Owner Ship, Doing Things the Right Way the First Time

ken_new_photo_2003In our third blog of the month we continue with, Why  do so many spa and salon owners get into trouble with having employees in today’s business world.

There are 3 simple rules most owners seem to ignore.  They are simply the lack of a Legal Structure, the Lack of a Profitable Structure and the Lack of a Management Structure with employees today.  Every owner must realize that there are 2 times an employee cost them the most. Without that awareness you have set up your business to fail before you ever hire an employee.  Employee Compensation seems to be among the biggest issue with any business owner especially when it comes to those two times an employee cost you the most.  Every smart business owner knows having an employee manual is the single most important item for everyone working as an employee. This Employee manual will guide, direct and hold all employees accountable by these 3 crucial items.  #1.  An Employee Agreement  #2.  A  Policy and Procedure Manual and lastly a Job Description for each service offered within your company, including your front desk and or managers.  It is these documents if structured correctly will save any owner a tremendous amount of time, dollars and frustration in dealing with any employee.  It is quite simply what an owner doesn’t know that cost them dearly. Laws change as well as business practices.  If one does not have a legal agreement that protects your business when it comes to profitability by everything that we have mentioned above.

So here are only a couple of items that need to be incorporated into a well written agreement, there are many.

  • Placing a dollar amount on education, so if an employee ups and leaves they owe you for that training.
  • Confidentiality clauses, this alone are the new approach to replacing noncompeting clauses.
  • Compensation needs to be spelled out so an employee knows exactly what one needs to do to qualify for a salary increase whether commission, hourly or a combination.
  • A Retail compensation program that rewards an employee or Renters differently for different results, creating a partnership.

For more information contact our office.

IN our 3rd Blog, we covered the key elements of an Employee Agreements. And why it cost employers dearly when they don’t have an adequate employee structure that will support and protect the business.

IN our 4th blog we will deal with Booth Rental Agreement. And why it is so important to have a well structured one to protect your future.  What it can look like for your business if you don’t have one from the IRS, your State or a judges point of view.

Ken Cassidy

Kassidy’s Management Consultant



Owner Ship, Doing Things the Right Way the First Time

ken_new_photo_2002In our second blog of the month we continue with, why, do so many partnerships lack any kind of structure to protect their investments and relationships?   And why it is so costly when something happens, and it will.

Regardless of what services an owner offers, or the compensation method established, employee or rental, a partnership agreement will solve a whole area of issues before they ever show up.  In its simplest explanation it will, among other things, help establish the value all partners bring to the relationship.  This is extremely beneficial in the event of a business divorce. Whether one partner provides service revenue while another handles the business side, both bring value to the relationship.  And it will expedite the process in the event one partner wants out because of, say a spouses career transfer or simply each have different ideas of how they perceive the business is being run.

The next area a partnership can resolve is a silent partner, verses one who is actively working the business. When is there a payment due to the investor, how often, and is there a buyout clause?   A partnership agreement would also spell out how any profits would be divided up among all partners and how often.   If each partner performs a service and rents their one room table or chair, do they pay a flat amount of rent each month to the partnership as a separate identity within the partnership?
All of these issues should be spell out financially, with arrangements if/when something goes wrong.  Also I would incorporate in the partnership agreement an insurance policy for death and disability on each of the partners in event that something major happens.  Then the business can still survive, God forbid.  This type of policy is a business write off and paid for by the partnership.  In essence a partnership should contain the foundation of a buy sell agreement.  One should seek an attorney in your area that specializes on this most important area of their business.  If you cannot find one contact our office for a referral. Kassidy122@earthlink.net

In our 3rd Blog, we will cover the key elements of an Employee Agreement. And why it cost employers dearly when they don’t have an adequate employee structure that will support and protect the business.

Our 4th blog we will deal with Booth Rental Agreement. And why it is so important to have a well structured one to protect your future.  What it can look like for your business if you don’t have one from the IRS, your State or a judges point of view.

Ken Cassidy

Kassidy’s Management Consultant


Owner Ship, Doing Things the Right Way The First Time

ken_new_photo_2001Every owner within the beauty industry regardless of the services one provides or calls themselves has choices of how they set up their business.  Weather one chooses all employees or rent out space/room’s there is a correct way to go about protecting ones’ financial investment.  Far too often owners of spas, salons, wellness centers or medical establishments spend a tremendous amount of income to create the right environment to attract the right type of clients and overlook the importance from a cost factor of building a solid foundation to withstand the test of time.  Most owners have ignored, or are unaware of the importance of having the correct legal documents in place to support, protect and guide their staff regardless of what you call them.  No longer can an owner, not have a management structure in place in today’s business world. It costs an owner clearly every time one looses a worker regardless of their, again, whatever title you have bestowed on them.

Far too often owners don’t even have a partnership agreement, an employee agreement, a booth rental agreement or even worse call or using individuals as I/C (Independent Contractors).   In this 4-part blog series we will explore what each one of these legal documents should contain to make sure each owner is protected with the IRS, their State or how a judge would look at the beauty industry.  The importance of having the right wording in a legal document is what creates the validity to support your company.  These documents should also incorporate all the profitable issues and provide most of the management structure.  On the employee side of your business we will also explore the importance of having a Policy and Procedure Manual in place to protect your business. We will also explain how costly it can be for any owner with employees not having one in place, to meet the challenges from the IRS and your State when it comes to the business world challenges.

In Our Next Blog, we will cover the key elements of an Employee Agreements.  And why it cost employers dearly when they either don’t have one or have an inadequate one that will support the business.

Ken Cassidy, Owner

Kassidy’s Management Consultant


Monte Zwang’s Blog for DSA


You know the great thing about trends, is that the prognosticators are never called to task. Sort of like weathermen. They don’t lose their jobs if it doesn’t rain, or if it does. There is a little less leniency with economic forecasters.

I look at trends with appreciation and respect, but not as the end all forecast that is going to predict my future. Businesses exist within a market, and some flourish and some fail within that same market. Existing in any market requires passion, focus and planning. The economy is not the credit or the blame of the success or failure of businesses in our industry. They business owner and the decisions they make determines the success of their business. Too often in the spa industry, these businesses are looked at as hobbies, or extensions of solo practices, not as businesses. Well, they are businesses, and they need to be managed and run as one.

Often, I get called into situations to re-negotiate the lease and bank note on the Taj Mahal – that 20,000 square foot temple of opulence with ceiling-high waterfalls and 50 treatment rooms. The owner retired from high-tech because she loved going to spas, and her marketing background would guarantee a steady stream of guests. Then there was my friend back east who came to me and wants me to sell her 4500 square foot spa doing $1M per year with a rent of $27,000 per month. My thoughts? What were you thinking? Here before me are two intelligent, passionate business people who let the allure of the image of going into business get in the way of them making intelligent choices in the business planning process. Guess what? I don’t have enough magic dust to fix some situations.

This is where all the predictions and trends hurt. Yes our generation is getting older, and yes people are making healthier choices and taking better care of themselves. Yes again, that the pro-aging services and focus on weight loss and nutrition all favorably points to a growing need for spa and wellness services. That doesn’t translate to building the biggest spa you can because you have the money! If you build it, doesn’t mean they are going to come. And yes, I loved “Field of Dreams”.

Let me make a prediction and be the first to boast a trend. Those who are passionate about their business and make intelligent financial and business minded decisions will be successful and profitable over time. My best wishes for your continued success.

Monte Zwang

Wellness Capital Management, Inc.