Value Added: Wash, rinse, ka-ching! Repeat.


Stacy Dabney Ramirez, left, and Lindsey Dabney Cabrera are sisters who own a hair salon that grosses $2.5 million a year. (Astrid Riecken/For The Washington Post)
Reporter

This started off as a Mother’s Day column on two working moms who happen to be sisters who own a Bethesda salon. But it took a sharp turn once I met Stacy Dabney Ramirez and got a sense of her fanatical attention to detail.

You notice it as soon as you step off the elevator at Bella Bethesda. There’s a pampered feeling about the place, with high-end tea bags from Tea Forte and the fancy Keurig coffee machine that dispenses Nantucket medium roast. Frozen fruit will keep your ice water cold in the summer. There’s the granite counter top at the front desk. There are Q-tips and hand lotion in the spotless restroom. There’s even reading glasses you can borrow to peruse the latest Vogue while you get your scalp massaged.

Thomas Heath is a local business reporter and columnist, writing about entrepreneurs and various companies big and small in the Washington Metropolitan area. Previously, he wrote about the business of sports for The Post’s sports section for most of a decade. View Archive

“Presentation is your first impression,” said Stacy, the mother of a 3-year-old and a 5-month-old. “I care about how the sugar is put in the jar. I care about what the bathrooms look like. I care about how things are placed on the shelves. I try to remember people’s names when they come in.”

That last one is no easy task; her business logged 24,000 appointments last year.

When I stopped at her Bella Bethesda salon last week, Stacy was politely and firmly instructing the three staffers assembled at the front counter — just like she did when she was teaching fourth-graders.

“I have done well in the salon industry because as a teacher, you have to manage people,” she said. “In a salon, the students are my employees and the clients are like the parents.”

She guided me on a tour of her 3,000-square-foot second-floor shop overlooking downtown Bethesda. She escorted me around the 16 hair stations, showed me her color-coded computerized log listing 147 appointments that day, introduced me to her hairstylist sister, Lindsey Dabney Cabrera, then bid me adieu with a firm handshake.

It seems to be working.

The six-year-old salon just about broke even in 2012 with gross revenue of $2.4 million — $2.1 million of which came from hair styling and the rest from sales of products such as conditioners, gels and shampoos. Bella Bethesda is on track for $2.6 million this year.

“We want to do $3 million,” said Ramirez, 37. Rent eats about $13,000 a month. There are 28 employees, not including Ramirez, with a payroll that reaches $55,000 every two weeks.

The cost of a haircut averages $60, though the average receipt is $93 because of extra services such as coloring or highlighting.

Ramirez spends about 11 percent of revenue on apprentices, assistants and managers, which she says is double the industry standard, because she wants a high level of service.

“When asked why clients choose a certain salon, the top reasons have nothing to do with their haircut,” Ramirez said. “It is 90 percent customer service and 10 percent technical. So we are invested in the customer service, although I don’t overlook the technical.”

When you call the salon, for example, the receptionists have a personalized greeting in which they identify themselves by name.

The result is a 51 percent retention rate after the first customer visit, she said. That number gradually declines for repeated visits as customers move away or switch to a competitor.

I don’t have much hair to cut, but I spend about $85 a month, tips included, at a downtown D.C. salon because it’s close, the receptionist answers the phone fast, it accommodates me on short notice, I receive prompt, polite service. Of course, I like the haircut, too.

I have always wondered about the economics of hair salons, and Stacy filled me in on her place: the hairstylist and salon split the revenue from each haircut 50-50. They can run from $16 for a child’s haircut to $700 for a five-hour, Japanese “straightening” session.

A stylist with a good clientele can earn $100,000 to $120,000, including tips, in a good year.

Assistants who help manage the salon are paid by the hour. Ramirez paid herself about $60,000 last year, while her sister Lindsey earned about $110,000 styling hair. The company has no debt, so if the sisters can increase revenue, they might be able to start taking some serious profit.

Like all smart business owners, one of the sisters is on the premises nearly every day. Ramirez, who lives in Howard County, works remotely from home Tuesdays and Thursdays so she can be with her children. She is at the salon the rest of the week, including Saturdays, as well as two Sundays a month. If that’s not enough, she also helps her husband manage a successful summer day camp called Outrageous Occasions.

The sisters grew up in Montgomery County in a family of six children. Lindsey pursued a cosmetology career. Stacy graduated from a small college in Ohio in 1999 and became a fourth-grade teacher.

She eventually worked in Montgomery County schools, where she became frustrated earning a fraction of what her sister was making as a hairstylist.

A local salon owner who knew Lindsey suggested they start a salon together. Lindsey’s clientele and reputation would bring in the clients. Stacy would handle the business side.

Ramirez said the vast majority of salons lose money. About 15 percent break even and only 5 percent are profitable. She was determined to be in the 5 percent.

She wanted to create a customer-oriented culture with good service, a clean shop and communication with the clients. Where possible, she would train their hair stylists organically, starting them as shampooists and then, with Lindsey’s help, turning them into stylists who bought into the customer-is-first concept.

“Most hair stylists think they can own their own business,” Ramirez said. “But many stylists need help on the business side. That’s why Lindsey and I make a great team. Her strength is hair. My strength is managing and customer service. I have tried to create that culture.”

To appeal to the widest audience, Bella Bethesda decided to be open every day, all day and hire stylists at different points in their career, so that the salon could accommodate many budgets.

The sisters also became promoters. They grabbed a blender, stood on the corner outside and gave ice coffee away to passersby, urging them to take the elevator to the second floor and try them out. The sisters joined the Bethesda/Chevy Chase Chamber of Commerce and various network groups. They talked to everyone they could, trying to get their story out. They spent $10,000 from savings to build a Web site.

They built their business, brick by brick. Ramirez would spend hours with her staff, keeping track of their clients, advising them on tricks of the trade such as sending handwritten thank-you notes, tossing in a $5 Starbucks gift card.

Ramirez knew they were on the right track one Saturday when the place was so crowded that she had to grab chairs from the break room to accommodate guests waiting for their appointment.

The sisters eventually bought out their investor and now own the salon outright. The only stumble so far was an embarrassing $30,000 tax bill, which resulted when the accountant who handled their payroll taxes died suddenly.

Ramirez said Bella Bethesda is one of the top-grossing hair salons in the country. About 80 percent of the customers are women.

Formal occasions like weddings, proms and graduations bring in a lot of business. To keep the business sharp, she and Lindsey invested $3,000 in a four-day conference in Tampa on the salon business.

“Finding time to do everything is the hardest part,” said Ramirez, who gets up at 6:30 every day. Her head hits the pillow at 11:30 p.m.

Before she had children, “I didn’t understand why everybody didn’t work as hard as me.”

Now she gets it.

For previous columns, go to washingtonpost.com/business.

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