This ensures that short-term decisions contribute to long-term success, avoiding actions that may compromise the organization's future.
Organizations that are led strategically and guided by a strong vision often gain a competitive advantage. They are better positioned to identify and capitalize on market trends, outperform competitors, and sustain success over the long term.
Paolo articulated a mission-driven approach for Lay Bare, seeking to transform the beauty industry in the Philippines. This involved setting long-term goals, establishing a clear vision and purpose, and developing strategies for market penetration and innovation.
Paolo's strategic leadership and vision for Lay Bare involved a deep understanding of the customer base, a commitment to professionalizing the industry, an innovative business model focused on value and accessibility, and a mission-driven approach to transform the beauty industry in the Philippines.
Lay Bare's business model focused on accessibility and value. Paolo emphasized the importance of serving more customers at affordable prices, thereby increasing margins with incremental sales. This strategic approach set Lay Bare apart from salons that wait for customers to come and allowed the company to attract a larger customer base.
“My mindset is that the true role of Lay Bare is to empower people by unlocking their confidence,” he says. “For us, it's all about the customer experience. Now, what creates a perfect customer experience for females is not something I can answer.
“Our organization is about 95 percent female. Konti lang yung lalaki sa buong organization. That’s why many ideas come from the target market because we're female-driven as well.
“I wouldn't claim to be the foremost expert in what females want, but I believe in genuine customer service and building customer relationships, so parang feeling ko that I understand the nuances of the type of experiences they particularly want to adhere to. We have people who recognize this for us, and they are females.
“We believe in developing personal care in the Philippines. Ang nakikita ko is that we are rich in skill but poor in providing quality opportunities. Our goal is to professionalize the industry by offering quality jobs for qualified people and creating our own academy that enriches people's skills. Our aim is to create more personal care experiences.
“Alam mo kasi itong beauty and wellness dito sa Pilipinas, to a certain extent, it’s seen as blue collar work. It’s not treated as a skilled craft here. May tendency yung mga tao not to treat it very professionally, like they’re coming to work or not. Lilipat-lipat sila sa iba-ibang salon na walang loyalty to that craft. We wanted to change that mindset of people. We want to really professionalize.
“That's why sa Lay Bare, pag pumasok ka dito, there's a ranking that allows you to promote yourself based on performance because we believe it's a profession. It's an art that we should promote, and so yung people problem na yun, systemic yan and endemic, so we wanted to change that by creating our own professional academy.
“Madami ding naghahanap ng trabaho and gusto nila medyo formal and professional, so we wanted to make sure we cater to that. On the other side, there is access to market because what we're trying to offer is, unang-una our competitive advantage. One of our competitive advantages, apart from accessibility, is value. We don't price ourselves too high. Our whole model revolves around how to get more customers.
“Kasi if you look at the business, maliit lang variable cost mo, marami kang sunk cost. This means that with an incremental increase in sales, mas lalaki ang margins mo. So, our model talaga is about serving more to make more, not serving less and aiming for higher margins. That’s the whole concept.
“We focus on volume because we want to make sure we keep our prices low and that's the challenge. We are not like many salons that are just waiting for people to come. We want to develop a relationship where our clients trust us as their personal care partner throughout their lifetime journey. We feel that personal care is a necessity, and there's a need for it. Ang problema is fragmented sya, and scattered so you can get the service here and there, whereas, in fact, you can organize how you want to do your personal care and unlock more value in doing so. That's what we're going to provide.
“I feel like yung beauty industry in the Philippines needs to be transformed by understanding their journey, what they want to achieve, and how we could adopt a more mission-driven approach in what we do here.
“This involves creating our own long-term goals, a clear vision and purpose for what we want to accomplish, kumbaga, at the core of what we do. I think from there we can develop clear strategies for which markets to penetrate, what to develop and how to spur innovation.”
Henry Ong, RFP, is an entrepreneur, financial planning advocate and business advisor. Email Henry for business advice hong@financialadviser.ph or follow him on Twitter @henryong888
