How 2 entrepreneurs turned a boring tax reform into a formidable opportunity
Ilan and Sébastien, co-founders of FlexyBeauty
“Don’t be obsessed with starting your own company, find your obsession and get obsessed with it.” This quote, popularized by star entrepreneur and renowned “shark” Mark Cuban, is on a white canvas in Ilan Koskas and Sébastien Beaujard’s offices. It has defined the founders of FlexyBeauty’s approach to entrepreneurship, and the passion that has arisen from their daily work.
The cofounders met in middle school and have remained friends ever since. Before FlexyBeauty, Ilan has had a career in sales while Sébastien was in software development. Combined, you could say they were inadvertently following the footsteps of Mark Cuban.
The other canvas in Ilan’s office is one of his wife, Yael, in the beauty salon she started in 2011. In order to maximize revenues and manage the salon efficiently, the couple set up a website, used a reservation system, licensed a cash register solution, and outsourced a online webstore. While it worked and Yael’s salon was a success, the combination of all these tools could be nightmarish at times. A lot of time was wasted on processes that could be automated they thought.
A study done indicated that many of the 87,000 hairdressers and 44,000 beauty & nail bars in France are stuck in the 90’s, don’t accept credit cards, only take reservations over the phone, or in person, and have no way to proactively incentivize their clients to come back to their shops. A few of the solutions that exist also charge exorbitant prices, killing the salons’ margins. As a result, in 2017, 59% of salons had no software/POS, and only 5% used a SaaS solution.
Together Ilan and Sébastien started drafting the blueprints of a software, specifically catered to beauty salons. First, they built an alpha, then a beta of the service. It was a multi-device SaaS that allowed all salons to offer online reservations and match them with in-store reservations. It was also a CRM to better target clients. Finally, it was a way for stores to better track their finances, and charge clients in cash or credit cards. It was an all-in-solution for salons, hairdressers, and spas!
When both decided it was time, they quit their jobs. Armed with €50,000 of personal savings, they officially started FlexyBeauty. The vision was to create an affordable (quick ROI) and easy to use product for salons.
The beta was released by Sébastien’s team, and the sales machine led by Ilan quickly hit the ground running. Indeed, the roles were divided such as one was the CEO (and Sales Expert by training), while the other one was the CTO (and Senior Dev by training). Their hard labor helped achieve significant milestones within the first few months of operations. Within two years, they had reached 2,000 recurring subscribers.
New options, tools, & add-ons, were progressively implemented in the FlexyBeauty solution, and the salons never churned. FlexyBeauty became a foundation brick in the structuring of each salon it onboarded. It also became a partner for many, especially for the ones subscribed to the Prestige package (see levels below). Finally, true to the promises the entrepreneurs had made to themselves, the solution remains relatively affordable, from €29/month for the most basic, to €99/month for the whole nine yards.
In 2017, the company, growing at a decent rate, decided to get into third gear, and open their capital for the first time. They quickly found their Jill in the name of Newfund Capital. The VC led an injection of €1.5 million of fresh capital into FlexyBeauty. On the financial, accounting, legal, and operational levels, the VC fund actively helps the company pursue its structuring as a viable Series A candidate.
Certified Cash Registers
A few years back, the french government started working on anti-fraud measures for retailers. Indeed, it was common practice for a few to cancel all cash transactions at the end of each workday and exclude it from revenues. As a result, only card transactions were declared and therefore VAT and Taxes were minimized.
Since January 1st, 2018, all retailers must use a Point of Sale certified by the French government. The latter registers every single transaction, allows for cancellations of transactions under certain conditions, and sends the data to the national tax agency. While not all businesses in France use digital POS, they are now required to find one, and invest in it. Failure to comply come with a €7,500 for every two months non-compliant.
FlexyBeauty, in its mission to help salons financially, now has the opportunity to continue onboarding more salons and help them be compliant with french tax laws. It is this fulfilling mission of accompanying their clients to better themselves that has driven the entrepreneurs. In turn, the clients don’t see the word fee when paying their subscription but rather a normal due for all the structuring FlexyBeauty has brought them.
Optimization and efficiency
At the same time, the company has allowed many salons to anonymously collect more useful information about their clients’ patterns, and their habits (all the while respecting CNIL — french privacy agency — requirements). Salons are able to open at the right hours, staff their shops more efficiently, buy the optimum stock to sell to end-consumers. Finally, they are also busier, and have become sexier for millenials.
On the other end, FlexyBeauty is making life easier for thousands of salesmen willing to enter salons across France. Instead of going door-to-door, they have a new digital way to access the thousands of salons subscribing to the FlexyBeauty platform. The salespersons are also able to get live data on how their products are selling at the city, regional, or national levels.
To summarize, with FlexyBeauty, salons are reminded to order when stocks are low. Brands can prospect online. And finally, FlexyBeauty can send anonymized data to brands to let them know where certain formulas are popular, who is buying them, and how much they are paying for the products. FlexyBeauty is putting the data back into the hands of the salons owners for the benefits of the entire ecosystem.
In a little bit less than three years, the two entrepreneurs have convinced 3,000 salons to subscribe to their service, in an industry that seemed fairly reluctant to change. They have built a platform that many business owners now depend on for their financial health and performance. We are proud to work with FlexyBeauty in their development and that they are now the leading cloud-based SaaS for salons in France.
They have broken norms and changed conventions. They are now armed with the tools for a European rollout. We will continue to accompany them in this endeavor and look forward to the see the progress in the country they have started to expand.
Check out FlexyBeauty on https://www.flexybeauty.com
Thank you to Augustin Sayer, Ilan Koskas, and Sébastien Beaujard for helping me pen this short story.
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