Today’s interview is with an entrepreneur who proves that owning and running a 7-figure business is not just a pipe dream, but a doable goal no matter where you’re starting from.
When Chelle Neff opened her first salon, Urban Betty, she was an independent stylist using her own money to keep both the salon and her household afloat. Despite the struggles she faced, she did not let them phase her. She continued to work hard on client acquisition and refining her business model, eventually being able to take on employees and securing some important loans to grow her business. Even though the business ran into some rocky years, her salon’s homely feel and her continued determination to make Urban Betty into unforgettable salon experience for her customers caught the loyalty of a strong online and in-person following.
Now Urban Betty has evolved into a thriving franchise and lifestyle brand, with salons throughout Texas, more than 80 employees, and an annual revenue of over $6 million. Her story is truly a testament to what you can achieve with firm resolve, a quality product, and a willingness to adapt and grow regardless of what you run into.
Allow me to introduce Chelle Neff…
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Hello, I’m Chelle Neff, the founder of Urban Betty, a salon that opened in 2005. In 2017, I successfully grew Urban Betty’s revenue and profit to a level that allowed me to retire from hairstyling and focus solely on the business. Nearly 18 years since our inception, we proudly operate two salon locations with over 80 employees. Urban Betty has achieved remarkable growth, earning a spot on Inc. 5000’s list of the fastest-growing privately held companies for four consecutive years. Thanks to this sustained success, in 2021, Urban Betty launched its own product line, and we are excited to announce the opening of our third salon location in 2023.
I embarked on my journey as an entrepreneur after beginning my career as an employee in the salon industry. My passion for hairstyling started at a young age, and when I was sixteen, I had the opportunity to enroll in Cosmetology school at my high school. Throughout my junior and senior years from 1993 to 1995, I balanced regular classes with Cosmetology school, spending half my day at each.
In 1995, I earned my Cosmetology license and began my career behind the chair at Supercuts. Over time, I gradually moved up to work in higher-end salons. I secured a small suite at the Gallery of Salons five years later and became an independent contractor. This marked the initial step toward running my own business.
I was alone for the first week when I opened Urban Betty Salon. I had just one hairstylist/contractor on board for the first three months. It wasn’t until six months after opening that I hired my first employee. During that period, my income from my own hairstyling covered the salon’s expenses and my household, making it a highly stressful situation. It became evident that having employees was more profitable than relying on booth rental or contracted hairstylists. Over the course of about six years, I gradually phased out all the hairstylists working as contractors and transitioned to a 100% commission-based salon.
We used Monica Gellar’s apartment from the show Friends as our inspiration to help give it that “homey” vibe. Our walls are painted with bright colors, and we have several walls covered in wallpaper with gold accents and flowers to create a vintage feel. Each station has a different mirror, giving our salon personality and flair.
The atmosphere at Urban Betty aims to make every client feel “at home.” Most salons are very modern and industrial, and we strived to do the opposite of that. Providing a plush couch with pillows and lots of colors gives the illusion of walking into your living room when you enter the salon. We also set up a cute coffee bar with a TV that further adds to that cozy home feel.
In 2002, I launched urbanbetty.com as a platform to showcase my work. The name ‘Betty’ was derived from my first name, Betty Michelle, which I received in honor of my grandmother. This planted the seed for what would become Urban Betty, a full-service brick-and-mortar salon in 2005. Due to the challenges of securing a traditional bank loan, I explored alternative funding options. The initial financing for the salon buildout and equipment came from a $70,000 loan from a local non-profit organization and family members, all of which were later repaid with interest.
After six years, the salon had grown to employ over ten people, and we ran out of space. I sought assistance as our company faced various challenges, such as pricing list structuring and cash flow management. In 2014, we enlisted the help of the Summit Salon Program and a business coach, which proved instrumental in restructuring our team and pricing list.
Initially, when I structured the pricing list for our salon services, I offered package deals and various special discounts, believing it was the best way to attract new business. However, we encountered financial difficulties and realized we were giving away an astonishing $50,000 in discounts in just one year. With the guidance of my Summit business coach, we restructured our service pricing to an à la carte menu with only a limited number of discounts. The result was a 30% growth in revenue the following year. This success allowed me to retire from hairstyling in 2016 and focus exclusively on managing Urban Betty.
I’ve observed the ever-evolving landscape of our industry, marked by changes in social media, technology, and the increasing desire among stylists for greater freedom. To stay ahead, I consistently adapt by staying current with trends and proactively educating myself on new technology and social media platforms as soon as I become aware of them. I seize every opportunity to learn and participate in networking events that focus on the future of our industry.
I believe the upcoming generation has grown up with technology, which will significantly influence the consultation and service they provide in the beauty industry. As a salon, we recognize the need to integrate technology into every station to facilitate interactions between stylists and their guests.
Our Instagram platform is our most valuable marketing tool, boasting over 50,000 followers. It has become a vibrant community where current guests, fellow hairstylists, other salons, and potential customers come together to learn, share, and engage. Just as most people review portfolios or resumes before hiring someone for a job, our guests also like to see the work of our hairstylists before choosing their next one. We use our Instagram page to showcase our stylists’ work, providing insights into their expertise while offering hair inspiration to our Instagram community. Beyond promoting our stylists and salons, we use the platform to announce events, sales and convey our brand to our audience. Therefore, our Instagram’s success directly impacts the success of our business.
We allocate approximately 2% of our annual gross income to invest in Yelp, Google, and Facebook Ads. This investment allows us to incorporate videos, categorize our photos on Yelp, and ensure our salon appears at the top of salon search results. Additionally, our internal company policy dictates that we respond to any negative review within 24 hours to promptly address and resolve the issue. Our approach involves expressing gratitude to the guest, reiterating their concern, and asking for input on resolving the problem. We also provide the direct email of the manager or founder for the reviewer to contact. This strategy demonstrates our company’s compassionate and transparent approach, which leaves a positive impression on future guests reading reviews.
While five-star reviews are undoubtedly valuable, we’ve also learned to leverage less-than-great reviews to our advantage. Surprisingly, this tactic has even converted Yelp and Google prospects into new clients for Urban Betty!
Fierce Conversations” by Susan Scott is a book that has had a transformative impact on my business. When I initially started, every employee would come to me with every question they had, and it quickly became overwhelming. During my attendance at the Fierce Conversations workshop in New York, I discovered an effective system to address this issue – the Decision Tree.
The Decision Tree classifies decisions into four categories:
1. Leaf Decisions: These are decisions where you make the call, take action, and do not need to report the action you took.
2. Branch Decisions: In this category, you decide, take action, and then report your action.
3. Trunk Decisions: You make the decision but discuss it with me before taking action.
4. Root Decisions: These decisions are made jointly, with input from multiple individuals. They are crucial decisions, and poorly made or implemented ones could potentially harm the organization.
We have since incorporated The Decision Tree into our new employee orientation process, assigning each decision-making level to a different person within our management team.
Things are going exceptionally well as we stand on the brink of opening our third location and welcoming new shareholders into our business. In the short term, my goal is to diligently document and upload all our salon systems and processes within the next year. This effort will help us create a comprehensive blueprint for our business.
Looking ahead to my 5-year plan, I envision having a total of four locations, with two in Austin, one in Round Rock, and another in San Antonio. Our annual gross revenue target is $10 million, and we anticipate having a team of over 150 employees. To achieve this ambitious goal, I am committed to expanding my knowledge in the areas of shareholder management and franchising.
In addition, I have aspirations to further develop the Urban Betty product line in the coming years. This involves seeking an Urban Betty product investor and hiring an Urban Betty product developer/chemist to bring fresh ideas and innovations to our product offerings.
Our mission statement at Urban Betty is clear: ‘Here at Urban Betty, we empower each other to grow. We remain connected with each other and our guests while constantly evolving.’ This statement underscores our commitment to continual improvement and the inclusion of others on our journey. We embrace change, encourage growth, and foster innovation, which keeps our salon company at the forefront of our industry.
Don’t be afraid to take the reins and step into your own power. I hesitated to take on a leadership role when I opened my salon. At just 27 years old, the idea of instructing others was intimidating. My solution at the time was to hire only contractors who paid weekly rent for their salon chairs and essentially ran their own businesses within my establishment. However, even when people are operating their own ventures within your business, they still need structure and a cohesive culture that can only be established by the owner. Eventually, I transitioned my salon to an all-commission model, allowing me to confidently lead and shape the desired culture.
www.urbanbetty.com
https://www.facebook.com/urbanbettysalon
@urbanbettysalon on Instagram
@urbanbettysalon on Twitter
chelleneff@urbanbetty.com
https://www.linkedin.com/in/urbanbetty/
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