It’s inevitable: A stressful week of deal making, board meetings and operational fire-snuffing leaves your body aching. There’s nothing you’d like more than a massage to melt away the pain.
Susan Snyder understands your trouble. As a licensed massage therapist at Ladies & Gentlemen in Mentor, Snyder sees it every day. It’s one reason behind L&G’s newest treatment — La Stone Therapy — also known as hot-and-cold rock therapy. The technique involves massage therapy using hot and cold smooth stones to help increase blood flow in the muscles.
“We’re trying to give people an escape from their daily lives,” she explains.
It’s a simple idea, but the fact that L&G offers it at all cuts to the very heart of CEO Nancy Brown’s grand plan — to give customers what they want without deviating too far from the business’s core competencies. Brown founded the company in 1975 strictly as a hair salon, but soon discovered that by using a bit of entrepreneurial know-how, she could expand the company beyond its original design.
Today, L&G is made up of six related entities. The business is run by Brown, Snyder (her daughter), and Brown’s husband, Ed Brown, the company’s CFO.
For more than 25 years, the family has diversified by identifying where the salon industry is headed and staking out a claim. Moreover, they’ve done it without growing beyond their means. It’s a strategy that’s paid off. Over the past five years, L&G has grown from 55 employees and two ventures to more than 115 employees and revenue in excess of $3 million a year.
Here’s how they’ve done it:
Pick complementary businesses
L&G first expanded in 1988 — after 13 years of building a mainstream hair salon business — when it opened The Kids Next Door, a salon geared toward the children of its clients. Next came The Mens Room, in 1990, designed to cater to a growing male client base. Five years later, the family founded L&G Day Spa, targeting a more professional clientele by offering stress relief activities such as massages, facials and steam baths.
In 1997, L&G expanded again, this time outside the service industry. The Browns founded The Brown Institute of Cosmetology, a fully licensed cosmetology school that not only has operated the past two years at capacity (75 students per year), but also boasts the second highest state board passing rate and a 100 percent placement ratio.
Get your key employees involved
In 1998, Ed Brown approached a group of senior-level employees with an idea: L&G had a golden opportunity it wasn’t exploring — its cosmetology school students. Brown suggested opening a working salon for them to ply what they were learning. It could charge lower prices — they were, after all, still students. His question was whether the senior-level employees were interested in getting involved from an ownership perspective?
The answer was an overwhelming “Yes.” Nine employees anted up into a business partnership with the Browns to form L&G Express. Less than one year later, each had recouped his or her investment and the venture was profitable.
“This is a business where the employees are treated as if they’re owners,” Snyder says. “And in L&G Express, they are owners.”
Grow within your means
Companies in the salon industry operate on very slim profit margins — approximately three cents on the dollar. That makes it difficult to leverage the business against lofty credit lines to expand. So growing slowly — and planning growth years in advance — is the best method of survival.
“We plan growth as a team,” Snyder says, adding that when they built their current building in 1995, they left two acres behind it vacant. “We’re looking at a possible expansion right now because we’ve grown as much as we can in this building.”
Among the possibilities is expanding the Brown Institute to the West Side of Cleveland or in the Akron area, says Snyder. This would reinforce the Browns’ philosophy that the industry is based on education and continuous training.
“This industry starts with education and building a career,” Snyder says. “It would be the logical first step for our next phase of growth.”
How to reach: Ladies and Gentlemen, (440) 255-5572
Dustin Klein ([email protected]) is editor of SBN.
