Figure 8 Think you got what it takes to be a boss?
Photo: IgorIgorevich/iStock by Getty Images
We heard about Sally’s successful business plan coming to life. It is nice to hear when success happens. It is not all bad, but you have to take the bad with the good in business. So let’s stick with Sally’s journey for a bit and we can take a sneak peak in to the growth of the salon. Hold on to your hats kids, this gets a little juicy!
One day, Sally gets a call from her younger cousin Jenny, who is also a hair stylist. Jenny was very upset on the other end of the phone. She told Sally how she hated the current salon she had been working in and that she had quit. She had been part of a team who walked out from her previous salon and was promised a chair at the new salon if she went with them, but they kept her on as assistant until her boss thought she was ready to have her own chair. That day didn’t come fast enough for Jenny, so she up and quit. She heard about the expansion of her aunt’s and cousin’s salon so she called cousin Sally inquiring about a job opportunity.
In true loyal family fashion, Sally hired Jenny even though it didn’t quite sit right that she admitted to being a part of a walkout and knowingly screwed over one boss by leaving with some other team members, then quit in the middle of a busy Saturday with another boss. Those two scenarios were alarming to Sally. Jenny admittedly screwed over her past two bosses. She painted herself as the victim because she did not get her way, but they weren’t her family, so she would never do anything like that to her own cousin and aunt. Sally hired Jenny.
About five years later, Jenny had a nice growing book at the salon. She was doing well and it was nice to see. Sally had coached and mentored her to the best of her ability. They traveled to do education sessions together, had drinks after work, and their families and kids spent a lot of time together as well. They had really bonded and became very close.
In the meantime, Sally had another business opportunity with a friend of hers. Sally’s friend Melissa had been asking Sally for years to open a hair studio with her. Melissa always wanted to leave the salon that she was in and own a salon herself. However, she wasn’t prepared to do it alone. She wanted a partner, and what better partner than her old friend Sally?
Sally had three kids. Her oldest was in high school, middle in elementary, and her youngest was a toddler. Melissa had three kids also. They were a bit older though, two in college and one in high school.
Sally was willing to help Melissa from the sidelines but didn’t want to go all in because she already felt stretched thin. She was managing her and her mom’s salon along with being a mom and taking care of her kids. Melissa begged and begged Sally to join her. Sally felt her curiosity starting to kick in. She talked about it with her husband and he was supportive. After doing her due diligence and planning out each of their roles in the business, Sally finally agreed to partner with Melissa.
They formed a Limited Liability Corporation and had their partnership agreement drawn up by an attorney friend of Melissa’s. They each were going to start off with a $20,000 capital contribution. Melissa and her husband stopped by Sally’s house and pop some champagne to celebrate this exciting new chapter.
Together they begin planning. The lease signing was scheduled for a Monday. The Sunday evening before the big signing, Melissa told Sally that she was going to come by her house. She did. As she entered Sally’s kitchen, Sally knew something was wrong. Melissa broke into tears. She started freaking out and then basically had a mental breakdown in the middle of Sally’s kitchen. She backed out of the partnership agreement.
Sally was stunned and confused. Melissa had begged her to do this with her and now she is the one backing out. It didn’t make sense to her, but after putting time and energy into all the planning, Sally had gotten excited about this new business venture.
Sally decided to go through with the business without Melissa as a partner. Melissa said that she still wanted to come and work for her, but she didn’t want to be a boss. Sally let her out of a $20,000 partnership agreement.
A short time later, the build-out of the new salon was almost complete. A week before the salon was scheduled to open Sally and Melissa met for coffee. Melissa told Sally that she will not be joining her in the new hair salon. She was going to stay at the salon where she had been working. Needless to say their friendship was done. As the saying goes “Screw me once, shame on you, screw me twice shame on me.”
Hindsight is always 20/20. When Sally thought back she should have known that Melissa couldn’t hack it as a business owner. She used to talk poorly about a colleague of hers calling her a work robot, because all she did was work. In the meantime, Melissa never worked more than a 20-hour work week. The money she made was just her spending money, because her husband took care of all of the family’s finances. She did not have a strong work ethic; she just had a temporary notion that she wanted to be a boss. When things became real the thought of having to really work and dedicate her time freaked her out and scared her off.
Sally could have held her accountable for her $20,000 capital contribution, but then she would have had to deal with this unstable business partner for the duration of the business. It was just not worth it. Besides, Sally didn’t ever want to speak to Melissa again. Their relationship was over.
1. What were some of the red flags that Sally should have paid attention to?
2. What do you think Sally and Melissa could have done differently to avoid this from happening?
3. Why do you think Melissa felt so strongly that she wanted to own a business and then when the opportunity was put in front of her, she backed out?
4. Do you think Sally should have gone ahead and opened the business anyway? Why? Why not?
Journal
What did you take from this chapter?