Female Founders: Chelle Neff of Urban Betty On The Five Things You Need To Thrive and Succeed as a Woman Founder
An Interview With Candice Georgiadis
Your business model doesn’t have to be perfect and will change. Often, what your company is at the beginning evolves into something different. When I first opened my salon company, I had a contractor-based pay model. After a couple of years, I learned that the best way to achieve a profit and a cohesive culture was to switch to an all-employee-based business model with structure. In 2010, I changed my salon company to 100% commission, my brand flourished, and everyone was on the same page.
As a part of our series about “Why We Need More Women Founders”, I had the pleasure of interviewing Chelle Neff.
Chelle Neff has been a leader in the U.S. salon industry since founding Urban Betty in 2005 and has more than 20 years of experience creating innovative practices in the salon and beauty worlds. Neff has successfully grown Urban Betty’s revenue year after year and today has two salon companies that house more than 70 employees. For four years consecutively, Inc. 5000 named Urban Betty as one of the fastest-growing privately held companies.
Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit more. Can you tell us a bit about your “backstory”? What led you to this particular career path?
I began my journey as an entrepreneur by first being an employee in the salon industry. I knew from a young age that I wanted to do hair. At the age of sixteen, I was offered the chance to enroll in Cosmetology school at my high school. During my junior and senior years of high school (1993–1995), I attended half days of regular classes and half days of Cosmetology school.
When I received my license in 1995, I started working behind the chair at Supercuts. I slowly worked my way up the ladder to higher-end salons. I got a small suite at the Gallery of Salons and was an independent contractor five years later. That was my initial stepping stone to running my own business.
I was all by myself for the first week when I opened Urban Betty Salon and had only one hairstylist/contractor for the first 3 months. I didn’t hire my first employee until 6 months after opening. At that point, everything that I did behind the chair paid for the entire salon and my household. It was a very stressful situation. I figured out after having one employee that it was much more profitable to have employees rather than booth rental/contracted hairstylists. After about six years, I slowly phased out all of my hairstylists that were contractors and transitioned to a 100% commission-based salon.
Can you share the most interesting story that happened to you since you began leading your company?
When I originally structured the pricing list for services at my salon, I offered package deals and all sorts of special discounts. I thought surely this was the best way to draw in new business. After struggling to make ends meet, I finally ran a report to see how much money we were giving away. It was an astonishing $50,000 in just one year! After that, I hired a salon consulting company and a business coach — Summit Salon Business Center. Within the first 3 months of hiring Summit, we restructured the pricing on our service list to an a la carte menu with only a limited amount of discounts. Our revenue grew by 30% the following year! Once our profits quickly turned around, I was able to retire from doing hair in 2016 and focus solely on managing Urban Betty.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
In 2002, I launched a website with a terrible logo. At the time, I thought my logo looked good. It was a lady with a city background, and she seemed very cartoonish. Think Sex and the City if it were a children’s book. Not good. We reworked it after a couple of years. I recently found an old scrapbook with my first brochure and the original logo. I showed it to my employees, and they couldn’t believe how bad it was. We all had a good laugh! I learned that you should constantly be re-evaluating your brand and evolving to stay current.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
I wouldn’t be where I’m at today without my life coach/therapist, Rebecca Hamm. I met with her once a week for the first five years after I opened my business. I am down to every other week now. When you are an entrepreneur, you frequently need someone in your corner who can call you on your B.S. in a gentle way. She does that for me. She has helped me overcome my ego and become a boss in every sense of the word.
Ok, thank you for that. Let’s now jump to the primary focus of our interview. According to this EY report, only about 20 percent of funded companies have women founders. This reflects great historical progress, but it also shows that more work still has to be done to empower women to create companies. In your opinion and experience what is currently holding back women from founding companies?
What I think is currently holding back women from founding companies is the cost involved and the uncertainty of the pandemic. When I started my salon company in 2005, it cost me a total of 70k, and right now, for that same project, it would run much closer to 200–250k. And while inflation with the costs of supplies and materials has gone up, the matching value of wages has not. In our industry, people still expect to pay what they were paying for their hair ten years ago, and the cost of our supplies has dramatically increased. So on top of thinner margins, a lack of supplies for construction, and high construction costs, it takes a lot to open a business right now.
I do feel, however, that women will continue to become founders and that the percentage of funded companies will still rise once we get over this pandemic hump or just become more acclimated to the rising costs of founding a business.
Can you help articulate a few things that can be done as individuals, as a society, or by the government, to help overcome those obstacles?
- We need to raise the minimum wage to match the cost of living. A much more significant percentage of 20 somethings still have to live at home with their parents because they can’t even afford a one-bedroom apartment. That speaks volumes. At my salon company, we have employees that start double and even triple what minimum wage is. We want them to succeed in life and pay their bills. Once more people can get on their feet and make a good wage, they will be more likely to go out on their own to start a company.
- I would love to see the government help more with college and student loan debt. Sending young people out into the workplace with hundreds of thousands of dollars in debt makes it very challenging to want to start your own company one day.
This might be intuitive to you as a woman founder but I think it will be helpful to spell this out. Can you share a few reasons why more women should become founders?
More women should become founders because we need that representation in the workplace. Having more female founders would not only bring more diversity to the workplace, but I think it would bring more hope. Everyone you see in real life around you is an expander and helps expose you to what you can achieve. If you have more females around you in a founder position, it will help to create more of that.
My salon company is about 93% female. I can tell you that these humans are some of the most caring and genuine people that I have ever met, and I can also tell you that I wouldn’t mind seeing 93% of the companies out in the real world being founded by women.
What are the “myths” that you would like to dispel about being a founder? Can you explain what you mean?
There is a huge myth that women do not support other women; therefore, how could we mentor or develop new talent? This myth couldn’t be further from the truth. In my salon company, we have created an innovative system of mentorship. Our more senior (primarily female) employees take on mentees in a six-week program that helps introduce them to our culture and teaches them how to be successful. This program ensures that the employee is growing, thriving, and emotionally happy with the company.
I have always supported the success and advancement of other women, especially in my salon company and industry. I have brought on two current employees to be shareholders in our salon company — encouraging entrepreneurship and helping women achieve their dreams of owning a business. I have also created a plan for more employees to become future shareholders. In addition, we host personal growth retreats for all of our team. We, as women, support each other, and the growth of our salon company is a testament to that.
Is everyone cut out to be a founder? In your opinion, which specific traits increase the likelihood that a person will be a successful founder and what type of person should perhaps seek a “regular job” as an employee? Can you explain what you mean?
I don’t think everyone is cut out to be a founder. And I think that’s okay. I think it’s more important to do what makes you content and happy in life, and for some people, that involves their passion which doesn’t have to include founding a business.
A prominent trait of commonality I see in founders is the ability to execute. We all have 1000 great ideas; the difference between the people who have ideas and founders is that founders actually implement those ideas. That’s the hard part. If you like to be a part of a team that executes a vision, that is a beautiful thing too. Sometimes people don’t want to be the person coming up with and implementing the ideas; they just want to be a part of that process.
When I started out, I could feel it in my bones that I would open a salon one day. There wasn’t a straightforward catalyst that started it. And I can’t put a name on it either. I just knew. And I also knew I would just keep moving in the right direction to make it happen. It took me 10 years after getting my license and doing hair to open my salon company. It didn’t happen overnight. Many people get caught up in hitting a finish line and give up when it doesn’t happen quickly. You have to trust the process and keep hitting small milestones until you reach your goal. That’s the true essence of execution.
Recently I heard that you should launch a project when you’re (only) 80% ready. That phrase has changed my life and my outlook on execution. Don’t wait until the project/idea is perfect because it never will be!
Ok super. Here is the main question of our interview. What are your “5 Things I Wish Someone Told Me Before I Started” and why? (Please share a story or example for each.)
- Your business model doesn’t have to be perfect and will change. Often, what your company is at the beginning evolves into something different. When I first opened my salon company, I had a contractor-based pay model. After a couple of years, I learned that the best way to achieve a profit and a cohesive culture was to switch to an all-employee-based business model with structure. In 2010, I changed my salon company to 100% commission, my brand flourished, and everyone was on the same page.
- You won’t make a profit right away. It took my salon company NINE years to make a profit. Yikes! I remember my banker calling every other day to make sure that deposits were going to come through to cover expenses. It was embarrassing and highly stressful. In 2014, I joined the Summit Salon Business Center and hired a business coach. Since bringing on the consulting group and coach, I have grown Urban Betty’s income, and we’ve made a profit every year.
- Everyone that works for you is not going to be your biggest fan. If you’re a recovering people-pleaser like me, this is going to be a hard one. Sometimes you have to make hard decisions that people don’t like to be more successful. When I brought on a business consultant, we changed our entire company structure; it peeved over half my staff. Our business model was a fixed commission rate with no goals or incentives. Unfortunately, that was part of why we couldn’t grow or turn a profit. If you don’t have numbers, goals, and incentives for your staff, it creates a stagnant culture and income that reflects that.
- Your company needs structure. Like I said above, when I first opened my salon company, I let people come and go when they wanted and set their prices. And I kept that model with employees as well. When I barely broke even the first eight years, I finally hired a consultant group. The first thing we did was change our pricing structure. The results were instant. I went from having an average of negative 2k in the bank to over 50k within three months. We implemented a level system and scheduled monthly personal development meetings with all of our staff. In 3 short years, we added eight chairs to our salon and grew 82%.
- Taking care of yourself isn’t being lazy. When I opened Urban Betty, I worked 27 straight days in a row and then booked myself doing hair six days a week after that. I thought business owners had to sleep, eat, and breathe their company, and I was so wrong! After six months, I started having dizzy spells and panic attacks. I learned that my body is a reflection of my thoughts and stress. I had to take more time off and hire a therapist! It took years to recognize that I was working too much “inside” the company and not on myself. I’m now retired from doing hair, getting regular massages, and seeing a therapist twice a month. My health and my business are both better because of it.
How have you used your success to make the world a better place?
In a world that considers college the only option for success, my salon company empowers women and gives each person who works here the ability to become a future shareholder and grow to have an income well over 100k without a college degree. At Urban Betty, we pay our employees well above the industry average WITH BENEFITS (¼ of the stylists make six figures in my salon, where the industry average is $22k).
I have brought on two current employees to be shareholders in our salon company — encouraging entrepreneurship and helping women achieve their dreams of owning a business. I have also created a plan for more employees to become future shareholders and launched it this fall. Additionally, we host personal growth retreats for our employees and have developed an innovative mentorship system. We want to shatter the glass ceiling and elevate our industry. In that same vein, I created the Urban Betty products to support and empower womankind. We are donating 1% of our profit from our hair care line to support female entrepreneurs. We chose Big Austin because they are a leader in powering self-sustainable small business development by providing financing to women entrepreneurs in Texas. They were the non-profit that gave me my first loan to start my salon company.
The more our product line grows through future product innovations, e-commerce, and wholesale sales, we will donate more money to empower and employ women. We’re starting out with Big Austin, a Texas-based non-profit, and our goals are to evolve into a brand that globally empowers female entrepreneurs through a percentage of sales.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good for the greatest number of people, what would that be? You never know what your idea can trigger.
I would love to inspire a movement of forgiveness. These days, everyone wants to cancel everyone and not have any conversations. Often, if we could sit down with someone (with who we disagree), show empathy, and have a conversation, it would change our perception of their actions.
We are very blessed that some very prominent names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch with, and why? He or she might just see this if we tag them.
I would love to sit down with Michelle Obama. She is such an inspiration to women and exudes supportive, loving energy. I would love to hear her speak about her life experiences.
Thank you for these fantastic insights. We greatly appreciate the time you spent on this!
Female Founders: Chelle Neff of Urban Betty On The Five Things You Need To Thrive and Succeed as a… was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.