242 - Transforming Spaces: How Salon Suites Are Changing the Beauty Industry Landscape with Allure Salon Suite Consulting' Karen Kaminski

Welcome to Listening with Leaders. I'm Doug Noll, lawyer turned peacemaker. I teach executive leaders how to listen to emotions rather than words so that they can become the leaders everyone wants to follow. And I teach those same leaders how to be authentically present, available, and connected to their families despite being insanely busy. I have learned that we are 98% emotional and only 2% rational. Learning how to listen to emotions is, in my experience, the foundational skill of life. Stick around to the end of the show, and I'll reveal how you can be on our next guest in 15 to 20 minutes. So let's get started. Karen Kaminski, welcome to Listening with Leaders. You are the CEO and owner of a company called— and I got to look at my notes to get this right— Allure Salon Suite Consulting, and you're based in Pennsylvania. And as I understand it, you basically help people, you do a lot of things and we're gonna talk about that. But foundationally what you're doing is helping people who want to have a day spa, helping them get their business started, teaching them how to do it. And in addition, you work with investors who are interested in perhaps buying properties and remodeling and designing them into day spas that they can then lease out to operators and making come out with— do I have that right? Pretty much.

So Allure Salon Suite Consulting is the consulting part. And then Allure Salon Group is my personal company. That's where I help the individuals set up their own businesses in the beauty industry. So whether it's hairstylist or skincare, and we mentor them through our Allure Salon Group. And again, it just turned into a consulting business. So Hence the Allure Salon Suite Consulting.

There you go. Give us a little bit about your backstory. How did you get into this business?

So like many people, I love the beauty industry. And my dad was like, you're not going to beauty school. There's no way. You're— you need to go to college. You need to get a degree, and then you can go back because it was a trade. And that's how the beauty industry was looked at when I was growing up and then the people before. So I went to school, went to Marywood, graduated with an advertising degree in fine arts and was always that artsy type of person. Worked for a sign company, then got married, had my children, but I still wanted to do the beauty industry. So I thought, oh, I'll go back and get my nail tech license and have a nail salon. Did that. Realized very quickly, as much as I like doing nails and the service part, I like the business aspect more. So I was presented with the opportunity from my OPI rep at the time. Her name was Renee. She's like, hey, would you ever decide, you know, would you ever go on the road to do sales? And I was like, what is it? There's a distributor down in Philadelphia. They're looking for a sales rep up here. I'm like, okay. I said, I'm open to options at the time. I met with this guy. He had no hair and he hands me a box and these little bottles and there was oil. And he goes, I want you to try this in your hair. And I was like, wait a second, you want me to put oil in my hair? And he's like, yeah, it's this new stuff. You're going to love it. And he showed up with 12 boxes of 144 little bottles and probably a 6-inch stack of salons in my territory. And I was like, wait a second, I need to try this first. And the product was Moroccan Oil. And I tried it and I loved it and I still use it today. Now it's a global brand. It has oils, shampoos, body creams, you name it. And That's how I started on the road. I used to drop off little samples to all these people, and by the time I got back to them, like in my 2-week rotation, they loved it. And then I moved on to Cosmoprof. Linda Fellows hired me. She is probably my best employer. She actually— she hired me twice. That's how awesome we got along. She hired me for Cosmoprof, and that's how I started my Cosmoprof. And I had like where I live, the Northeast, territory. And then afterwards, Linda had left and there was a position open at East Coast Beauty Supply. And I ended up— she rehired me, and then I expanded my territory all the way up to Hoboken and Jersey City. So that's how I, that's how I became a sales rep. But how I became a consultant, that's a totally different story. What had happened was Salon Suites weren't in Pennsylvania or New Jersey. And when I started with Cosmoprof, Next thing, one of the franchise brands opened up 2 locations in Pittsburgh. And when you're a sales rep, we're like, oh my God, this is going to be like earth-shattering, devastating, because Salon Suite people don't really buy from sales reps. The next thing you know, they open 2 more locations. And at the time I was like, I am never going to retire as a sales rep if this takes hold in PA. So I thought, okay, I need a place to do educational classes. So I thought, I'll do a Laura Salon Group and professional education, and I'll bring in people to do classes and techniques and business and help these individuals set up their businesses. Because as a sales rep, I would have people waiting at my car going, I want to be an owner. And I was like, no, you don't. I said, because 100% now has to keep the door open. And they would want to leave for a variety of reasons, whether it was just a toxic environment or they just couldn't grow anymore. And so that's where I thought the business part. So I opened Allure Salon Group and Professional Education Center. And what I learned really quick was it was one thing for them to set up their business with the paperwork, but they didn't know how to run a business. And again, beauty professionals, they go to beauty school to learn how to pass state boards and they go into salons to learn technique and how to be employees. But really never got that business skill. So when I opened my first location, next thing I know, people were reaching out to me going, how did you do this? And how did you figure out the plumbing and the electrical? And then next thing I was a consultant helping people set up their spaces. So I went from oil to hair color to now I'm a GC. Like, I'm pretty much operate as the COO of our company. But yeah, so that's The short version.

You've got a general contractor's license?

I don't. As the owner, I don't need one.

Okay, interesting.

Here in Pennsylvania, but in Pennsylvania, you don't even— there's no licensing. You just have to register with the Attorney General's office. But as the owner, I run my own projects and hire my subs and show up on site. Wow.

So you're doing, you're helping people who, people in the beauty business who have been employees become their own operators and they hire you to do, to find space, design it, build it out, that sort of thing.

Allure Salon Group takes over commercial properties and then I go in and subdivide them into mini salons. And then those beauty professionals come in and rent space from us and we help them We become a business incubator for people where we help them set up their business, maintain what they come in with, and grow what they have into a bigger, a bigger business.

So it's quite— it's a different model than the typical salon where a beauty technician might rent a space or rent a chair or something. Here they actually have their own space. Correct. And they're really— it's literally their own business.

Correct. They're renting space and we help them as much or as little as they want. So like they get a key to the front door, they get a key to their studio. They could personalize their space and providing the business. Like, they have the technique. We never really have to teach some techniques, although we will have people come in. But it's the business part. We truly realized that they had no clue.

I don't know what a profit and loss statement is or a financial statement.

No. When I brought on a partner— exactly. I brought on a partner about 2 years ago. He was a consulting client of mine in Southern California. His name was David, and he came out of the finance and private equity world. And he was leading the team in his former position to buy Salon Suite. So he knew the ins and outs of the business part of it, but he didn't know the boots on the ground part of it like I did. So we found locations for him, and then over working with him, our skill set was very synergistic, and he had skill sets I didn't have, and I had skill sets he didn't have. So we ended up partnering. And I remember him saying to me, he was like, Karen, how do they do business? And because he was asking me, what does the Professional Education Center— I said, I help them set up their businesses. And he goes, Karen, what do they use for their bookkeeping? He goes, QuickBooks or something. And I go, no. I said, they open up their bank app and they see what their balance is. And he's, no, you're kidding me. And I was like, no, I'm totally serious. And He's— we've over the last couple, probably over the last year, really dove in. And now we've created this whole kind of blueprint and a systemized curriculum to show people basic business skills. So instead of having like a beauty business, they have a business that does beauty services. And it's really been a game changer. And we have people who stay for years with us.

And Wow. So this is still a, a, a, a business. It's a growth in process. You're still growing?

Yes. We have 5 locations and we have, we just opened our 5th location about probably about 4 weeks ago. And total, in total, we have about 115, uh, salons, but we have probably 100, um, probably about 75 members right now. So we're still filling when interviewing people.

This is not a franchise model.

No.

Mm-hmm. These are all independent operators. They do it any way they want. Basically, you're providing them the space and the training, and it's up to them to make or break. And once they pay for the, your fees for, and the cost of, well, actually what you're doing is, if I understand it, you'll buy it, you'll find a space, a building, and you'll remodel the whole inside with these individual suites. Then they rent the suites from you and That's what they pay. And then I presume they probably pay for the training too, if they want to take the training.

The training's included with their rent.

Oh, okay. So what a great deal. So it's a kind of one-stop deal. They pay rent, right? And they can run the studio any way they want and they get trained on how to operate a beauty business or a business that provides beauty services. I love the way you phrased that.

Exactly.

Yeah. Wow. So you've been doing this for a while. What is it that gets you up in the morning now and gets you really excited to go to work?

What I love the business, I think having David come on board as my partner, I've been able to transition more so into finding and building them. So like I can go into a property now, I could see, I have a vision of how it works. I could tell you the sewer pitches, I could tell you the electrical demand a space would need. I can look at it just by the square footage and be able to have it in my head what the space would provide and That's how it turned into the consulting part. So I have 3 clients that already are up and running and established. I have 3 clients right now that are under construction. I have 3 or 4 people that are in the real estate portion where we're negotiating the LOIs and the leases. And my latest project of Allure Salon Group, I ended up doing all of the construction GC work myself. So now I act like as their project manager And I make sure that their GCs stay in line and keep— everybody keeps the schedule because time is money.

So are you saying that real estate investors or investors come to you and they hire you as a consultant on how to acquire and then build out and operate these buildings with the spas in them?

100%. A lot of people.

And I'd say they pay you a fee for doing that.

Correct. A lot of people realize that going the franchise route in this model while the heavy lifting is in the front, finding the location, setting up the location and getting it filled. Once they're filled, they roll and operate by themselves. So paying a 10% or 8% royalty back to somebody just to pay rent didn't make sense. So that's how I ended up in this position. And I do the facilities I do. I don't really do the makeshift ones. I do the ones as if they were the franchise models. Luxury. And the benefit is I do the bones and then my clients get to add their personal touch with colors and furniture and fixtures.

Wow. And so it sounds to me like no, no day is the same. Everything varies. Everything's different every day. Exactly. So I can tell you get really excited about that. It's a lot of fun.

I do. I never would I have thought that I would be in the construction field or doing that kind of stuff. But like, I still do the discovery calls for Allure Salon Group. So I'm, I'm vetting the people coming into our spaces so that they're coachable, that they're serious, that they're not just looking for a place to land, and that we don't have any drama because we have— our facilities are professional and everybody in there has the same mindset. But the building aspect of it, honestly, I fell into it because I did have GCs and I learned very quickly that your intentions and somebody else's intentions might not line up and you don't know that until you have learned a very expensive hard lesson. And I've had 3 different GCs take advantage of me and then I was like, never again. Now I walk into the job sites and it was funny because I didn't understand. I'm an organized person and what I saw with these GCs is they would create chaos and confusion and they would try to validate their worth And I was like, why are you doing this? Why don't you have a list on the wall? Why don't you have your dates? Like, how does everybody— and being an organized person and watching this disorganization drove me crazy. And especially on my dime. The 5th project I took over, my business partner was a little nervous. He goes, are you sure you can do it? I said, listen, I can't screw up any worse than these guys did. I said, it's going to cost us less. And believe it or not, It really did. Our— my overall cost was cut significantly. We came in at budget or under. Instead of it costing us $100 and maybe $40, $40, $50, $60 a square foot to build out, I got it in there for $107.50 a square foot. So considerably less. And now it's given me the experience to help my consulting clients because when an HVAC guy comes in and says, oh, it's going to cost $198,000, I'm like, that's not not going to happen. I said, because that's not what you're going to do. So I could speak to a lot of it. I don't look like the typical GC, but I know the nuances now.

What's your dad say now?

So my dad passed away, believe it or not, when he— back in 1998. And we had a huge construction company, but it wasn't construction like this. It was excavating. So we did highways and it was a big family company. And I have to laugh because every time I think about it, I was like, he'd be like, okay, she still went back to beauty school because I always find a way to do it. But if he saw me as a DC, he'd be like, he wouldn't, he would not have, he wouldn't have been surprised because I was always like, if I wanted something, I would find a way to get it. And yeah, so I would be very proud of you. Yes, I would think so.

He'd also be surprised that you followed the family business and became a GC, a general contractor.

How cool is that? Yeah, he was just, he did highways and he did industrial parks and that kind of stuff. And even my oldest son, it was funny. My dad used to pick him up and take him to the job sites and he used to bring the people out to his car if my son was sleeping and put the plans on the, on the hood of the car. He's my grandson's in the car. You have to come out and It was fun. So yeah, full circle.

How cool is that? Good for you. What is it that's unique about you that's made all of this work so well?

One, I saw a vision. My Allure Salon Group was the first private facility in the state of Pennsylvania, and I was like ringing the bells going, hey, listen, this is coming. Like, you guys have to pay attention. And colleagues didn't take me serious. It took me 17 landlords before I got my first studio open in Woolf's Berry, and people didn't pay attention to me. And I was like, no, this is the industry. This is what's coming. They're coming in masses. And what had happened was when COVID hit, all of the franchise models that were setting up in Pennsylvania, when we opened up, the salons were decimated.

Yeah, you couldn't have all these people in a big room.

No. And what was happening is all of these people were— all of these franchise models were setting up space. So they were contacting everybody via Instagram and social media. So when the people did open back up, these big salon owners, multi-tier owners, they opened up to empty salons. And I remember telling the people that I worked for, Kara Collette, huge— I respect her tremendously. She has East Coast Beauty Supply, but then they merged in its ethos. And I said to her, I go, you don't know what's about to happen. I go, sales reps are used to walking into a salon and taking thousands of dollars of orders. In a salon suite, it doesn't work that way because the salon suite, it goes back to the business practices. They don't realize what they don't know, and they don't think they're big enough business to have a, a rep. All of a sudden, your top performers in the salons are now in Salon Suites. The reps didn't wanna work with them because why are you gonna go in there for a $60 order? So it was just this whole thing. I was trying to tell people, nobody listened to me. And now there's probably over 50 locations in PA since.

So there's other people doing Salon Suites like what you're doing?

Correct. Mostly franchise. There might be one or one other private one, and then couple people did one-offs. But what makes us different is we're a business incubator. Like, we have— we don't just say business support, we have a business curriculum. And my background in both being on the road as a sales rep, working with beauty and beauty professionals to set up their business, and then doing my own facilities And watching these contractors and seeing what they were doing and holding them, keeping them on task has made me like the whole roundabout. So I could speak to any portion of the salon suite industry from finding a location to why are my tenants leaving and why do I have to drop my prices to compete?

So I would say that what makes— what's unique about you that's brought you in is You've already mentioned once you're very well organized, but you're also a rapid learner.

Correct.

And you can learn stuff fast and assimilate and integrate in ways that a lot of people can't, which has allowed you to gather a whole bunch of different skill sets that you would never associate with somebody in the beauty business. And you've been able to turn that into a business that sounds like it's quite profitable and growing.

Absolutely. Especially like the salon suite business. Now you look around and you have all of these real estate investors that have commercial properties and they have big chunks of space that might be appealing, might not be appealing to traditional retail spaces, or people are just not doing the brick and mortar. Salon suites could actually go in there. It drives traffic to that property, whether it's somebody like me coming in and setting up shop, or what I've learned too is I've had a couple investors reach out to me saying, hey, listen, I I have 5 properties. I need the business. So what we started to do too is go in, set them up for them. They now become the landlord and their own tenant. They're driving traffic to their facilities and we're managing for them on the level that we do. So now you have a higher price with value-added services that has been a game changer because the franchise model, while it works great, they all partnered up with private equity and private equity's game is 10% growth. So they have to keep adding franchisees and locations. So they're not paying attention to their tenants and keeping them there. So they rotate out very quickly. Like we have like, uh, retention because of the business education and curriculum that we provide.

So obviously if you're a tenant, if you can make your tenants successful as small business people, they're gonna hang around.

And then even after, some people come in for a couple years and they're like, oh, maybe I wanna do my own brick and mortar. And we talk them through it and we say, let us help you because we're not traditional, we're not salon owners, we are landlords. So we want them always to make a forward step, not a backward step. So we'll say, okay, let's see the information. Because of my consulting experience, I could look at leases and say, hey, listen, this is what you're going to do different now and this is how it's going to work. And if you hire an employee, you have to pay their taxes. And a lot of times they don't realize that. A bigger space does not make you more money. A bigger space might cost you more money. And we try to let them, because again, we want them to move forward and not backwards, right?

This show is called Listening with Leaders, and my background as a lawyer turned peacemaker is teaching people how to listen, which sounds odd, but we really are not taught how to listen. And it's a skill that can be learned. And once you know how to listen, you can stop fights and arguments forever. You can calm people down, all kinds of magical things happen. I'm curious, in your business and through your growth as a businesswoman, how important has listening been to your success?

That is an excellent question. You have to listen, and sometimes it's not just listening, it's, it's paying attention to what's going on. What I see in with our tenant when their business is struggling because they're not business people, they don't know how to communicate that they're having a problem. So what they do is they end up complaining. They complain about, to me, what I think is nonsense. Oh, I saw a piece of paper in the hallway or something, and that's an immediate trigger for me. Oh, they're getting ready to leave. And what they do is like teething toddlers, I call it, or they don't know how to express and where's the pain coming from, and they can't self-soothe. Same way a beauty professional and they start to complain until eventually we get the email that says they're leaving and they validate something in the facility for them to leave. And then they end up leaving for a less expensive space and then they end up doing hair out of their house until they like spin out of the industry altogether. And that's probably the most heartbreaking. So it's not just listening, it's listening to their cues. And I've dialed myself in and also my business partner because I was like, oh, this person is going to leave. He's like, what are you talking about? And he's— I said, she said something about the laundry room. And sure enough, 2 weeks later, I'm like, there you go. So it's listening, but seeing the cues that— and trying to head them off.

What— you've got me intrigued now. I teach people how to listen to emotions.

Okay.

Because we're all emotional beings. And when you learn how to ignore words and pay attention to emotions, you see much more. That sounds like what you're doing, although you may not be able to articulate it that way. So when you're saying I'm— you're listening for the cues, these are nonverbal or they're just indicators. What kinds of things are you paying attention to?

So if I've noticed that we have all of these services and things set up for people and they still haven't taken advantage of them, do you know what I mean? Like even the sales process, let's take for instance websites. We provide websites for all of our tenants. Wow. But they have to come to us because we have to get their picture, their profile, their services. Like, we— it takes 7 times even though you're telling them. And it took like me literally physically going to each location, putting a, a thing under the door, not once but 3 times, having our marketing team send out an email. So it's, you know what I mean? It's the constant following up for success because What I've learned is people don't know what they don't know. And then once they see success in somebody else, they, oh, wait a second, I have to get on board.

So that sounds like that when you got a building and you got, say, 6 or 7 different suites.

26.

What? How many?

26 in one.

Oh, wow.

30 in another. Yeah, we're talking. Yeah.

All you need to do is get a small group of those. Owner operators to start seeing success. And that creates a contagion through the building.

We had that with, we had a barber who was in our employee to owner program and he listened to everything we said. A lot of the stuff he was like blown away and he would have that look of that blank look on his face, but he's really taken everything we've done to heart. And now when you look at him, he has his website, he has his Google business page. He's ranked number one when you look at Trexler Town Barbers.

Wow.

He went from making $500 to doubling his income already. And it's stuff that he's just, oh my God, I never would've gotten this. I would've just gotten the keys in a room and I would've had my license and I would've struggled.

One of the things you're learning, what you've learned to do is to pay attention to the unspoken. What's not being said? How are people behaving? Are they paying attention? And you've seen enough now. That you, you can predict what's gonna happen. Is this person gonna be successful or not? You can tell. This person's gonna be here for 3 or 4 months or a year. This person's a long-termer. They're doing great. They're gonna make a lot of money.

Correct. And I see it too, even with my consulting clients, like when they approach me, I go through a vetting process. It's funny because in both businesses, people think that we're— they're interviewing us. To— and that we're trying to make the sale. What they don't realize is I'm interviewing them to see if we're going to bring them in. And that goes for even my consulting clients. Like, I don't take everybody that calls me because it's a long process and I've been able to cultivate this great group. And yeah, you have to look for the clues with the beauty pros. And when I see somebody like— I'll ask my girls all the time, like on our team, hey, did so-and-so reach back out to you? Because when I walk in, I'll say hello to everybody. And I'll be like, hey, did you get your website up? Or, hey, you didn't. And what we realized is CJ then went and told, because everybody saw like a constant line at CJ's door. They started asking CJ, wait, what are you doing? Why do you have so many clients? And he's, oh, I have my website and they all give me Google reviews and like all my new customers come from Google. And then it was funny because next thing you know, the girls were going, we have 6 requests for websites. So They're like, so it must be CJ. And I said, of course it's CJ, because these girls see success. But again, it goes back to that teething toddler. They don't know what to ask and they don't know how to diagnose their business to be successful because nobody's ever given them basic business skills. And that's what differentiates me because I truly want to see people succeed. You know what I mean? There's nothing worse, especially when I was a Cosmoprof rep, when I would help set somebody up and 18 months, 2 years later, they had to close the door and now they had a 3-year lease that they had to pay themselves out of. They had a loan on the furniture. They did. It was truly heartbreaking.

So good for you. One more question. I'll let you go. Sure. What's one thing, Karen, about yourself that we would never know about unless you revealed it to us?

I love horses. I love— so it's great. So my son married this wonderful girl. Her name is Lizzie and who's expecting in October. So I'm going to be a grandma. So I'm excited. She is a champion jumper.

Wow.

Yeah. So when she was in high school and college and I remember when I was little, I would try to convince my dad of getting a horse and he's, we don't have enough property for a horse. I'm like, Dad, I had it all set up. I'm like, you could put the barn because I had ducks, I had geese, I had rabbits, I had every animal possible, parakeets, a dog and a cat, like everything. And I would try to convince him and it just never worked out. And then my son marries this girl who does this and I keep sending both of them videos of Equestrian Farms and we need an arena. And I go, I'll fund it. I go, but you guys, and she's, I'll take care of all the horses. Horses. She will board them. She goes, we got mini horses. So yeah, so I love horses.

How cool is that? So are you getting into the family business of having an equestrian center?

I am pushing my son towards that because that's Lizzie. Lizzie loves that. So I'm hoping at some point we would— they would have the house, the barn, the equestrian, because that's like her goal and my son's goal that we keep pushing them into. Even this morning I sent him videos of mini goats. I was like, oh my God, we could add this to the farm too.

Good for you. That sounds like a lot of fun and a great family project.

Yes, definitely.

Karen, it's been so pleasant talking with you today. Thank you so much for your time. I know everybody listening really appreciates all of your wisdom and insight too. Best of luck to you.

Thank you so much. It's been a pleasure.

Doug Noll here. Thank you so much. For listening to Listening with Leaders. If you are a successful executive leader who would like to be on this program, please visit podcast.dougnull.com/podcast. If you got something out of this interview, would you please share this episode on social media? Just do a quick screenshot with your phone and text it to a friend or post it on the socials. If you know someone that you think that would be a great guest, tag them on the social media to let them know about the show and include the hashtag #ListeningWithLeaders. I love seeing your posts and guest suggestions. We are regularly putting out new episodes and content. To make sure you don't miss any episodes, go ahead and subscribe. Your thumbs up, ratings, and reviews go a long way to help promote the show and mean a lot to me and my team. Want to know more? Go to my website, DougNoll.com. Or follow me on LinkedIn, Facebook, and Instagram. That's @DouglasEnoll. Thanks for listening, and we'll see you on the next show.