Small Business Success Story: b space salon

The stylists at b space salon in Salt Lake City use scissors to sculpt shags, perfect pompadours and blunt bobs. They weave color with expertise, cover miles of gray roots and are adept at balayage highlighting.

But their biggest challenge in recent months? Occasionally, they slip up and snip a face mask strap.

“Cutting around a mask has been a challenge,” laughs Chad Lott, who has co-owned the hair and nail salon with business partner Michael Noragon since 2007.

Of course, the more formidable challenge was enduring six weeks of shutdown in 2020 resulting from the COVID-19 pandemic. After re-opening they experienced a decline in appointments as virus infections grew in the summer and fall.

Now, the salon is back to its normal client volume. Lott and Noragon, who both identify as gay, are feeling pride not only because it’s Pride Month but also because they survived the crisis that hit salons particularly hard. Along the way, Lott says business owners and workers — many of whom work in salons and service industries — found support networks within the their LGBTQIA+ business communities.

Lott shares some secrets behind their business, its adaptability, and even some hair trends.

Small Business Success Tip #1: Consider investing in real estate

As they started to outgrow a Sugarhouse retail location where they had operated for 10 years, Lott and Noragon started looking into buying a new commercial retail location. “We knew we didn’t want to have a landlord anymore,” said Lott.

They prequalified with a real estate broker who recommended a U.S. Small Business Administration 504 loan* through Zions Bank. Building equity in real estate is part of the owners’ long-term financial planning.

For businesses interested in applying for an SBA 504 loan, Zions Bank is well positioned to help. Not only is Zions Bank an SBA preferred lender, but it consistently ranks among the top SBA 504 lenders in Utah and Idaho.

With the 504 loan program, a borrower typically provides 10 percent equity with the remainder split between a bank (50 percent) and a Certified Development Company (40 percent) backed by an SBA guarantee. The portion held by the CDC is a fixed-rate note, which reduces the borrower’s interest rate risk on that portion of the loan.

Maximum loan amounts range from $5 million to $5.5 million to purchase real estate, equipment and machinery and can also be used to upgrade or remodel existing owner-occupied facilities. Because they typically require a 10 to 15% down payment and offer 10- to 25-year terms with low interest rates, SBA 504 loans are particularly attractive for small businesses.

Lott and Noragon found a 3,600-square-foot turn-of-the century home twice the size of the Sugarhouse rental was attractive. They were able to expand from two to four nail stations.

“We wanted the investment and the chance to build capital for retirement,” Lott says. Looking to future growth, he hopes to expand to multiple locations and finance additional commercial properties.

But first, he had to keep his Salt Lake location alive during the COVID-19 pandemic.

Small Business Success Tip #2: Find new ways to serve clients

Recognizing that some clients urgently needed a way to color their hair during the shutdown, the salon offered pre-mixed custom color kits to go. Clients picked them up in the parking lot and took them home to do their own touch ups.

“We don’t want clients to color their own hair, but it became a necessity for their self-confidence and style,” Lott says.

The salon also sold a lot of root spray, which offers temporary color, helping clients hide their grow out. But a surprising trend was how many clients naturalized their hair color.

When b space salon reopened in June, many clients had embraced their natural gray and asked for shorter haircuts to trim off the grown-out color.

The salon partnered with the health department to provide information on contact tracing, if needed. Strong protocols that included taking client temperatures and requiring masks meant that there was no transmission from stylists to clients. Waiting area seating was arranged for greater physical distancing and hair stations were distanced. Staff were instructed to eat meals alone on breaks.

The salon’s historic location includes a large front porch, which became a great place for clients to wait outside with foil in their hair as color processed.

Small Business Success Tip #3: Maximize email and social media

The salon relied on email communications to stay in touch with clients over the course of the 2020 roller coaster. Emails full of warm vibes and encouragement informed clients about the shutdown, explained the process for ordering and picking up color kits, and invited clients to consider buying gift cards. The suggestions worked — devoted clients hesitant to visit the salon over health concerns bought gift certificates and services in advance.

The emails also invited clients to submit salon reviews on Yelp, a tactic that propelled b space salon to rank No. 1 among Salt Lake City salons based on ratings (it currently sits at No. 2).

“Yelp really helped build our business,” he adds. The salon’s stylists continue to build their business through their own social media accounts, which are also posted with staff profiles on the salon’s website. When it came time to reopen, emails helped set expectations for safety protocols.

Small Business Success Tip #4: In a tight labor market, grow your talent

More than a year after the shutdown, b space salon is seeing a shift in styles.

“There’s a lot to do to catch up. Peoples’ self images are being reevaluated,” Lott says. Among women clients, he’s seeing more minimalist cuts. To stay up on the latest techniques that support the style trends, Lott and Noragon find ways to build their junior stylists’ skills. They note it is particularly important in a tight labor market.

Over the past year and a half, they encouraged junior stylists take advantage of technology by attending Zoom workshops and online trainings to hone their craft. Now he is exploring more opportunities for advanced in-person training for his junior stylists featuring guest artists.

By investing in the professional development of his staff, Lott believes he’s building loyalty and bench strength for future growth.

“Over the past year, our team has come together in ways we never could have imagined,” he says. “We love our stylists and want them to know we’re here to support them along their career paths.”

Looking to start or grow your own small business? Zions Bank offers online business tools including business templates, columns, videos and financial calculators. Our Business Resource Centers in Salt Lake City and Boise provide 1-on-1 counseling and group training for entrepreneurs. Zions Bank’s team of relationship managers can help you find the right SBA loan for your business. Apply for a business loan online anytime or visit a local Zions Bank branch to learn more.

*Loans subject to credit approval and SBA approval. Terms and conditions apply. See a banker for details.