Re-Define What "Success" Means To You

Hello, my friend. Welcome back to The Modern Hairstylist podcast. This episode comes to you because I was inspired to make it from a post within my Facebook group. So we have a student who posted, "I am horrified and kind of embarrassed.

After a year, and it's been a year, therapy, PT, training classes, business education, client downturn, and hiring for the first time. I had a meeting with my CPA, and I'm only at a four percent profit margin for the year. I'm horrified and embarrassed that I spent so much money. How can I turn this around?"

In which I commented, "What makes a four percent profit margin inherently bad?" Now, my friend, if you have any sort of number in your business, if you have some sort of, quote-unquote, "failure," or things aren't going as well as you want them to, or even vice versa, if things are going really well for you in one way or another, right? I want to ask you the same question. What makes that number or what makes that thing inherently bad?

What makes it inherently good? What makes it inherently a failure? And it's really important that we ask ourselves those questions, that we're very critical of ourselves, our thinking, our process of how we apply meaning and what meaning we apply to these types of things in our business. Now, the person responded with, "So the four percent, I guess, is a hard pill to swallow when other programs and coaches have said anything less than 15 to 25% profit margin is a sign of an unhealthy business.

So to fall short has me feeling like I failed on my goals this year." So, I have a ton of thoughts about this, and I think this is gonna be very helpful for any entrepreneur out there, or any entrepreneurial hairstylist in general. So if you're ready to get into it, let's go. What's the tea, friend?

My name's Hunter Donia, industry business educator for hairstylists, but my friends just call me Hunty. Whether it be growing your clientele, making more money, or automating and streamlining your systems, in the next 20 minutes or so, you'll be hearing realistic, actionable strategies to create a beautiful career for yourself behind the chair. So if you're ready to get into it, welcome to The Modern Hairstylist podcast. Okay.

Here's the thing. Before I get into the mindset of this all, and, like, the general theory of this all, I wanna dive into the logistics of this number so that way we can talk about them, all right? And we can really dive deep into this. So my community is just amazing.

Like, they are just absolutely so supportive of each other, and it just makes me so proud to facilitate this type of space, and, like, that I have these people in here. It's just truly a beautiful space to be, and I feel bad for anybody who isn't in it. Um, so a ton of people are commenting on this post and giving this person support, and also diving into the logistics, like looking on paper and the— like, what's actually happening, right? So, number one, what I asked and what a couple other people were asking as well, is, are you an S corp, right?

Do you... Is this after you have paid yourself your reasonable compensation, or is it before you pay yourself your reasonable compensate- compensation? And the reason why that's important is because you're looking and seeing, like, is this profit margin before you pay yourself, or is this after you pay yourself your baseline salary? Yes, it may not be all the money that you pay yourself, but it's gonna be your baseline salary, right?

Like, the minimum amount of money that you have to make as an S corp. So the answer was, this is four percent after this person paid themselves their reasonable compensation. Okay, interesting. This is after you as the owner took that money out of the business.

The other thing to take in consideration is, they also said this has been a year. Therapy, physical therapy, training classes, business education, client downturn, and hiring, right? This person is hiring for the very first time. This person has, um, learned new methods this year.

Um, this person has invested in a lot of different things, and those decisions are out of wanting to grow their business, wanting to invest in the long term. And I think that when we look at these numbers, we aren't thinking at- in a long-term way. We're very much thinking in the short term, what's happening right now. And I think that we live in this world that is so all about quick, easy, fast gratification, right?

Like, fast gratification. And it's so... It's so against the inevitable rules of business when you're looking at a long-term perspective. 'Cause you and I, my friend, we are building a business that's going to last a long time, not just one that's gonna do really well in the short term.

Because businesses that just do really well in the short term, uh, they oftentimes and will inevitably have their downsides. And it's unreasonable to expect any business to just always have a healthy profit margin, or to always be on the up in growth. It's unreasonable. It literally logically does not make sense, 'cause it's inevitable that you will have your down times, right?

And I know I've been talking about this a lot on the podcast, and honestly, this post is really what it's brought it up for me. Because I resonate with it. Because I have seen my own business go up and down over the past couple years, right? And I've had a lot of emotions and reactions to when it goes down, when I see my profit margin be lower.

And luckily, I am in these masterminds, and I get to have these conversations with these other multi-six-figure and seven-figure business owners. And we focus a lot on... It's so interesting how we, we focus so much, we have such different conversations, because we understand the power of looking at our own business, our own baselines, and not allowing anybody else's suc- definition of success get in the way of our own definition of success. Because the moment that you start comparing yourself to other people is the moment that you lose sight of what you....

actually could and should and would be doing to get to where you want to go. 'Cause you could get to, let's say, six figures, right? Like the six-figure hairstylist, that's what everybody freaking wants, right? You could get there and you could be absolutely miserable.

Truly, like, if you think about it and if you look at, like, experiences of many, many people, you could get to a certain number and you could be absolutely miserable. And maybe you h- would take the same actions as this person would take to get there, but guess what? Those actions make you miserable, they don't feel in alignment with you, and once you get there, you're like, "This is not even worth it for me." That's completely possible that, for that to happen to you if you allow yourself to set your definition of success and your goals based upon what somebody else thinks.

This person shared that they, they heard that another coach or a program or something, whatever, said that 15% to 25% profit margin, anything less than that is a sign of a, quote unquote, "unhealthy business." It's like, what the fuck does that even mean? Like, what the hell does that even mean? This year, my profit margin is a lot lower than my previous year, but guess what?

I grew in revenue and I also invested heavily in a team. Like, heavily. And you wanna know why? Because I knew that my investment in my team was so important for growth in the long term.

And it's unreasonable for me to look and, look at my investment of that team and expect me to get an ROI on that within this year, if not within the next two, three years. Truly, it's unreasonable for you to look at an investment or your expenses and think that they're going to immediately, automatically just get you that money back in profit so quickly. It does not make sense, right? And so when we look at these numbers, the meaning that we apply to them is so crucial that you are intentional and self-aware of.

Just because this person said this one thing, right? Or set this baseline or set this goal, set this standard, it means nothing about you and your own business. Going back to the conversations that we have in my mastermind with my other, like, fellow peers who are just fucking brilliant and doing really cool shit, we don't look at these, we don't have these set baselines. We don't have these, like, these, like, industry averages that we're so obsessed with.

We set our own baselines for our own business, and we have our fucking blinders up because you are the only person you should be comparing yourself to. That is it. That's the only person that you're in competition with. Yeah, I had a lower profit margin this year.

Guess what? I still paid myself, I paid my employees, I'm really freaking happy. The business is doing well and I am serving people very well and making an impact in the community. That's my definition of success, not that I got X percent of growth this year, and by the way, 4% profit margin.

Look, you grew. Your profit grew. You made a profit, right? You made a profit after all of those investments that you made this year.

That's an... Even after you paid yourself your average reasonable compensation salary. I don't know what the official term is for S-corp-ing. I feel like I, I hear so many ev- other people saying all these different words for it.

You made that, you're profiting after that. That's a huge win, my friend. That is fantastic. Why is that inherently bad?

And that's why I asked that question. Why is that inherently bad? So it's so important that we make sure that we are very careful when we are applying meaning to things, because you do get to decide. You do get to take a step back and look at a number or a result or a circumstance and decide that you look at that as something that is either good or bad.

To me, this looks like it's actually good. You still made a profit after the shit ton of investment that you made into your business. That should pay off for you in the long run. Or here's the other fucking side of the coin, okay?

Let's say that you invest and it did not work out for you. Let's say that there is something going on in your business b- where you made an effort and you tried something and it's not working and it's not paying off in the long term. Guess what? That's another win.

You get to decide and you get to apply meaning to that, and you get to say, "That is a massive win for me." Why? Because you just learned so much more than you will ever learn from when you actually are, quote unquote, "winning" or, quote unquote, "being successful." You will learn so much more helpful and crucial information from the circumstances that you're in or the results that you get that aren't ide- quote unquote "ideal" or the ones that you were hoping for, because you'll pay a, a lot more attention to them and they will uncover so many blind spots that you have not seen before.

You will have to learn something new because it's pushing you in that direction to do so. Those failures are so essential for your success. They are so s- they're so important, and I really, really encourage you to look at that circumstance, look at that result that you may not feel that great about, or the experience that you don't feel good about, or where you felt like it was a failure, and I encourage you to take initiative and decide that instead of allowing this to tell myself stories around it, and instead of allowing this to define the fact that I'm a failure and that I'm not worthy and my business is failing, instead of doing that, how much more productive and how much more valuable would it be to take a step back and be very intentional in finding the lesson in this circumstance, in diving into it and reflecting and looking and seeing what is actually going on, and how can I take this and use it to my advantage? How much more fucking powerful is that?

You get to decide how powerful you wanna be and how you wanna take advantage of the circumstance. Because you, two options. You can either take advantage of the, the circumstance isn't gonna change, right? You don't have control of the circumstance.

There's nothing that you can really do, right, after it's already done, so you might as well make the absolute most out of it, and learn from it, and really reflect on it and dive deep into it and take it and, uh, and move forward with it, instead of just ignoring it and leaving it behind. And also, be very grateful to yourself that your past self, be appreciative that your past self was making the right decision that they could best make in that moment. Give some empathy to that person as well too. Be like, "I understand that you only knew what you knew and you were doing what you could in the moment."

And that is all that I ask of you. That's all I ask of myself any time that I'm in my life making any decision, any time I'm in my business, any time I'm doing anything. All you can do is your best, and that is all that you should be asking of yourself. So appreciate her.

Appreciate your inner child. Appreciate your, your past self last year. Appreciate that person, because that person is the only person at the end of the day who's going to have your fucking back. It's you.

So we gotta be kinder to ourselves. Otherwise, we're gonna beat ourselves into defeat and nothing's ever gonna change and we'll never be able to turn things around. Plus, you need hope, you need happiness, you need to be able to find meaning in the shitty times to be able to continue forward and continue to do what you love and eventually achieve everything that is fucking possible for you. Damn, I'm spilling the fucking tea.

Define your own version of success. Don't get overly caught up in the outside noise. It's so normal and it's going to happen that you're going to have a roller coaster of ups and downs. It's going to happen.

So when it does happen, understand, you get to decide whether that means it's bad or good or whatever. Maybe it's none of the above. Maybe it's not bad or good. Maybe it's just interesting.

Maybe you can just say, "Hmm, that's fascinating. Hmm, I didn't get any new client requests this week. Hmm, I got five new cancellation requests this week. Hmm, I have no clients in my book this week.

That's interesting. Let's look and see why. Let's look and see how we can make the most out of the situation. Let's see what I can learn from this circumstance now that I have the opportunity to."

You get to learn from these opportunities. You are, you have the privilege of learning from these circumstances. So take advantage of that, because if you don't learn from the failures, you will never be successful as a CEO in the long run. You'll never be able to build a company that lasts a long time, and you'll never be able to build a business that weathers the storm, because shit is going to get crazy sometimes.

And if you don't have these lessons, you'll never be able to handle it. So, my friend, define your own definition of success. What does success mean to you? What makes you happy and really dive deeper into the meaning of what is in front of you.

And don't allow opinions of other people to steer you in one direction or another for what meaning you do apply to these things, because this fucking stupid baseline of, like, 15 to 25% or this much retention or this, that, or the third, it just does not mean anything. Yes, you can take it into consideration. Yes, you can. But it doesn't, at the end of the day, mean anything to you and your own circumstance, because it is so unique.

Only you get to decide what that looks like for yourself. So much love to you. I know that this journey of being an entrepreneur can be very scary and crazy sometimes. It's very easy to go into a spiral, right?

It's very easy to let these numbers control our lives and our emotions and our decisions. I encourage you to take a big, deep breath, take a big step back, look and see your personal life. You are a human being. You are separate from your business.

You are different from your business. Your business is a separate entity from you, and it doesn't mean anything about you and your worth as a human being. You've got this, my friend. I love you so much.

I hope that you enjoyed this episode of the Modern Hairstylers podcast. If you did, I would really appreciate if you left a five-star testimonial, because it allows me to get this message out to other peers and beauty industry entrepreneurs such as yourself that really need to hear it. So thank you in advance for doing that. So much love.

I'll catch you in the next episode. Peace out, girl scout. Bye-bye.

End of transcript. © 2023 Hunter Donia LLC.