Salon Today - February 2009 - (Page 24)

BOARD GAMES plans to add up to three more advisory board members before she leaves. “They serve as my sounding board,” says Charles. “A true board of directors makes the calls on the company, but this is not a publicly traded company. These advisory board members simply bring clarity. I’ve chosen people who are able to understand my industry and help me get through the hurdles I experience. We present our strengths but also our weaknesses, and we ask for suggestions. After hearing every member’s input, our direction becomes clearer.” Charles cites two currently pending decisions regarding the next level of growth that her board is helping her to weigh: Should she franchise salons or sell 50/50 partnerships, and should the company make its beauty products available to other salons? Chreky, too, plans to develop an outsidethe-industry board with her bank president and other business-savvy locals to supplement the counsel she receives from BOA. “I expect the outside board to be visionary and focus on the economy,” she notes. Although Mitchusson observes that being detached from your industry and your business gives outside boards an advantage in objectivity, she also feels the need for industry-centered discussion (see The Onboard Board). Benchmarks and nuances are more meaningful within an industry-speciﬁc board, agrees Zona. “If my rent is at seven percent, my industry board tells me how that compares with other salons,” he says. “And when these really smart people who have been very successful in my industry are nodding as I’m talking about my business, I know that I’m on the right track.” >THE ONBOARD BOARD At The Face and The Body Spa in St. Louis, owner Peggy Mitchusson was meeting two to three times a year with an advisory board primarily consisting of clients with business backgrounds. Then about six years ago, she looked around at the presenters at those meetings and saw a management team that could take over the board role. Mitchusson made a strategic decision to replace her advisory board with her own executive team. “Outside people could be objective, and everything they said was pertinent,” Mitchusson says. “But we spent so much time explaining things, catching them up. Having an inside group means that the board members are all industry experts and know exactly what’s going on at the salon.” With 11 members, Mitchusson’s inside board is three to ﬁve participants larger than her previous board. Currently sitting on her board are the salon’s: Owner (Mitchusson) Chief ﬁnancial ofﬁcer (CFO) Marketing director Three location general managers Three location customer service managers Purchasing director Director of development/corporate sales Whereas Mitchusson paid her outside board $500 per meeting (or $750 if they preferred to take their payment in spa gift certiﬁcates), attendance at monthly board meetings are included in her management team’s job descriptions. But the bigger beneﬁt is that this arrangement has enabled Mitchusson to move toward an Employee Stock Ownership Plan and continue to help her business grow rather than sell her business in order to retire. The Win-Win Strategy of the Game Peggy Mitchusson, owner of The Face and The Body Spa in St. Louis, discovered an instant outside-the-industry advisory board when she joined her local chapter of the Women Presidents’ Organization (WPO). Open to female owners of businesses with revenues of $2 million or more, the chapter holds three-hour monthly meetings for its 15 members to present case studies in a specific format, followed by a question-and-answer period. “We go around the room, and everyone can offer solutions to the issue,” explains Mitchusson, who estimates that roughly once a year she’s the case study presenter. “The advice must come from personal experience of having dealt with the problem; we do not simply offer opinions. Often you get your answer just by carefully outlining the problem.” Like other outside boards, the WPO chapter requires members to sign a conﬁdentiality agreement, and Mitchusson represents the only spa business. “We have an attorney, a CPA, an owner of an interior design company, a computer programmer, a banker,” says Mitchusson. “It’s very diverse.” Without BOA, Rash says she never would have thought to launch a training salon concept, which has emerged as both a ﬁnancial and branding bonus. Chreky’s reliance on BOA paid off when she asked the board to review a marketing plan she and her team were ready to implement. “If they hadn’t done an analysis of the campaign, we would have gone ahead with unwise wording, and it would have been terrible!” she says. “A board like this provides checks and balances to your business so you know where you’re heading.” Zona credits his boards with elevating him to a heightened understanding of sophisticated ﬁnancial matters. To present to his out-of-industry board, he produces his own annual report. “A lot of people would say that they can’t be bothered creating an annual report,” Zona notes. “But people say they can’t be bothered going to the gym, either. For me, producing this report is very useful. I don’t make it fancy or hire a graphic artist to do the cover, but it’s helpful to go through the process each year.” As a side beneﬁt, board members sharpen their presentation techniques, improve their 24 | February 2009 www.salontoday.com http://www.salontoday.com

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Salon Today - February 2009 Contents Editor's Note Reception Spa Menu Decor Inside Look Custom Color Board Games Where's My Exit? Products Owner to Owner

Salon Today - February 2009

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