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Chelle Neff of Urban Betty: Five Things You Need To Be A Highly Effective Leader During Turbulent Times

An Interview With Fotis Georgiadis

As part of our series about the “Five Things, You Need To Be A Highly Effective Leader During Turbulent Times,” we had the pleasure of interviewing Chelle Neff.

Chelle Neff has been a leader in the U.S. salon industry since founding Urban Betty in 2005 and has more than 20 years of experience creating innovative practices in the salon and beauty worlds. Neff has successfully grown Urban Betty’s revenue year after year and today has two salon companies that house more than 70 employees. For four years consecutively, Inc. 5000 named Urban Betty as one of the fastest-growing privately held companies.

Due to its continued success, the salon is expanding and opening a third location in 2022 and launching an Urban Betty product line in the fall of 2021.

Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?

I began my journey as an entrepreneur by first being an employee in the salon industry. I knew from a young age that I wanted to do hair. At the age of sixteen, I was offered the chance to enroll in Cosmetology school at my high school. During my junior and senior years of high school (1993–1995), I attended half days of regular classes and half days of Cosmetology school.

When I received my license in 1995, I started working behind the chair at Supercuts. I slowly worked my way up the ladder to higher-end salons. I got a small suite at the Gallery of Salons and was an independent contractor five years later. That was my initial stepping stone to running my own business.

I was all by myself for the first week when I opened Urban Betty Salon and had only one hairstylist/contractor for the first 3 months. I didn’t hire my first employee until 6 months after opening. At that point, everything that I did behind the chair paid for the entire salon and my household. It was a very stressful situation. I figured out after having one employee that it was much more profitable to have employees rather than booth rental/contracted hairstylists. After about six years, I slowly phased out all of my hairstylists that were contractors and transitioned to a 100% commission-based salon.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘takeaways’ you learned from that?

In 2002, I launched a website with a terrible logo. At the time, I thought my logo looked good. It was a lady with a city background, and she seemed very cartoonish. Think Sex and the City if it were a children’s book. Not good. We reworked it after a couple of years. I recently found an old scrapbook with my first brochure and the original logo. I showed it to my employees, and they couldn’t believe how bad it was. We all had a good laugh! I learned that you should constantly be re-evaluating your brand and evolving to stay current.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

I wouldn’t be where I’m at today without my life coach/therapist, Rebecca Hamm. I met with her once a week for the first five years after I opened my business. I am down to every other week now. When you are an entrepreneur, you frequently need someone in your corner who can call you on your B.S. in a gentle way. She does that for me. She has helped me overcome my ego and become a boss in every sense of the word.

Extensive research suggests that “purpose-driven businesses” are more successful in many areas. When your company started, what was its vision, what was its purpose?

My purpose and vision were to elevate the salon industry. In a world that considers college as the only option for success, my salon company empowers women and gives each person that works here the ability to become a future shareholder and grow to have an income well over 100k without a college degree. At Urban Betty, we pay our employees well above the industry average WITH BENEFITS (¼ of the stylists make six figures in my salon, where the industry average is $22k).

I have brought on two current employees to be shareholders in our salon company — encouraging entrepreneurship and helping women achieve their dreams of owning a business. I’ve also created a plan for more employees to become future shareholders in 2022. We host personal growth retreats for our employees and have developed an innovative system of mentorship. We want to shatter the glass ceiling and elevate our industry.

Thank you for all that. Let’s now turn to the main focus of our discussion. Can you share with our readers a story from your own experience about how you lead your team during uncertain or difficult times?

Our biggest obstacle was overcoming the pandemic. In 2020 the pandemic affected the salon industry significantly. Urban Betty had to close for two whole months while many salons had to close permanently. We chose to stay strong during the pandemic and keep our industry positive through Zoom calls (and even a Zoom Happy Hour P.J. party) and connection. I joined a weekly mastermind with other salon owners so that we could all uplift each other. I also updated our Social Media with inspiring updates about our salon reopening and safety protocol. I wanted to ensure that our staff/guests received the message that 1. “We care about you.” and 2. “We want you to feel safe.”

Did you ever consider giving up? Where did you get the motivation to continue through your challenges? What sustains your drive?

Yes, I considered giving up multiple times. There were days when it was hard to get out of bed, and my business checking account was consistently in the red. The bank used to call me several times a week to make sure that I had money coming in to pay for all the expenses coming out. When I first opened Urban Betty, my leadership ability was weak, and my budget skills were even more inadequate. I was behind the chair 90 percent of the time, and I delegated everything that I could to my manager. I had one admin day a week for bookkeeping and one on ones. I wanted to be liked by my guests and staff, and it was hard to step into my power.

There were times I questioned why I was even doing this. I could be in a studio somewhere making more money with way less stress. The drive to keep going came from a desire to do better than where I came from. I grew up extremely poor, and I never wanted to struggle again. Not having a safety net or an option to fail propelled me to keep going; I never had those things when starting my salon company. I decided never to become a victim of hardships that I couldn’t control and instead became a leader to defy the odds.

What would you say is the most critical role of a leader during challenging times?

The most critical role of a leader is to remain alight for others around them. When you get overly emotional and become a fear-based leader, all those around you can sense it. I’m not saying be a robot, but I’m also not saying to freak out in front of everyone. Save your freakouts for therapy. That’s what works for me. Anyone who owns a company needs someone (preferably a professional) on their side to help them with anxiety and stress. I see a therapist twice a month. Employees will not feel safe if I’m not outwardly showing that I can handle pressure and challenging situations. You have to do the work yourself and be vulnerable around others. Your mind is like a gym. If you just work out (or go to therapy) when you don’t feel like you are in great shape, you’ll never get into great shape. You have to consistently do the work and be willing to share it with others.

When the future seems so uncertain, what is the best way to boost morale? What can a leader do to inspire, motivate and engage their team?

Much like what I said above, remain calm, connected, and engaged. If you checkout or freak out, that’s precisely what you will get back from your staff. When we closed for 2 months, I typed out weekly updates (and even recorded a couple of videos) with where we were as a company and what we were doing to keep our guests informed. I posted those updates and videos on our private Facebook Group page so that my staff could still feel connected to us and everything that we were doing behind the scenes. I also knew that some of the team were struggling financially. I created an online Employee Relief Tip Jar. We sent out several emails and posted on social media how guests could help supplement our staff’s income during the shutdown. We raised just over $6k for all of our team. Those small acts helped keep the culture strong and the morale intact.

What is the best way to communicate difficult news to one’s team and customers?

Digital media was a massive vessel for us to communicate difficult news. We posted Instagram Stories and posts stating how we were navigating the pandemic. We also highlighted a story on our page with all of our Covid-19 protocols and news about reopening. We also sent out bi-monthly emails to all of our guests about handling the pandemic as a company and what we were doing to survive. The most important part of this process was to remain honest, vulnerable, and optimistic all at the same time.

How can a leader make plans when the future is so unpredictable?

I love the saying: “How do you make God laugh? Tell him your plans.” I think of that often. The piece of advice I would give any leader is to keep going no matter what. Make those plans. Don’t fret over when or where things will happen. If you want to manifest something, you have to set a goal and get very specific. You also have to give up control and know that when and how it will happen can look very different than what you envision. I spent 6 years with a positive cash flow and had 3 months of fixed expenses saved. I never knew what for until the pandemic hit. What took me 6 years to save up was pretty much gone in 2 months of having to be closed. If I hadn’t taken my business coach’s advice and found a way to become profitable and save that money, we may not be open today. So my advice is pretty much the standard, have a savings account, have systems and structures in place, know what 3 months of your fixed expenses look like, and put that in an account you can’t touch.

Is there a “number one principle” that can help guide a company through the ups and downs of turbulent times?

Keep your cool. Stay calm and focused on solutions, not the problem. When the pandemic was just starting, and we learned we couldn’t have more than 10 people at a time inside our store, the first instinct was to panic. Instead, I immediately looked at how many staff we could have, how many guests we could have, and what we would need to cut. Instead of worrying and shutting down, I went into solution mode. Within one hour, we had a strategy, and a plan announced it to our staff and instantly felt better. If you can’t find a solution inside yourself, ask for help! It’s always there.

Can you share 3 or 4 of the most common mistakes you have seen other businesses make during difficult times? What should one keep in mind to avoid that?

The 3 most common mistakes I see are out there are:

  1. Blaming the guest. When you shame others online about being late, no-showing, or being sick, it tells future guests that they are not safe to be themselves inside your company. Things happen, and how you react to them in the moment says everything about you, not the other person. Keep your emotions in check and be professional.
  2. Acting like nothing is wrong. While I say, keep your cool, I’m not advocating for a person to ignore any issues that come up. If you stick your head in the sand and don’t say anything to your staff or guests, they will come up with their own story about what is going on, and it’s not always going to be great. And again, they won’t feel safe if they don’t think you know what is going on. It’s better to say XYZ is happening, and I’m working on a solution because I don’t have all the answers yet, instead of ghosting and pretending everything is fantastic.
  3. Borrowing money you don’t have at a high interest rate. When things are failing, and you have to use credit cards or high-interest lines of credit to stay afloat, it’s time to reassess your budget and systems. I know this because I was that person for a long time. It can only sustain your issues temporarily and cause you undue stress. I call that the slow business death. Get ahead of your financial problems by learning how to profit and have at least 3 months of fixed costs in savings.

Generating new business, increasing your profits, or at least maintaining your financial stability can be challenging during good times, even more so during turbulent times. Can you share some of the strategies you use to keep forging ahead and not lose growth traction during a difficult economy?

I utilized the following strategies to keep forging ahead during a difficult economy. First, I reached out to my most trusted advisors, my therapist, my salon consultant, and my business coach (yes, I have 3 different people). I listened to podcasts, and I launched the Profit First method. Through all of that research, I broke down all my fixed and variable costs to run Urban Betty (both locations). A fixed cost cannot change and is always there, no matter if we close or stay open. A variable cost fluctuates depending on how busy we are and how much stuff we have on hand. Through that research, I learned we had several unnecessary subscriptions that we could cut to save money while we were shut down.

Another new concept we adopted from the restaurant industry implementing a service charge. We figured out a way for everyone to win and our stylists to make more money, jump levels faster, and have higher retail sales. Urban Betty added a small service charge ($5-$25) to each guest upon checkout. We pay our Service Providers up to 20% of that charge based on their current retail to service percentages. This new protocol helps cover our sanitation processes, PPE, group health insurance, and retirement plans.

In June of 2020, we had our highest grossing month ever. We thrived by spacing Service Providers at every other chair, creating split shifts, and opening up seven days a week, 13 hours a day. Our salon manager reworked our entire schedule to give most Service Providers 30+ hours per week. They agreed to work whatever schedule we gave them during the pandemic to utilize time and productivity for the entire salon company, and it WORKED!

Here is the primary question of our discussion. Based on your experience and success, what are the five most important things a business leader should do to lead effectively during uncertain and turbulent times? Please share a story or an example for each.

  1. Ask for help from your trusted advisors. Never weather the storm alone. When the pandemic hit, I immediately called my therapist for business help and emotional support. If you don’t get yourself in check first, nothing else is going to work. On a Tuesday, we found out that we could only have 10 people in each location at a time, I put my problem-solving hat on, and we have made it work. When we first moved into our larger salon, we only had 5 people, so I focused on that last journey and how we overcame it. I chose solutions and hope at that moment, and without a call to my therapist, I wouldn’t have been able to do that.
  2. Know how to read a P&L. If you don’t learn what your expenses and your income look like, you won’t be able to properly adjust your budget for a temporary shutdown or setback. I use Quickbooks online, and it took me a while to figure out how to run reports. And even after running them, that doesn’t always mean you know how to read them. I know it sounds simple, but so many people out there don’t know how to do this. When I first started working with Quickbooks, I wanted to pull my hair out. But then I figured out you can literally learn how to do everything on there with YouTube tutorials.
  3. Be transparent with your staff. Let them see the numbers and know what your income, expenses, and budget are. If you’re embarrassed about making too much money or not enough, you’ve got some emotional work to do. People want honesty, and in turbulent times you have to give them that. After the first week of limiting our staff during the pandemic, I typed up a whole update with our fixed income and actual profit so that they would know where we were at financially and feel secure that the salon would be okay.
  4. Be available. We instilled the message that our door, or, in this case (phone/computer), is always open if you have any questions. I let them know that while I may not have answers, I will always listen. This method helped us stay strong and kept our staff engaged and our culture intact.
  5. When help is offered, take it! Don’t let your ego run the show. I am so thankful for PPP loans, friendly advice, masterminds, books, and podcasts. I have so many outlets that help keep me sane. 99% of the time, someone out there has gone through the same thing or something close, and they can give you advice. It’s up to you if you want to take it. I thought 6 years of business savings would float me for a while. After a 2 month shutdown, it was pretty much gone. That was a rude awakening. If I hadn’t applied for a PPP loan, it would have been terrifying. I’m thankful for that help every day!

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

My favorite quote is, “How do you eat an elephant? One bite at a time.” I heard this quote right after opening my salon company, and I was utterly overwhelmed with everything that I needed to do. I believe that all movement is forward movement. Even the most minor thing like having coffee with another business owner — asking them one question may help you get to where you want to go.

How can our readers further follow your work?

Thank you so much for sharing these important insights. We wish you continued success and good health!

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In-depth Interviews with Authorities in Business, Pop Culture, Wellness, Social Impact, and Tech. We use interviews to draw out stories that are both empowering and actionable.

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