Never Been Promoted | Unleash Your Entrepreneur

"Smooth Success": Brigham Dallas on Growing Hello Sugar into a Waxing Empire

April 13, 2024 Thomas Helfrich Season 1 Episode 39
"Smooth Success": Brigham Dallas on Growing Hello Sugar into a Waxing Empire
Never Been Promoted | Unleash Your Entrepreneur
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Never Been Promoted | Unleash Your Entrepreneur
"Smooth Success": Brigham Dallas on Growing Hello Sugar into a Waxing Empire
Apr 13, 2024 Season 1 Episode 39
Thomas Helfrich

Send us a Text Message.

Never Been Promoted Podcast with Thomas Helfrich

Brigham Dallas, the founder and CEO of Hello Sugar, uncovers how he has reshaped the landscape of the beauty industry with his unique approach to waxing services. As a visionary entrepreneur, Brigham shares his journey from his initial days in digital advertising to creating a brand that is recognized globally for its excellence and innovation. This episode offers a deep dive into the entrepreneurial spirit that drives transformative business ideas and leads to remarkable success in competitive markets.


About Gregory Mayer:

Brigham Dallas started his entrepreneurial voyage in the competitive realm of digital advertising, where he honed his skills in analytics and market strategies. However, his career took a significant turn when he ventured into the beauty industry with Hello Sugar. Under his leadership, Hello Sugar has grown from a modest startup into a powerhouse, known for its unique approach to customer service and market adaptation. Brigham's story is not just about business growth but also about challenging industry norms and setting new standards.


In this episode, Thomas and Brigham discuss:

  • The Genesis of Hello Sugar: Brigham discusses the transition from advertising to launching a waxing salon and the hurdles he overcame in the early stages.
  • Scaling a Business: Insights into how Brigham scaled Hello Sugar into a renowned brand and his strategies for maintaining growth and quality.
  • The Entrepreneurial Mindset: Brigham shares his perspective on what it takes to succeed as an entrepreneur, including the importance of adaptability and foresight.



Key Takeaways:

  • Market Acumen

Brigham emphasizes the critical role of understanding and anticipating market needs in creating a successful business model.

  • Embracing Innovation

Learn about the innovative strategies that propelled Hello Sugar ahead of its competitors.

  • Entrepreneurial Mindset

Exploring the characteristics that define successful entrepreneurs and how these can inspire others.


“Your greatest trials are merely preludes to your greatest triumphs.” — Brigham Dallas


CONNECT WITH GREGORY MAYER:

Website:
https://www.hellosugar.salon/

LinkedIn: https://www.linkedin.com/in/brighamdallas/


CONNECT WITH THOMAS:

X (Twitter): https://twitter.com/thelfrich | https://twitter.com/nevbeenpromoted 

Facebook: https://www.facebook.com/hovienko | https://www.facebook.com/neverbeenpromoted 

Website: https://www.neverbeenpromoted.com/

Instagram: https://www.instagram.com/neverbeenpromoted/

YouTube: https://www.youtube.com/@neverbeenpromoted

LinkedIn: https://www

Support the Show.

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Show Notes Transcript Chapter Markers

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Never Been Promoted Podcast with Thomas Helfrich

Brigham Dallas, the founder and CEO of Hello Sugar, uncovers how he has reshaped the landscape of the beauty industry with his unique approach to waxing services. As a visionary entrepreneur, Brigham shares his journey from his initial days in digital advertising to creating a brand that is recognized globally for its excellence and innovation. This episode offers a deep dive into the entrepreneurial spirit that drives transformative business ideas and leads to remarkable success in competitive markets.


About Gregory Mayer:

Brigham Dallas started his entrepreneurial voyage in the competitive realm of digital advertising, where he honed his skills in analytics and market strategies. However, his career took a significant turn when he ventured into the beauty industry with Hello Sugar. Under his leadership, Hello Sugar has grown from a modest startup into a powerhouse, known for its unique approach to customer service and market adaptation. Brigham's story is not just about business growth but also about challenging industry norms and setting new standards.


In this episode, Thomas and Brigham discuss:

  • The Genesis of Hello Sugar: Brigham discusses the transition from advertising to launching a waxing salon and the hurdles he overcame in the early stages.
  • Scaling a Business: Insights into how Brigham scaled Hello Sugar into a renowned brand and his strategies for maintaining growth and quality.
  • The Entrepreneurial Mindset: Brigham shares his perspective on what it takes to succeed as an entrepreneur, including the importance of adaptability and foresight.



Key Takeaways:

  • Market Acumen

Brigham emphasizes the critical role of understanding and anticipating market needs in creating a successful business model.

  • Embracing Innovation

Learn about the innovative strategies that propelled Hello Sugar ahead of its competitors.

  • Entrepreneurial Mindset

Exploring the characteristics that define successful entrepreneurs and how these can inspire others.


“Your greatest trials are merely preludes to your greatest triumphs.” — Brigham Dallas


CONNECT WITH GREGORY MAYER:

Website:
https://www.hellosugar.salon/

LinkedIn: https://www.linkedin.com/in/brighamdallas/


CONNECT WITH THOMAS:

X (Twitter): https://twitter.com/thelfrich | https://twitter.com/nevbeenpromoted 

Facebook: https://www.facebook.com/hovienko | https://www.facebook.com/neverbeenpromoted 

Website: https://www.neverbeenpromoted.com/

Instagram: https://www.instagram.com/neverbeenpromoted/

YouTube: https://www.youtube.com/@neverbeenpromoted

LinkedIn: https://www

Support the Show.

Serious about LinkedIn Lead Generation? Stop Guessing what to do on LinkedIn and ignite revenue from relevance with Instantly Relevant Lead System

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Welcome to the Never Been Promoted podcast with Thomas Helfrich. Get ready for a thrilling adventure as we uncover entrepreneurial journeys and life changing business insights every week. And now, your host, Thomas.

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Welcome to another episode of Never Been Promoted where we're going to help you unleash your entrepreneur. Hi, I'm Thomas Helfrich, your host. And if this is your first time visiting, you rock. I always give out dad points or some other nominal gift. You get some today. I'm not going to tell you how many till the end of the gift, until the end of the show. If you've come here before and you're listening again, I do love you a little bit more than the first time visitor because you've been here before. So, you know, just like a parent has favorite children but doesn't disclose it, I'm telling you, you outrank them. But thank you, first time visitors. Thank you. Very recurring. Coming back. We're going to do another entrepreneurial journey today. And the idea of the whole show is to learn from other entrepreneurs. And then the journey they're on, their successes, failures, and learn from it. And the movement that we want to create are more entrepreneurs in the world. And today I have a really exciting one. Brigham. We were joking about name pronunciations. Brigham Dallas, who's the CEO and founder of Hello Sugar. Hopefully I didn't butcher that. I think I did that correctly.

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Perfect.

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How are you doing today, Matt?

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I'm great. Thanks for having me on the show. I appreciate it.

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Thomas, I appreciate it. You're, you're the founder of Hello Sugar. It's a waxing company that's like taken over the world. It was pretty hairy to begin with, but now it's really smoothed out as a business.

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Yeah, yeah. Lots of, lots more. Smooth after nine years of this. Yeah, yeah. Pretty hairy. Pretty hairy start.

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I had to do it. I've been holding that in.

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I love it.

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Listen, thank you so much for joining. Do you want to take a few minutes to just give a little background on you and what your current venture is?

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Yeah, sure. So background. I came from digital advertising, so numbers were kind of like my bread and butter, just spending all day in spreadsheets, excel and Google Ads and digital stuff. So numbers was my background. I'm not passionate about waxing. I never was. I don't wax myself. The first time I got waxed was when I opened a studio and I went in and I said, why would anyone ever do this? This is the most painful, difficult thing ever.

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Charge more.

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Yeah. Like, why would people charge for this? Like, they should be paying me for this. This is. This is miserable. How do women go put boiling hot wax on their body, yet they're still scared of a spider? It makes no sense to me. Right? Like, I mean, these are thoughts going through my head.

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Spiders don't. They bite and they bite. I think it's actually becoming Spider man. But we'll take that on another topic.

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Yeah, not today. Right? We'll cover that one later. And so, anyways, like, I. You know, I looked at the business. I had a friend that was. She was just like. She was waxing, and she had a part time job. She was doing it for herself. And she said, yeah, I had to pay $20,000 in taxes. And I'm like, 20,000? Like, how much money did you make? You're like, I thought, like, hair, you know, like, doing, like, hairstylists and stuff. And she said, oh, yeah, I made probably, like, 100,000 this year. And, like, she wasn't like, you know, like, she was, like, bragging. She was complaining about the taxes, right? Like, that was her thing. And I was like, tell me more. Like, double click on this a little bit. And so she went through, and she said, look, I do four waxes an hour, 15 minutes of brazilian, and they're about $45 a brazilian. And this is like, like almost a decade ago. And she goes, yeah, they're dollar 45 a brazilian. And, yeah, I mean, the wax cost about $3 of wax. So I was like, just make. I'm like, wait a minute. You make more than a lawyer. You're making $180 an hour waxing with six months of school? Like, how did you find your clients? And she's like, well, I did a group on in the beginning, and people just stayed with me, and I just slowly built it from there. And I'm like, this is amazing. Like, wow, it's incredible. And so then I was doing scammy diet pill ads at the time, and I hated it. It was unethical. I didn't like it. I felt like, we're lying. And I thought, not really me. So I was like, I wasn't sleeping well at night, and so I was like, I gotta get out of this.

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There's a pill for that I can sell you if you'd like to.

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Okay, yeah, yeah.

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You should take a scammy pill to help you sleep now. Anyway, please continue.

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Let's do a $90 a month trial, you know, trial until I cancel. It's kind of what I was doing. So I was like, you know, I gotta get out of this business. I gotta do something new. And so I started. Hello, sugar. I didn't have a ton of money at the time. I was, you know, very, like, bootstrapping. Do it as cheap as possible. And so at the time, you know, Google Ads. I had a client who was a plastic surgeon, Doctor Musharrafa, and he let me just put a salon in the back of his office. He had the equipment, he had the table. We had reception up front. So I just, like, spent about $3,000. I brought this person down from another state to train. She spent one day training my first employee, and I opened a waxing salon.

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And you weren't doing the waxing yourself? You didn't dive in there and try it out?

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Only if the girl was pretty, right?

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I was like, ah, you saw where I was going with that. Hey, I'll take this one. Thank you very much.

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You look tired. Let me grab. Let me grab this one for you.

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You know what? Let me just. I need to try and get some hours.

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Yeah, yeah. I gotta get practical experience. I can tell you this, though, Thomas. I didn't know the difference. And I'm gonna put you on the spot here between a brazilian wax and a bikini wax until a month after I opened the business.

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I'm gonna go with this bikini. You leave a. You leave a swimsuit on, and it goes up to a line or near it. Brazilian, I think. Goes all in. Like, we gotta look at it.

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Yeah, you're. You're right on track. So bikini basic. That's what that is. Bikini full would be, like, everything in the front. And Brazilian is the butt crack as well.

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I think that's presumed. You can't just have, like, a. An Ewok hanging out the back if.

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You'Re gonna be so weird, right? Like, why would anyone do.

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The Wookiee stays away. Like, you can't have a Wookiee. They should have made it Star wars based, you know? Like, they should have had, like, you want the Wookiee? Do you want the Ewok? You know, ultra baccalaureate, whatever.

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It would be the Princess Leia.

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Oh, I mean, that's the. There you go.

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Yeah.

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And if you are job at a hut, princess lay is probably the way to go.

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And some of you got to stay with Ewok because I ain't getting in there.

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Do you have, like, other references, like the Cessna 420 landing strip dual engine, or the 747 landing strip one, or, like, anything like that?

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We get it all, man. Like, any. Anything that comes in. I mean, we got people wanting a heart shave. We got the. We got the landing strips. Yeah, we get those a lot. The landing strips. Like, and you know, the funny thing is we get reviews, and they will talk about this in the review. And your name's on there. You got, like, face, and she's like, I wanted a full landing strip, but I only got, like, half a landing strip. And, like, I'm like, man, you are a very public person, my friend. You are very public.

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You guys have the Borat, which is the male landing strip that goes up to the chest.

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No?

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All right, I'll tell you. Listen, if you're. Once again, if you're your first time listening, there are no entrepreneurial life lessons except enjoy the moment you're in.

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Live it to the forest. Yeah, we.

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Salon in the back of a doctor's office. And so some of the entrepreneurial points I want to pull out of that is you didn't go sign up for a lease right away. You didn't rock it out of your garage. You used a relationship in some professionalism to build trust with a future client set. But you saw the idea that, hey, there's. I can pay someone 15 or 20 an hour, charge almost 50 or 180 an hour or whatever it will be. And the margins are amazing. And so now you have a. You have a real business model, because now it just becomes rinse and repeat, and you can mark it into that. And so that was your idea. And you did an experiment in the back of a. Of a professional, like a doctor's office. Is that how you kind of had mindset set up?

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Yeah. I mean, like, I didn't have the money to do something else, so it was. I had to go this route. Right. But today, even so, like this, let's say I had five years of growth of this, where I would do a suite, I'd prove the business concept. I'd spend maybe $10,000 on the first unit, and then I would go find an actual location and build out a big studio after. And so I could go to the bank and say, hey, proof of concepts here. Will you give me a loan to do a larger unit? And by the time I opened this unit, I had all the clientele. I had enough to pay rent. That was my, like, criteria. Could I make enough money to pay rent in this large one so I'm not, like, under. And then I would go find a large unit, take a loan out and build it, and then I would build another studio somewhere and prove the business model in the new location. And it turned out over time within Phoenix, it's really impossible to get it right every time. But with this model, if I'm spending $10,000 on a studio, like a little tiny suite, if I miss, it's so relatively inexpensive to do these studios that I'm profitable with very minimal amount of revenue that I could just leave that studio there. So I don't know if you know, the Phoenix market, but on the fringes of Phoenix, like Queen Creek or Iowa Tuke, I still got studios out there. I don't have full on salons because they weren't, like, the best locations for me. Uh, whereas other locations that knocked it out of the park.

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Bam.

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Instantly. So confident about spending a year of my life and two to $400,000 on a business loan to build another location.

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I mean, in your model, I think you probably only need 60 hours of billable time to break even, which is 15 hours a week of customers giving up.

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That's about right. Yeah.

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So, like, 180. Not that I'm doing math, but the, like, about, as you know, 15, 20 hours a week makes you an okay business. And if you can get it to 40 hours a week, you got a really good one.

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Yeah, that's about right. That's about right on that. I mean, we probably take about on these sweets probably, like, ten to $14,000 to break even. Yeah, that's good.

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And so I think the lesson I try to tell people is, you know, you didn't have a lot of money, but that didn't stop you from solving it. The truth of the matter is, you probably could have, because you had the marketing element, so you parlayed something you knew how to do, which is, I think I could find people to go get this, and I already see, you know, that people pay x, so you took, I don't know nothing about it. So I'm going to bring someone in to go do it, and I want to get into that detail a bit. But the entrepreneurial lesson here is you would have solved it in a comfortable apartment. You could have rented for $500 a month if you needed to. You could have said, hey, private space. You could have set the whole thing up to be very comfortable. Whatever it is, you would have solved it. You had another route to go do that. That's the idea, is that don't let things like money get in your way. Get the idea, go prove it, and to go hack it out if you have to. It sounds like you did a little upgrade past that. Fair enough.

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Yeah. And I would even argue that, like, even if you have the money. Don't spend it that way. Right? Like, go the other route. Start small. I mean, you look at, like, some of these big blockbusters. Why do blockbusters today kind of suck? You know, it's because they check a box, they have, like, a $500 million budget, and they're like, okay, we have to have this kind of action, this kind of storyline, and it's kind of like, rinse and repeat. It's like, I don't want to spend $500 million and do something out of the box and it fails. So I got to do what's ever in the box, right? It's the same thing with businesses. It's like, you know, why do some of these businesses disrupt? It's because they started with almost nothing and they had to do something completely different, ingenuitive, and start training a new model and stuff. And it works that way. Right. It, like, actually works. And so with this, you know, I. I. Maybe today I could start a $400,000 salon out the gate, but it still would rather do a suite that costs me, you know, 20,000 or less because the proves the business model. And it's like, it's, it's just smarter, better risk averse strategy.

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Oh, actually, how you described it, I don't think I'd want to go to a bigger salon. I went somewhere where if I'm screaming, the person next door to me doesn't hear me crying as I'm getting bulkholes ripped out of my bunghole. I mean, like, I mean, like, the intimacy of, like, I'm the only one here is good. Tell me about your hiring. So, hiring deep. What are the cons? What are the things you really look for in honesty of an employee?

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Yeah, let's, let's kind of talk through that for a second. I think every entrepreneur needs to know how much it costs to hire somebody. So our cost today is $1,500. So by the time we take somebody in the door, we hire them. We go through the interview process, plus training them to become a waxing professional. It's about 1500, and I'm on the low side. I think probably it's closer to 2000 when you put in intangibles, but let's say $1,500. So if you get it wrong and you have to terminate within three months, that costs you $1,500. So a year and a half ago, I went through predictive index, just like this personality test. There's a lot of them out there, but this one's specific to job professionals. And it costs me $12,000 a year, and it comes with a consultant. And we build this profile of what we're looking for in an esthetician. And the thought process on this is I've got maybe 80 to 100 employees, so if I could just find. And I'm hiring probably, like, five to ten a month, right? So if I could just find, like, twelve, like, maybe, like, eight more employees that are good this time around because of this test, then I'm really, like. It's, like, working for me, right? And it's, like, worth it. So our hiring process is unique. We first do a personality test. If they don't pass the criteria for somebody in our personality group and for us, we know our customers want to feel comfortable. Right? Like, that's the main thing. You're naked, exposed on a table. You want to feel comfortable with the person waxing you. We don't hire the scientists, the actuary, the librarian kind of personality, creepy dude.

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That sits out in front of your studio that fogs up the window. Do you hire that guy?

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You know, we haven't tested it. We haven't tested that model.

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So I have. I have people that. I'm asking for a friend.

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Ask for a friend. Yeah, yeah, yeah. We'll put a pin on it. Maybe we'll try it out and see what it goes. I don't have any, dude.

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Hey, would you like creaky fog up the glass guy or the esthetician that is well trained?

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Yeah, yeah. We'll ask the client. Tell.

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Hire your friends is my point of that statement. All right.

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Yeah, yeah. Speaking for a friend. Yeah. And so, you know, we go through this hiring process. We do the. We do those for the interviews, and then we do a first round interview, which is a vibe check, which is like, hey, are you a good person? Do you fit into our culture? Kind of thing? But then the next interview is a sales test because we got to make sure that the person can sell memberships, which is, like, our lifeblood. And so I actually film a video in this very room where I teach people how to sell memberships. It's an hour long. It's, like 510 parts. And then what we do is we put together a Kajabi course. Kajabi is like an online training tool. And so everything in our hiring process is in Kajabi. So the first PI, there's a link to it. And then once they finish the PI and it works, we bring them to the next level, which is you have a calendar link to schedule an interview. They do the first round interview, and if we like them, we give them a calendar link to schedule a second interview. And it's all automated. Like, they instantly get an email from this. They get a text message from us. It's like once they get approved, we just click a button, it goes to the next level. They schedule the second meeting, they get all the course material, they go through the sales training, and by the end of two meetings, we have a really good idea if this person is going to be a great fit or not. Uh, the benefits of this is we get really qualified estheticians. The downside that is, in smaller markets, they just don't want to do it. They don't want to do all that work. You know, like, if they can get a job with one interview, they're going to go with somebody else. And so sometimes we lose good estheticians because our process is too thorough.

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I, you know, but that also speaks to someone who's not willing to put the effort in as well. So, and your personal brand of somewhere that you're going to be treated well and all those things kind of matter, I think, behind it. So I think you actually weed out ones that I do so work for three months that are looking for the next best easy thing. And so, you know, you want. Selling memberships, by the way, isn't easy, even if you're good at it. And I think you need the people who are kind of, I think your pride process is excellent. How much in your world, though, do you consider the things that you probably can't talk about? How they look, how they appear, smell, things like that aren't on the job application. And I say hire deeply. That's, these, some of these things are around a brand. So how do you handle those teams, if at all, in your business?

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Yeah, you know, my perception of this has, like, did a 180 since I started. So when I started, I was like, looking at european wax, which is the big competitor, and they take like a high fashion profile. Fashionista is their, like, demographic beauty. I'm like, cool on the Runway, kind of like branding. And so I thought they would hire estheticians that were like models, right? And so I was like, okay, we got to hire the prettiest, best, like, looking people because that's what that give the people what they want, right. And it turns out that that is like the worst thing you could do in my industry. Right. Because if you're like this supermodel, you know, you're like Reese Witherspoons and you, and you have somebody come in facts. Females all think that they're not pretty. They look at every single flaw about them, imperfection, and they're like, they're not pretty. My wife's like this. She's a dime, right? She's gorgeous, and she's always like, the most insecure person when it comes to looks. And I'm like, like, why do you, you know? Anyway, that's another story.

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If she flew in there and threw like, a rubber chicken at you right now, it would be hilarious. Like, you shut up.

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She's like, coming from the, like, nursing at, like, the hospital with like, her needle or something like that. Yeah, it's covered. It's covered. Yeah. So anyways, like, I, I started hiring people that just make people feel comfortable. Doesn't matter what they look like. I don't care if you have, like, a big body, a small body. Ethnically, it doesn't matter. I just want you to, if you come in the door and you can make somebody laugh, smile, or feel warm and welcome within 20 minutes, remember something about their week for the next time you see them. That's what I'm looking for in an aesthetician.

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Yeah, I agree. And the point I wanted to make with that is don't hire based on an image. Hire on a function. And your brand is more than how someone looks. It's more about how I was treated, how I feel and what I got done for me. And that, that's a really, I'm glad you went there and I assumed you did. So because there's no way you've gotten to, we're talking about your franchising, where you have doing it the other way. And I think a lot of entrepreneurs I've met, you see, sometimes they have an image of what they want versus what their customers need. And I think you've nailed it with that. So you've got them set up. Now. Talk to the future here. So when did you decide to franchise? And that's a whole step by itself. So maybe for the entrepreneur listening who's like, I would love to have my first store, maybe give some closing advice of, I think you've said it, but like, here are the three things. If you're going to do this, something like this, start small, do this, do this. But then if you're going to franchise, what was the next piece? And I think you've talked about it with some automation on your processes. But tell me about the transition from one or two store proved out to having to do an FDD and all the other things for becoming a franchise.

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So I ran five years by myself. So five years without franchising. I built, I think, eight or nine stores at that point. Yeah, I think it was nine stores. Some were sweet, some were flagships. Flagships being like a 1200 square foot adjacent to a grocery store, kind of like the typical boutique you would see. And at the time, I was teaching at a university, a class on how to start small businesses through advertising. And that was my calling in life, was just helping people start businesses. And I really had a passion for it. And I said, you know what? This is kind of what I want to do in the future. And I really love my business, so why don't I franchise and I can help other people start a really good concept and grow this business. You know, the unit economics are good. Let's try it out. And what I know now about franchising versus what I knew, knew then, I just thought, hey, cool, I'll just franchise people start. And it's like, okay, franchising your business is like a one in a thousand. Like probably chance that it's successful. Like, it is very, very difficult to franchise a business and get it off the ground because what happens is if usually they're going to go, first off, you don't have the money. You think you have the money, but you don't. It costs about $100,000 all in the first year. But then you have salaries and payroll and then you have to, you have to be a technology company. You have to really be savvy at bringing technology to these franchisees. And if your first franchisees don't knock it out of the park, like, they're not making like tons of money, you're dead in the water. And so it's a lot of luck too. Like, did you pick the right cities to go into, the right territories to go into? And so I franchised. I spent 25,000 on my, like, legal documents the first year. And then I started with two people in my, in my, like, network that were like estheticians or like receptionists in the company, and I paid for their franchises, so I built them and I just said, hey, go out and do your thing. I'm going to pay for it. Let's just see what happens. It's a loan, you can pay me back.

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So when you first started, you took some people who had that you knew could run it and they had an ambition to want to do it and say, yeah, pay for your franchise just to prove the model.

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Yeah, yeah.

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And so you don't have fees. You're going to go in, like, you know, member, founder. You've been doing it. Reward. And they're probably like, oh, wow, I'm going to be an owner of my own spot.

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Yeah. They're like, that's something I haven't heard.

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A lot of people do before. So that's amazing, because then you're proving the model yourself.

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Yeah.

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You get it out, and then now you have some revenue coming in from. All right, that's great.

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That's small business loan. They still had to pay franchise fees and everything else, but within three months, I got them to profitability. So they were profitable, they were running, they were successful. And about six months in, I had p and ls that were awesome. I shared them with my friends. And so then I went to my, like, so I've been teaching for three years at this university, like, you know, straight. And so friends were. Mine were, like, former students. And so I went to some of my friends or some of my close, like, like, confidants, and I said, look, would you like to start the salons with me? Like, here's the numbers I have so far. Full transparency. I don't know how this is going to work. And so I didn't open this to the public like most people do. So I went to two of my friends and they were like, yeah, let's go. And one started in Houston. One started in Boise, Idaho. And then at the same time, I started a franchise in Nashville, Tennessee, living in Arizona. So I'd fly out there every month and do it just like they would. Because my thought was, I've got to put my money where, like, I don't know, these markets. Like, let's try this together. And candidly, like, it was a terrible, really hard run. Like, we had no idea what we're doing. We started way too many at first. We didn't know how to work our hourly wage differences. So we were, like, very unprofitable for the first six months. Um, and it was. It was tough, right? It was very tough about six months. Then it turned a corner for these guys and for me in Nashville.

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Why did it turn a corner? I was going to ask you. So how'd you turn it?

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Yeah. So there was, like, three really big assumptions that we made that were, like, false. So number one was we paid. We wanted to give them a good wage, so we paid, you know, if the hourly, like, the minimum wage was like $8 an hour, we were paying like $13 an hour. But what happened is they wouldn't want to sell memberships because they were like just chilling. They were like good with the extra money and a normal esthetician, just to give you an idea, probably six first six months making $20 an hour with tips. So that 13 plus the tip money got them to about 20. And they were just chilling. They didn't have to really work at it. So then we dropped the minimum wage to $10 an hour. I didn't have to pay the hourly wage difference between their commission and the minimum wage. And that dropped. That probably saved us like one to $2,000 a salon. The second thing is we started with two room suites instead of one room suites in the beginning and that just increased our costs more than they needed to be. So we found like, just like I did with the plastic surgeon, we found like salon suites, they're just boutiques and you can rent by the week for like $300 a week. And so we rented these suites and we would do two at a time. And that added another $1,500 in cost to our, like, that we didn't need in the beginning, right? So starting out smaller was better. And then the third thing was we did multiple locations. So where you might lose 2000, now you're losing like four to 6000 and it became like unattainable, right? So because like when you, when you hire, like, let's say you're hiring ten people and you get 30 applicants, you're taking a few that are really good, but most are like, maybe half of them are not that great out of those 30. So if you hire just two people out of 30, you're getting the absolute rock stars. So just slow to market was a better strategy in the end.

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And now fast forward now. So you have, like, I think you said 79 locations and more coming. Are you doing all the origination for franchise owners yourself?

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I don't know what that means.

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Are you using consultants and paying them a fee to find them for you?

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Gotcha. No, no fees, no consultants. We're doing everything in house. I think our brand is good enough that we don't have to find consultants to do this. So, yeah, kind of fast forward. So that was year one and I just had my friends do it. So I just opened it up to my own network and every single time we got a little bit better. And I was fully transparent with everybody. Like, these are my friends. I'm like, look, this is going to suck, this is going to be hard, but I believe in the future you're going to be very successful because of this. And all the people that started in the beginning, I believe are. Are very close to being millionaires at this point. Or, like, they're like, on that track. Their net worth is over a million, but maybe they're not cash to the bank a million yet. Um, but they're. They're doing awesome. Like, I'm very proud of them. Uh, the second 2nd year, you know, we have like actual FDD, which is like. Like published numbers called item 19, where you publish things. We published everything. So we published the profit and loss statements of the bad ones, the good ones. I mean, it was like fully transparent. And we just went to town and we just started reaching out to networks, friends of friends, that kind of stuff, started building it. And then the year three, which is, I guess. Oh, I guess this is year three was 2021. Now we're in 2024. So I guess we're really in year three. So in two years, we grew to 79 locations. I mean, we just exploded in growth in this time period because it's profitable, it works well. And I think the other thing, that. One last thing on this, Thomas. I think the other thing that made it so compelling is that we don't do the big model like everybody else. We do salon suites, just like I started my first location. So we do a salon suite. It costs 60,000 to put up. And according to our FTD, which is the only thing I can talk about in this, I can't legally say anything else. Uh, the average unit is making 67,000 profit after the first year. And the top quartile making 110,000 profit on a $60,000 investment with five to 10 hours a week of time put into this. Take that location, you build it, prove the business model, then you get a loan. Find a flagship, which is that 1200 square foot place. You take a year of your life to build it out. Cost maybe two to 350 is like averaged for these things. And you're making profits the whole time from your suite. So you're never in a downplace. Then you close your suite and move into the flagship. And now you've got this big unit that's making 150 to 250 for the averages of the flagships and profit. And it's successful without losing sleep, knowing if it's not going to work or not.

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Yeah, I mean, listen, we looked at ourselves as a couple, as this is a very. If you don't think about franchise, that's an attractive services based. I'll tell you what, even the studio, a lot of little studios, doesn't sound bad either, because you can kill locations if you needed to. And so, you know, 60 here, 60 there, 60 there. Making on an average one is, I mean, I know you can't share that, but you know, that's amazing. And it's a conversation we're going to have after the podcast. All right. Just conscious of time and your journey is amazing. So listen, throw some. If someone's interested potentially in franchising or just wants to learn from you, from what you're doing, go ahead. And I always call it the shameless plug, but talk about, you didn't mention this, but you're like Top Rank entrepreneur magazine company right now.

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Holy crap. Yeah, we just, this came out last week. We're in the top 500 for Entrepreneur magazine in terms of franchises. I mean, there's four or 5000 franchises out there and we got the top 500 within their third year. That's pretty incredible to me. I'm really proud of our team to make it there.

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It's time for you to sell it and just exit and go do it again and then become a franchise speaker. And you got tens of millions coming. It's gonna be great.

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Yeah. My vision is to make this a national company. And I believe that what makes this so unique is that you can start with $60,000 versus starting with hundred thousand dollars, and you can build a really good business and you can do with five to 10 hours a week. So you can keep your full time job until this becomes like your full time job. Right. And so that's really appealing. I believe we can make a national company that's going to be successful for everyone. Uh, and that's like, that's what I'm excited about. Hellosugar salon, you can find us, if you want to go to like, you know, franchise, Google, Google, hell of Sugar franchising or something, you can find us that way. Um, if you're interested. But you know, you're asking about kind of like tidbits for people. Are you asking for people like, looking to franchise with a company or start franchise?

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Maybe to rephrase the question. It's a shameless plug time. Who do you want to contact you? Why and how do they do that?

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Oh, geez, I feel embarrassed. Okay, yeah, this is a shameless plug, guys. I'm not just doing this to find people for the franchise, but yeah, look, like, we love entrepreneurs. We love people that we can like, trust and respect. That's who we let into our company. Um, I remember having a meeting with a guy, he was like, yeah, I want to do three locations. He had like 750,000. He was putting up and he's drinking a beer and vaping on the call, and he's very successful. And I'm just like, that's not my people, right? Like, I want somebody that, like, I really can, like, connect with. And I feel like, like, trust and respect, you know? And, and so we just, we ended up saying no, like, to this guy that was willing to, like, throw money at us. And I'm like, it's just, I just want to work with people that I can have a good time with, that I can feel like I can respect them and like them and trust them. Uh, and, you know, it doesn't matter if somebody 25 years old, they can be a really amazing entrepreneur even at a young age. I mean, we have 25 to 40 year olds in the company and, and we have, we have trips every year. And I just think in my head, I'm like, would I want to go on a trip with this person? You know, like, would I want to vacation with this guy? Is he a cool person to be with? Because life's too short, you know, I want to do business with people that I like, that I enjoy being around, and I don't. And that's so important to me. It's more important to me than just making money, because at this point, look like I've got 14 salons in Phoenix, I'm doing okay. This isn't just about the money for me. This is more about creating a very amazing lifestyle, having really good friends in the business and helping others succeed. It's something I'm very passionate about.

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That's wonderful. And you're right. Trusted, known. Like, I like you and I can respect you. That by itself creates a better brand. And I think you're spot on. And maybe it was intentional. Not intentional. It doesn't even matter. It is what it is. From the idea that if you're thinking about how you create your brand, think of it in that terms and less so of who I should do business with to make money, because that path ends poorly. The other one ends with people wanting to buy your brand, people wanting to be a part of it and work with you. And also, I think from the employee hiring standpoint, was tying back to, we were talking earlier, people want to work somewhere where they feel respected and they feel they can trust their employers and have a safe place, fun place to work. So I think those are all something things you want to consider as you do this. Let me do, let's pivot. I always like to do a little kind of like, you know, takeaway around you. Know, quick round, hot seat, what, if you will? Hot potato. It's hot potato. What's, like a one business book as an entrepreneur that you think, you know, entrepreneurs should read?

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You got to leave. Limit me to one.

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He was on the question form. You have to. No, I was kidding. You don't have to do one. You could do multiple. But, you know, I always. I always try to ask for the pinnacle one. If you only got one to read. What is it going to be today?

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Uh, Tim Ferriss for our work week.

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Great choice.

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Yeah, it's a good startup book. I think it kind of took me to understand systems and build systems. Uh, can I give you more? Like.

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I mean, Tim Ferriss is great. Some of those things are very specific to, you know, product direct to customer. But the idea is that the mentality being build systems, you won't be able to do it day one, by the way, people. So just build a system that's repeatable even if you don't. Like, you know, it's like, have your company franchisable, even though you may not ever franchise it.

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Yeah, build a system that's. I mean, that's. That's the benefit of, like, business. Like, you need to build something that can work when you're not there.

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Exactly. And what else?

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Chris Voss. Never split the difference. It's a negotiation book. You use negotiation throughout your entire career. It's. It's worth it. Even if you're working for a company. Like, you need to know how to work the nuances. I find that people that come from low income scenarios, and this is maybe a little bit contrarian, have this all or nothing attitude. You know, they grew up in, like, a very poor situation, and they just felt beat down their whole life, and they just shut down. Right. And so learning that not everything is black and white. There's nuances, there's grays. You know, I come from a very poor situation, and those grays are where you. Where you really find the wins. So. Chris Voss, never split the difference. If you're building a business on and you need culture in your business, which is, like, five plus employees. Principles by Ray Dalio. You can skip the personal section if you want to get to the meat. Principles, by way, Dalio, help create the culture that I needed for. Hello, sugar. If you're looking to sell a business, if you're, like, on the more mature side of the life cycle, enterprise value is one that I'd recommend. It's about creating a company that's worth it to sell.

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Yep.

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And then how to legally raise money. It's by this lawyer from Florida, this book. I think most people just don't know how to do capital calls or raise money. I think it's just not intuitive to most people and it's one of the single greatest things that can bring us to a point, like to a point to grow your business. If you don't have money but you have a great idea, you can find money. Money is not a scarce resource for those that have good ideas. So it's called how to legally raise private money. It's $25 on Amazon and that's a book that I would highly recommend for those that want to negotiate.

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Those are excellent. Maybe who on social media you could choose your platform, what you like, but who do you like to follow? Who do you recommend following from just a content or just perspective?

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Geez, man. All in podcast. I freaking love all in podcasts. It's these four billionaires that just talk about current events and I get a lot from them.

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That's pretty good. And that's actually no. So I think all in podcasts is a, it's a, if you got some time to listen to a good podcast, I agree. That's a fantastic one. And I don't have a lot of time, but the few I've heard, it's been fun. Last question. I'm going to throw this out there now. This, this one is, I always people who, if you, if you've been here before, you know, it's an important question, but have you ever been promoted?

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Have I ever been promoted? I'm going to tell you something. After college, I never worked for a company. I always did my own thing.

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Oh, you're going to be a charter member so you can join the never been promoted club. Congratulations, you're in. You've answered the question correctly. You're in the club. I mean, listen, it's a hard club to be in and it doesn't actually matter, but if you haven't been promoted, I just like you a little bit more.

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Just.

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You never tried those. Maybe you're a quitter. We don't even know it.

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Maybe I'm a full time quitter.

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Title full time quitter. Thank you, by the way, so much for joining and sharing your story. Like it's, I'm really, I'm jealous and I don't like you very much now because you're so successful. But I just want you to know that I'm honest with you about it.

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Okay. At least we know where we stand with each other. Yeah. Thanks a lot Thomas, you've been a great host.

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It's been great. And there's lots of stories here of, you know, of success and challenges. But you took your challenges. I didn't hear anything, like, I was so stressed. It was, I just took it and did something better with it. You were honest with people in your journey and friends, and you found the right markets to start with. You didn't over invest. You tested things. And I think the idea from the entrepreneur standpoint is take your idea, test it, try to make that 1st $300, that 1st $200, the first 1000, 5000, and then replicate it in a system. And as soon as you can do that, you're on your way to doing something awesome. It might start as a side hustle or even a quarter side hustle, and eventually you'll have a bad day at work and you're like, I'm doing this full time now, and that's how it usually goes. So thank you once again. And everybody's made this part in the podcast or video here. Thank you for taking the time to listen to us go back and forth and Brigham. It's not Brigham. It's Brigham. That was a tie back earlier. Thank you, guys. Anyone who made it and if this was your first time, come back. And if you've been here before, we look forward to seeing you. Until I see you next time and you listen to the podcast, I've never been promoted. Go out there and unleash your entrepreneur.

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Thanks for listening to Never Been Promoted with Thomas Helfrich. Make sure to check the show notes for our guest contact information and any relevant links. Connect with Thomas personally at neverbenpromoted.com.

Introduction and Guest Background
Starting Hello Sugar
Early Challenges and Business Strategy
Entrepreneurial Insights and Expansion
Hiring and Company Culture
Future Plans and Franchising
Franchise Growth and Lessons Learned
Success and Expansion Strategy
Final Thoughts and Future Vision