Our podcast guest this week is a former CPA and has owned multiple salons internationally. He is recognized as a trusted financial expert and leader in the beauty and wellness business. He is a board member for Beauty Changes Lives, and is the founder of Qnity for Salons, Qnity for Schools, and Qnity Institute. He is known for his talent for simplifying finance and money matters, making them visual and approachable for creative professionals. His latest study with the Qnity Institute is very revealing, and we’re going to get into it right now with Tom Kuhn.
While Tom was a CPA, he gravitated towards working with the creative industries, such as art dealers and art agencies. Later he became a CFO in a distribution company and discovered a love for educating his clients in finance.
- Tom was frustrated with the lack of financial data in the beauty industry, especially with earnings, so he founded the Qnity Institute to get to the bottom of it.
- That flagship study revealed that 24% of the respondents would have made over $100,000 if they had worked 40 hours a week, and that the average income was $38/hr
- Get the complete info here: “Compensation Study: A Career in Pro Beauty“
Chris Baran 0:00
How great would it be to get up close and personal with the beauty industry heroes? We love and admire and to ask them, How did you learn to do what you do? I’m Chris Baran, a hairstylist and educator for 40 plus years. And I’m inviting all our heroes to chat and share the secrets of their success.
Well, welcome to one more episode of head cases. Now I’m going to just a spoiler alert here. A lot of times we have people that are on that are icons in the industry, hair heroes on the industry. And this person is one as well in my mind, but for different reasons. And that is because of the finance that we have in our business. And I’m using the word finance in the term of our and this is a spoiler alert. In our industry, we have a reputation of being low income earners, which we all know is not true. But this is something that has been perpetuated by government, other agencies, etc. And we finally have a gentleman on here who has collected proper data. And the data is about what the potential is that we have in our industry. And so I want to give you that, but this is something that I tell you, that is a must listen to. So, but before we do that, I think it’s really I want to give some of the creds that this person has before we start off so that you can understand what kind of credit he has for him and that he is he can back up the things he said he’s been a guest professor at the Entrepreneurship Center at the University mass of Boston. He’s worked with Merrill Merrill VOA and JP Morgan Chase. He has been the founder of 2 to 10 project. He has been a board member for the beauty changes lives he’s founder of Qnity for salons, Qnity for schools and Qnity Institute. He has worked globally in as an owner or and chief level roles for salons, distribution, retail and manufacturing. He is as based on all that creative and educator, a program designer and a whole brain thinker, and is known for making finance and money matters simple, visual and approachable for creative professionals. He’s a trusted financial expert and leader in the beauty and wellness industry. And he’s been an advisor to some of the top beauty companies that we have in our industry. So let’s get get into this week’s head case. Mr. Tom Kuhn. The study was performed by the Qnity Institute whose purpose is to create economic empowerment through actionable data and financial literacy. The study was designed as a long term effort to provide greater clarity on communications in the professional beauty industry, and should not be viewed as the only point of reference. The findings and data points are subject to evolve as outreach expands, and as additional segments of the workforce are added to the data collection process. This study does not imply a promise or guarantee of wages or benefits for those considering a career in pro beauty referred to full disclosures and disclaimers in the report to get more information or to access the full report go to Qnityinc.com/proBeauty-compensation-study Mr. Kuhn, or as I can, hopefully I can call you as Tom because I, we had a little meeting before and I feel that we got good friends right off the start, I really feel that I feel your energy. And I love it. And I just want to say first off, Hey, welcome to head cases.
Tom Kuhn 3:59
Well, Chris, thanks for having me as a guest, I have to acknowledge you and give you a shout out. Thanks to you. Thanks for having me part of this, and congratulations on all the work and the impact that you’re doing my friend. And I think we can start using the word friend because I felt an instant
Chris Baran 4:14
you know what 100% And you know, but I just want to give first of all, just to give everybody a little heads up, I know I did it in the intro. But again, I want people to really know and understand who you are. And you know, so I’m gonna give it another little heads up. I think this is like state of our industry and where we’re at right now and why I just felt it was so, so important to have you on this so that all the people watching and listening, that are in our business can really understand the true facts of what’s going on with finance and with earning power, etc. In our industry. And I know that you are just one of the leading resources in that and actually have done studies on it and that’s why I want this today about fact so people have this armed with this more than anything else but before We’d jump into that because, you know, listen, I know that we’re with hairdressers. And I know we have even in my family, we have this saying, between my wife and I, and I always say, if it’s got a number, you give it to my wife, because she’d handles all of that stuff. It’s got a picture you give it to me. And I know there’s a lot of people out there that are going to be talking about, you know, their, their picture people like I am. But I think it’s it’s critical, absolutely critical, where we are particularly what’s going on, and what the government’s view of hairdressers are, how we deal with numbers, etc. So but first, give us give us a little bit of background like, how did you how did you get into the industry? So tell us background, who were you are, what you came out of college with? And how does that How did that end up relating to our business?
Tom Kuhn 5:47
Yeah, thanks. I, of course, we all love to tell our story. Thanks for the invitation. So I would I was a reluctant CPA, and a little bit of story. So I grew up in Chicago area, big family and pretty much supported myself through high school and college and all that. And I find myself I found myself in college, halfway through. And I hadn’t declared a major yet, they didn’t know what I wanted to do. So anyway, I did the logical thing, someone did just quit. I didn’t quit, I did not quit at all. I took an intentional, I like that
Chris Baran 6:23
terminology and move
Speaker 1 6:26
in, that really was the intent and did something radical want to move out to Eugene, Oregon, which had the highest unemployment rate in the country at the time. And so I came back so doggone motivated. And so hungry, because I had seen what it was like now I had grown up building swimming pools and loading trucks and all that stuff. But it really led me to say, You know what, I want to be in a trade. I want to be in a trade. So I declared accounting as a major, and really worked very hard at it got good grades, and all of that, and really buckled down. But I got done with the accounting degree and said, I don’t want to be an accountant, I’m sorry, accounting to me, it was going to be a pre law degree. I did not want to be an accountant. But I decided that you know what, I’d rather be an accountant, and then have three years of law school. So anyway, I really wasn’t someone that was particularly, I was interested in numbers, but I mean, it really wasn’t a math guy at all. And it really was a fear of math actually, that kept me from going in the profession that I wanted, which was architecture. I literally was told by some guys that were architects, they sort of killed my dream. I’m glad they did at this point, said if you want to be an architect, you got to take all the math classes calculus, no, I said no way, you know, but I found myself in college. And I found I found myself a graduate degree in accounting. And while as a CPA, I really gravitated towards the creative industries, Chris, I always look for the projects, and no one else wanted them at agencies, art dealers, and ultimately after work in 13 years as a CPA, which was about 26,000 hours of working primarily with small businesses on taxes, accounting, advisory service, banks, loans, I mean, so I had that grounded period of 13 years of my life, then that’s what I did. Then I left public accounting and joined distribution, the beauty industry, where I became a CFO, I worked in distribution, and then for a while and then left, because I was spending a lot of time in distribution, educating our salon customers on the money aspect and really fell in love with education, fell in love with being part of an industry that really appreciated you know, good intention. I think that many that were teaching finance to really had felt that they had been talked down to shamed or whatever. And I love the idea of communicating numbers in a way that was simple and visual. You know, and then then what happened is, in distribution, I left and became a consultant. Ultimately, that led to me becoming the co owner and president of the Giuliani much about them. Yeah, which was about a 20 plus million dollar business at the time, eight locations. And that’s where I really developed a true heart for the hairstylist and helping them understand money and numbers. And after I sold my ownership and I moved on, and then it became an artist which to me was necessary part of my life because I always felt that people always pigeonhole me as an accountant. And I wanted to demonstrate that I do indeed have a right right brain and that does impulse. And that, that led me to learning, graphic design and all these other things. And so ultimately, to try to get to the end of the story here, I know it’s getting too long the story, I founded this, founded this company called Qnity, QNITY. And I think it was 2009. And, and essentially, the mission is to a couple basic beliefs. Number one is that you can make great money, do it to love and have a quality of life. They’re not mutually exclusive, key word is and great money and do what you love and have great quality life. That was a big principle, you know, and I learned that, you know, money isn’t the most important thing in life, but it is like oxygen on the gotta have it scale. And, you know, so just, it’s been a career, the majority of my career has been spent in the professional beauty industry, we have done work with like Merrill Lynch, and Bank of America and some fortune 500 companies, but our heart, the heart and soul of what we do is in the professional beauty industry, working primarily with small businesses, many cases, micro businesses, to help them become more prosperous in their business.
Chris Baran 11:29
So first of all, I take my hat off to and I, you know, I think that there’s always this, this thing that that plagues our industry, mean hairdressing, that you can’t make big numbers. And there’s thing that I think that plagues, the CPA numbers industry, that you’re not creative. And I and, and I can’t remember the name of the book, I think it was called Seven Ways of Knowing. And is to understand that that one part of creativity is in numbers. It’s the ability to how you can use numbers to get to the things you want. So I, you know, for those people listening just because you hear somebody is numbers, that there’s amazing people out there that are that are do numbers, and they are super creative. And I’m so impressed that you said I’m going to still show people that it’s there’s something about this creative thing that I have in my side that really does turn up and pulse. Okay, so I think now, like everybody’s got a think, can you give us just a little bit I know, you gave us kind of a guideline, I loved what you said on there that it was, number one is that you can make great money. And I wrote a nice big heart down there that you can that you can enjoy what you’re doing, and you can still have quality and what you do as well. The what, I want to talk about community Institute just for a second, so give us a bit of what is what is community Institute? And again, how did that how did that relate to what turned me on to actually wanting you on this on this podcast was about the data. And I think that’s something that he was hairdressers. We’re just we’re emotional folks. We love what we do. We love being creative. But it’s when you really get down to it. If we really want to have quality in our lives, we have to have data. We have to, that’s where we make our decisions. So tell us a little bit more about the community Institute.
Speaker 1 13:21
Yeah, the community Institute started very organically. And there was not an intention. This isn’t like we did a business plan or any of that. It happened very organically, very grassroots. And essentially, it really was born out of a huge frustration that all of us have, myself included. And that is really the lack of data and lack of data, not lack of data from sort of this, you know, high level, whatever, but just on a very pragmatic basis, like lack of data about earnings in the beauty industry. And it’s just bugged me for 20 years. And the stereotype, the stereotype about earnings in the professional beauty industry. So the community Institute was founded very organically, through some initial sort of beta studies. We didn’t even call them a beta study, it just happened. It was like 14 locations. It was designed to say, Okay, how much do your employees actually make based upon the W2’s? And do they understand it? I mean, do they really understand? And the universal response was no, most, most don’t understand how much they’re making, and the majority, vastly underestimate the amount they make. Making decisions that were really based upon. Stories and not facts. So, so the Qnity Institute, you know, it’s funny, Chris, where you start out in your career and the businesses you create is you never know where you end up. And I think that the cuter the institute was born out of just massive frustration. So essentially, the Qnity Institute is really founded on the principle that of economic empowerment, and economic empowerment coming through actionable data, and financial literacy. And said economic empowerment. actionable data means data, some data that’s useful to people. And so, so that was in the birth of the Kuhn Institute was amazing last year, it’s amazing and 20, you know, and
Chris Baran 15:31
I’m just first seconds going, where the hell were you when I started out, you know, where was this information when I started off like 50 Some years ago, and I’m, I just want to just give a little add on to that where, yesterday, I was on a on a webinar with a bunch of other while I’m not a bunch of other means that I was a great in the industry, but there was some industry greats around there. And we’re all talking about was meant is towards especially towards students and teachers that were teaching in, in, in cosmetology schools etc. And, and the one thing that came out of there was just that is that I noticed that there’s so many kids that are out there, and they just don’t have that financial empowerment, and they get out there and they’re flailing and they don’t understand the potential that they actually have, especially and this would kind of lead me into kind of the thing that you know, I even wrote down on my notes, the thing that’s going note is gonna put a bee in my bonnet, but I’m gonna say it like it isn’t just really pisses me off, is that when, when our number one how our industry is perceived financially, as low income, that we work long hours, and your and a little time off, and I’m actually taking those from those words actually took from your report, I didn’t have the wherewithal to make that up on my own. But I want to talk to just about the government skewed. I don’t know what to call it algorithm, whatever they did to figure out what an average hairdresser makes. And they put those numbers out there. And if if it gives, I know I’m a part of beauty schools as well. And I know when a when a parent brings their kid and then there there, the child has browbeat them. I want to go to hairdressing school I want that’s what I’ve always wanted to do. And they take them into beauty school, and they go up and they research a number. And they’ll say that they only that they only made $27,000, or whatever it is that the government says, and we know that’s not true. So can you talk to me talk to us just a little about what your findings were? What’s your opinion and blah, blah, blah, anything after that? That’s what I’m really interested in here.
Tom Kuhn 17:35
Yeah, I, I, you know, piss off is a word that yeah, let’s let’s build on it pisses me off to this has me off that when somebody when someone really wants to understand earnings in the professional beauty industry, they’re going to google it, of course, they’re going to go to the Bureau of Labor Statistics. And it’s going to show like $17.30 an hour as an average. And then the and I’m looking at some of my notes here, in terms of the actual facts and figures here. And then the Department of Education, as analyzed by an organization called the century Foundation, says $16,600, after two to three years in the industry, and been in the industry, as long as I have and see having access to as much data as I’ve had in the last 20 years. It’s just not right. And so what I learned, Chris, is that listen, I we we began these studies very organically, I had no intention to be involved in any political related or government discussions that happened organically. But what I did learn is that the the methods of gathering the data, even by the Bureau of Labor Statistics is remarkably faulty. And in fact, we even had Myra Reedy, who is a part of the Professional Beauty Association. She’s in charge of Government Relations. She actually is on record, as and she’s been to the Bureau of Labor Statistics. She’s been there she sits and meets with them in Washington, DC. And she said, This is my reading. This is the most accurate. This is the most detailed and accurate data I’ve seen keeping it simple. The W two is what everybody should have been doing. This is more information collected than what I’ve seen from the Bureau of Labor and
Chris Baran 19:30
destroyed it. Yeah, and before I’d want to lose that track, but you and I had a conversation just the other day and you brought this up to me and my blood started to boil. And I want you to just tell everybody about what actually century is really about.
Speaker 1 19:51
Well, there’s there’s various different organizations that are public research firms and the Century Foundation, which is a very reputable organization, you know, does studies and they’re extremely well funded, very well funded. And that particular organization has a thing for cosmetology and has issued several reports on cosmetology earnings and have a lot of the reason for the century foundation attacking cosmetology has to do with schools. And you know, and some of its warranted, it’s holding accountability for schools that receive government funding, I get it. But the statements that they make around earnings are just blatantly inaccurate and flawed. And so, and the Century Foundation has has $50 million sitting there in cash right now ready for more studies. And so here we are Qnity, a boutique data firm, you know, really, really trying to be agile enough to come in and say, Wait a minute, there’s some other points of reference here. And so the first time we did this, it was really organic. I mean, we just did it as a very small team. And then we did multiple phases, we got to the third phase, which is where we started to get a little funding, because we did all the funding for this Qnity did. And so we started adding some muscle to the team. I put together a think tank, which had several PhDs, brought in some great analysts, brought in a project manager and said, If we’re going to really do this, we have to do this of the utmost quality. First of all, we had already dealt with all the data security and all that stuff. But so some of these organizations are really painted a picture of the professional beauty industry, that that we should have a motion around. Yeah, because it just in many cases, it just lacks integrity, because it doesn’t really tell the full story. Yes, it’s true that some people in the beauty industry don’t make a lot of money. Well, that’s true. With CPAs. That’s true a tax practitioners, you know, somebody working at an h&r block, if you were to say the entire using like CPAs as an analogy or tax accounting, if you were to say, okay, here is an industry and they make X amount hours, and it was really for like, you know, you know, small tax shops like an h&r block, h&r block that wouldn’t tell a full story about a counting industry.
Chris Baran 22:46
Yeah, and not to your point, because we, you know, we did say that, they were saying that there was bad actors that were out there in the beauty industry and in schools. And there are some, but you know, you can’t paint everybody that’s out there. There’s amazing schools out there that are doing phenomenal jobs, helping our future individuals and our future salon professionals being being incredible at what they do, and teaching financial literacy with part of what you do as well. So that’s what I think putting the bee in my bonnet. And what Bob century was that you’re just making these in your reporting to the government just on these things that are actually inaccurate? So what are some of the things that you found in there? What can you tell us about the in your findings? That’s different than what the government’s findings actually were? So can you walk us through those numbers and tell us how that worked? What what what’s the How did you come up with the process of what those numbers actually were versus what the government talked about?
Speaker 1 23:44
Yeah, absolutely. First of all, we will keep the I’ll keep the methodology, it’s simple. Essentially, what we did is we reached out to employee based salons, which is where we started. So businesses that had employees with W2’s, and we made a very simple statement, and that is that, you know, let’s collect information that was submitted to the government that we know is verifiable because it was used in the W 2. We didn’t see any names of any employees, no personal identifiable information, and just had it was 330 locations, and about 3000 W tattoos that we collected over a period of time. And we did is we also we collected earnings, just what was unlike box, one, two and eight on the W 2. Then we also collected hours worked and length of service. So pay hours worked, how long you’ve been working at the company. From that we were able to come up with things that normalized earnings by coming up with like an average rate per hour. Somebody makes $50,000 A year, and you know, they work 2000 hours a year, it’s $25 an hour. So we just we could make that computation. And what we found? Well, a couple different things here, just in the interest of full disclosure, and this is really well disclosed, we knew we weren’t representing the entire industry. But we also knew we had to start somewhere. And so we started on businesses, you know, small community based salons, your neighborhood salon, one to 10 locations across the country. So
Chris Baran 25:32
you’re not saying you just went after all the high end salons, and got the highest figures that you can awesomely get, you
Speaker 1 25:40
know, and in fact, something that’s interesting, we really, this is not skewed by like New York City, LA, you know, other other large markets, some, in fact, the highest earner we’re heading this study wasn’t even from one of the big major cities. But we found alarmingly different information that’s published. What we found is that the average W2 was $54,000 per year 54.
Chris Baran 26:12
And that was, and that’s based on. I mean, that’s based on numbers that they got. So in other words, give us a little more on that. How did that come up? That was out on a 40 hour workweek if they worked a 40 hour workweek, or what was that? Let
Tom Kuhn 26:26
me get to that one. Let me get to that one. So when someone gets a W two, there’s no information about how many hours they worked. You know, it’s just that sort of report to the government. And part of the flaw is that people are not considering hours when they look at W two. So here’s the other thing we found, we found the average w two was 54,000 307. But here’s the kicker, the average hours worked was 27. Point, hold on here. 27.8. So
Chris Baran 26:59
you’re saying they’re not working a 40 hour workweek that’s 27. And it’s, they work 27 point, whatever, hours, not a 40 hours, so 13 hours less a week. And they still when you when you brought out their W two was was 54 G’s.
Tom Kuhn 27:18
Now if you look at an average hourly rate, you take do the math 54,000 divided by about 28 hours, it was $38.37 cent, which is very different than $7.30.
Chris Baran 27:32
And so other trade, and that’s that’s comparable to other trades that are out there that are working that and depending on so what and this is an average, this is an average not just have of high end people that have been added for 20 years. It’s also the people on average based on people have been at it for what one two years, but also give us what was that like? Was it just a full across the board?
Tom Kuhn 27:55
Yeah, it was full across the board. So we wanted to make sure someone that had at least a one year length of service, you know, that they at least had, you know, one year and and so here’s the here’s the other thing that’s worth noting, the Bureau of Labor Statistics bases their reports on a 40 hour week. So when we if we were to analyze this, what we would find is the average w two would have been $79,807. If somebody chose to work 40 hours a week, wow. Now, here’s today. Now, we also said that compensation isn’t just a paycheck. And so we measured other areas of compensation, including benefits. And we found that 96 Now let’s be clear benefits is not just health insurance, you know, benefits is paid time off. It’s can be dental insurance, it’s paid sick time 401k, employee assistance programs, etc. We found that 96% of these businesses offered
Chris Baran 29:09
in some way, shape or form.
Tom Kuhn 29:13
Wow, yeah. Also, if you go to the Bureau of Labor Statistics and inquire about the field of cosmetology, it says that there’s no on the job training. 90% of the businesses in the study offered new hire training, and 83% of these businesses contribute to the cost of education outside education. 67% offer education reimbursement allowances. So here we got an industry were working 28 hours a week on average $54,000 the ability for flexible schedule the ability to have benefits, ongoing education. And then we continue to measure other things such as career path, and return on investment from from student loans. And so we went deeper into beyond just the earnings piece. But I think there’s some other interesting things in the earnings. Just stay there in another minute. We also found that I squarehead, all this stuff in the memory, which is pretty ridiculous. But it’s been sitting on my shelf for I don’t know how many months I’ve called it. So I don’t have all this memorized some of it, I still do. But let me give you this one. We found that 24% of respondents 24% of the 3300 W twos would have made over $100,000, if they work 40 hours a week. That’s almost that’s almost a sorter would be six figures, if they were to
Chris Baran 31:07
add one to you that I’ve talked about this a number of times, here, and I’m gonna be openly candid about this to anybody that’s listening to this, what you need to do is you need to get this podcast out to the schools, you need to get it to people that if you’ve got somebody interested in our industry, and you need to get this to those kids so that they can show it to their parents. You know, and I want to give you one other thing we have a really good friend is His name is Daniel Mason Jones. He has a young kid that’s working for him. And I might mess up the hours here. And I can’t remember if that she works 18 hours a week or 27 hours a week. But in that timeframe, not prorated, she does over $100,000 a year. And I’m not talking that that’s what she brings in. That’s what she earns. You know, so you think about those kids when they you know if if and I’m going to go off maybe on a tangent here, and you tell me if we need to, I’d like to still stay back on the numbers. But the other part that really upsets me in our industry is that is part of the government is getting from those figures that people that are cheating on their taxes. Now, let me be clear, I don’t like paying my tax. I like paying taxes. I don’t like I don’t want to pay any more than I have to. And I’ve been known to complain about the stuff that I do have to pay for. However, is that when can you give us a little about what does that do to our industry? When people under report or don’t report their income? What does that do for the sake of our industry?
Tom Kuhn 32:52
Well, I think you in a very short sentence or two allows me to describe a very important difference that fuels the area of taxation. And I’m you know, I am no longer a CPA. I’m not a tax practitioner. And the other qualifier I’m gonna have I’m gonna get this one out. When to let me stay with tax here. Okay. With tax. There’s a distinction between tax avoidance and tax evasion, evasion. Tax avoidance is deemed to be prudent, and something that everybody should have the right to do is to within the confines of the law, avoid taxes. Yeah, tax evasion, is the willful neglect and of evading taxes. There’s a distinction there. So the few different things about the state of taxation today, there are changes going on. One is that Venmo, or a tax law has changed so that if someone is paying someone with Venmo, you have to start giving them a 1099. There’s also 87,000, new tax, IRS employees. And so tax compliance is going to become much more of a hot button. And this is something that that that causes me a lot of angst and that’s tax evasion in the industry and willful Pete I have somebody that we all know that he lost a couple people and they literally just looked at him in the eye says well, why should I work here what I have to pay taxes, when if I go on my own I don’t have to pay tax. And so now, let’s might as well segue into this subject of tax as it relates to our study. Because the the 38 data dollars an hour that we came up with as an average is we made we made no adjustment for any potential underreporting of income. We just assumed that, hey, that it was on the W two. But we know that’s not the case. Let’s just say tax under reporting was off by. Well, here we go. If, if we assumed you know that a certain percent that the tax undeployed was eight to 10%, the numbers would go up to well, they go up to over 40 to over almost 4041 and a half dollars an hour. So are $38 Number $38. An hour number is very conservative. And it’s most likely much higher than that.
Chris Baran 35:56
This episode is sponsored by the salon associate accelerator from trainers playbook.com. Are you struggling with the time and cost of associate training? Do you feel like your salon is running you will get your associates on the floor, all with 90% Less time from you. So you can get back to building your business. Get them world class design, finishing color, and client care skills they’ll use every day for the rest of their career. While you focus on realizing your vision, go to trainers playbook.com and get the salon associate accelerator. And now back to the show. Yeah, that’s, that’s really interesting. And so, like, I also think that if you think about how, the way that we get house loans and home loans and, and our credit rating, etc, goes by what we report as well. And, and when when the when the government comes up with $27,000 a year because people are under reporting. That means I can I’ll never forget this. When I believe it or not I at one time had did some courses on business. And and I I was one I didn’t know a whole lot about business and what that meant for and I went to going to my my banker who will help to me to get the money for my my salons. And I went to him and I just said like I’ve heard that. That about hairdressers, why is it that hairdressers have such a hard time getting a loan? And he said Well, number one, he said is because they’re there, they’re a big risk, because the money that they report is lower than what we would normally loan on number one. And he said that for what they report we see it as a high, what was the words he used a higher labor to money ratio. In other words, you got to work three times as hard to get the money because they weren’t reporting. And that affects our not only them individually, but it affects our industry. So now when hairdressers go as you could try to go to get any money from anything, you have a harder time just because of the label that goes along with it as a low cost low income profession. So like you said, and I saying to everybody, please do not that we’re not saying go out and report and overpay on your taxes, but stay within your limit and make sure you pay accordingly. Making sure you get as many deductions as you possibly can and you’ll have a better life. And hairdressers will have a better life you can sleep at night and all hairdressers out there will have true facts on on what our industry is really about. So I just that’s your reporting on there. Just once I read that I just went this is really really good stuff. So what else can you what else can you tell us about on this based on your on your your studies? What are other things that really jumped out on for you on this study?
Tom Kuhn 39:02
I think the scheduling flexibility was a big one. And you know, the the narrative out there being you know, low income very little time off, you know, overworked and it really paints a picture of a very confined environment, which is not the case. And 94% of companies. No here. Let’s see here. It was, um, here we go. 99% of companies offered sum or total schedule flexibility. Other industries, wow. 54% and 19% of employers offered complete total schedule flexibility. And so it’s a tremendous industry. If that are for those that that quality life is important, maybe it is raising, raising a family, starting a family, or being sort of at the end of your career where you want to slow down. It’s really the amount of schedule flexibility is something that needs to be highlighted. You
Chris Baran 40:21
know, you brought up a really good point there, Tom, is that cuz, you know, I’m sure that anybody listening goes, Wow, it’s very young voice. But no, it’s not anybody that’s watching can see that I’ve, I’ve got this grisly gray beard and gray hair, etc. And I’ve been around a number and it’s not too hard to figure out that I’m a baby boomer and baby boomers just wanted to work if you said you could work 40 We’d say I want to work 60. So but the reality is, that’s not what that’s not what the average people want nowadays, is it they that nowadays people want that. But if you’re a smart business owner, then you’ve still got chairs. If somebody’s not working, you’ve got an open station. And you can still don’t you can, you can work longer hours, have people working shorter hours for their balance that they want, and just have other people that are coming in to work in your salon. Right. So I think that there’s a way that even salon owners can make more money out of this. And I’ve got to write down a note because I know the one the question the objection they got coming in their brain right now. So can we how do you see that? What’s your Can you elaborate on what we were talking about there?
Tom Kuhn 41:33
You mean, in terms of the still work flexibility? Yeah.
Chris Baran 41:39
How does that work to the advantage of the owner? You know, like the owner of business, who might be like me, baby boomer said, No, you got to work 40 hours a week, and then they work 40 hours a week, and you got a chair sitting there?
Tom Kuhn 41:52
Yeah, there’s definitely been some generational angst around that. And you see it very often within a business where you might have a more seasoned hairdresser that is a baby boomer, they really have a hard time understanding, you know, current generation and their desire for schedule flexibility, you know, and, you know, it’s just the reality of the marketplace. Flexibility, in most cases, is a higher priority than actual pay, you know, and having control your schedule and being able to have a quality of life. It’s just the marketplace these days,
Chris Baran 42:27
I’ll never forget when this is what I’m going to bring up. He was a mentor of mine, mine, Bill Ross. This is out of Saskatoon, Saskatchewan. I was this young kid working my way up the ranks and my my, my rates went up and I was booking more etc. And then I said I wanted to go on my own Long story short, we were gonna go into business together. And he said, No, you’re better on your own. And he helped me along the way. Love that man loved it loved he and Selma. And I remember the one time he came in, and he said to me, he phoned me up. And he said, Chris, he said, you want to go because he and I always went to we were, he was the boss, but we were also friends. And which is sometimes highly unusual. But he said, want to go for coffee. I said, Absolutely. Bill anytime, because we always had great conversations. And, and, and we went out for coffee. And he said, Chris, I just want to thank you. And he said, I went I got all puffy and I was going up for what what did I do? That was so great. And he said, I want to thank you for quitting. And when let? And he said yeah, he says that. Because he had put my rate up a lot. And he was paying me a lot of commission, etc. And he said, Yeah, I just I just hired on three more people. And I’m making I’m making twice as much money as I was when I was paying you. And I went well, that’s kind of the most left handed compliment I think I’ve ever received, ever received. But my point is, if business people are also really thinking about right now that you have all of these people that are out there that want work, but they want life balance, they don’t want to work as many hours. And just if you could the way that you book them in you can still make and I’m not saying I’m not saying this to sound like I’m a an incredible businessman, because I know that there’s people out there that are doing that right now, but I’m saying for the people that are out there like myself that get get rigid about here’s what my business has to be, because that’s what it was 20 years ago, they’re gonna get antiquated and die because that we’ve got to adjust and with the time and what people want make work for them.
Tom Kuhn 44:36
Yeah, I totally agree and those that have not been agile, and been slow to react to the marketplace, you know, it’s one thing to stand up for quality. It’s one thing to stand up for, you know, whatever standards you have. But on the other hand, you know, staying relevant means staying in touch with the current workforce, you know, and you know, other things Is that came out of the study is that 94% of these businesses, we’re hiring, you know, and, you know, we have an industry where, where many are not encouraged to come into the industry, yet, there’s an opportunity to make very good money, of which to a great degree you control, which could definitely be six figures, have schedule flexibility, you know, have benefits, have training, have career path, have high return on investment, and but that’s not the story being told, the story being told is that this is a career that has poverty level earnings. And so, you know, and the other thing that came out of the study was entrepreneurship 70 76% of the owners are cosmetology graduates, so the number of career paths and look at the career that you’ve had phenomenal career. You know, I came in through the, through the backdoor, you know, I’m not, I’m not, I’ve never been a licensed service provider I’ve been, but I’ve been very welcomed by the industry. And, and I appreciate that. And it’s been a great career for me. And the thing, the thing that you can’t quantify, but we actually had, we actually broke compensation down the eight areas. And our final area was passion. And we have no metrics around that one, you know, we have seven out of the eight numbers, seven, out of the eight career factors, we had numbers around that we had passion. And, you know, that’s, that can’t be quantified. And economic empowerment is really about making sure that people have actionable information, and financial literacy, so that they can make, you know, career decisions for them, their family, and their stakeholders. And at the, in a world where, you know, touch is becoming less and less removed. I’m actually very optimistic about the beauty industry, I’m optimistic about the beauty is true, because it really, in an era where the word artificial is being celebrated. I don’t, you know, this is the last, it’ll be the last human centered industry by definition,
Chris Baran 47:33
and you know,
Tom Kuhn 47:36
and in the trades, the trades are where it’s at right now, a lot of a lot of careers that require a four year degree is, you know, those, those, many of those fields are going to disappear. But you want to make money today, be a plumber, be an electrician, you know, be go into a field that doesn’t require a four year degree. So return on investment, is also something that many don’t see in, you know, a very short amount of time to become licensed. A short amount of time to sort of, you know, learn the ropes, and you can start making an income, why someone’s still in college.
Chris Baran 48:21
And you know, is to that point, there’s, there’s this also this reputation I’ve heard, I’ve heard stories about this, I don’t know anybody that has ever done that. But I have heard that somebody at some kids will get in their business, they’ll go through the course, just like lackadaisical, get into a salon. They don’t they don’t try to improve themselves. And after a year, they’re still making that pittance wages that they were making before. And I’ve heard this said is that some people I’ve heard some people say that they quit saying, why would I want to work continue working for this, when I can go to McDonald’s start off at at this wage. And now I want to be clear that I’m not I will eat their food. Yes, some people call it junk, but I still like it. I don’t know anything about their business practices. But I will tell you, in my mind, if you’re there as a laborer, and you’re there, because instead of making what you thought was $17 an hour at $20 an hour, that’s all you’re going to be making for the next five years. Whereas in our industry, and I’ve said this many times, I’m gonna say it again, for those of you who heard me say it, you don’t have to tune out I just want you to write it down. If you haven’t written that already, is when people ask me what you can make in our industry and I’ll say exactly what you deserve. So if you’re going to put in time and to me, everything in our industry is about what we always call a learning to earning curve. So you’re like imagine that first year what you’re just learning out maybe your wage stays level for a little bit. And the more you’re more you earn Learn that all of a sudden that curve starts to happen. And you’re, you’re learning more than you’re earning a little bit more, you’re learning even more, you learn even a bit more. And finally, something hits with you, and it goes through the roof. And I know that’s what happened to me is at the very beginning, believe me, I started off in the industry, I was my take home pay was $189 a month, my rent was 90. But I have to have the determination just to say I’m not going to, I’m going to do whatever it takes, so that I can be great at what I do love what I do. And because I love what you said about passion, about about being able to do something that you absolutely love, but make the money that you absolutely deserve. And so my thing that I would tell every young kid that’s out there, or even if you’re, if you’re just hanging about it today, it ties together, you don’t learn without education. And and if you’re in school, you got to get that foundational stuff, you got it. And the faster that you can get out and learn more. So it couples with what your foundation you got in school. That’s what propels you into these greater figures. So you always have to know that the more that you earn, and the more that you learn, the more that you’re going to earn as this moves along. So you know, this has been incredible insight in there. And I just take my hat off to you on all this is are there any other things and we we still got a little bit of time left. And I just want to see if there was anything else that you came out of your study that you just found. That was impactful, something that we need to hear.
Tom Kuhn 51:37
I, I relate well, there’s there’s a founding story, not a founding story, but just something that really kind of woke us up that caused us to continue our work in the study. And it was it was a phone call I got it was May of 2022. I was up in Europe at a wedding. And it was a text and a guy really wanted to talk to me and he was a master hairstylist and worked for a family member. And I still call you right when I get get back home. So I call him back and his name is his name. His Sudha will call him Adam. Okay, that’s not his real name. He said, Tom, I’m having money issues. And he said I’m not making enough money. And I said, okay, and he said, and I don’t know how to have this conversation with so and so was a family member that he worked for. And and then he revealed that his wife was with him in the car. And so we were on speaker and I said okay, so well, how much do you make? Well, they’ve never really done the math. All right. So I started doing the math. And after about three minutes of getting the numbers from them, they did a little quick check. And I said, Okay, so, Adam, I want you to know that you’re making approximately $147,000 a year. And later I looked up and say well, that’s that’s in the top 7% of earners in the country. Wow. And he didn’t know. And, and nor did His wife, and he was going to make some career decisions create a family, family feud. By approaching a family member saying I’m not making enough money, I need more. And it got very quiet when I said you realize you’re making 140. So. So I guess a big aha for me, Chris is and really the emphasis for this study is that I think it’s a sobriety financial literacy. And I have a lot of empathy for my fellow humans. And math anxiety is something very, very real. I believe I believe the number is it’s it’s an enormous percentage of people. I think it’s 60% report some form of math anxiety. And I think what I would love to see is that people had a greater appreciation, people that are already in the industry, have a greater appreciation, and help people help them do the math, because many, many people grossly underestimate their earnings and make decisions that affect them and their family. They leave the industry. So yeah, here it is. 73% of Americans rate finances as a significant source of stress. 50% of employees say they live paycheck to paycheck. But what we have found is that most in this industry don’t have an earnings issue. They either have a spending issue, a savings issue, or they they don’t understand the potential of what they can do with just a little bit of effort. How much more money they can win.
Chris Baran 54:57
I think that’s where there is Tom We have people in our listen, you can find out 10 ways to Sunday how to do a haircut, how to do a color differently how to do all of this. But I think that that it’s just the financial literacy of how you can make sure that you do this. I just remember reading a book, and I don’t remember the name of the book, I think it was probably I was back in the 80s. And I remember reading this book that they said, if that if you literally at that time, put $5 away. And with compound interest in you did your business that you wanted to do for your work in your 20 or 30 years, if you would have done that you would have still you would have over a million dollars at the end of the year, by the time that you had compound interest. And you know, I read the book, I would probably have already been in the business for about 10 or 15 years. I thought this is amazing. I told people about it, but I never did it. And then all of a sudden, I got into a certain stage in my life. And I looked at and I I went you know, holy crap, I don’t have anything and that I have that’s about savings worthwhile. Now. So then I had to double and triple down on everything that I had to do. And I think about how much more of that I would have had for security wise, if I would have done that at early rate. So that’s I mean, if there’s anything that I tell kids to do now, is don’t you know, like right now everybody’s saying, Well, I, I want to go on a holiday, I’m just gonna spend all my money, I’m gonna go to Europe, I said, Great, do that. But still take five or 10% of everything that you make and make sure you put that aside and do not touch it, or invest it or do whatever. So you’ve got that backup. So what do you I mean, I know how you feel about that. But I just wish that I would have done that. Yeah.
Tom Kuhn 56:46
Yeah, you know, I think that what we’ve we’ve created a lot of the work that I’ve done. Prior to the last like three years, Chris was more small business finances, and we’ve created right now is we’ve created some called Money edu, which teaches financial literacy to students. And that was the project before the kuna the Institute, we went from zero to 157 campuses in the year and a half. So we’re now teaching almost 20,000 students a year to and here’s how I like to say it, is to have the financial education to match their art and heart. So get out in the workforce, you know, do your art, you know, express your heart, but, you know, learn the financial skills so that you can really have that kind of freedom that comes you know, so you can have the quality of life you’re looking for. It’s not hard, you know, and, and, you know, financial literacy is just not taught in schools. And so to me, I think symptomatic to a lot of it’s like Adam story with the little bit of financial education and that kind of stuff, he wouldn’t have had all these years of stress, like, Oh, I’m not making enough money, I’m not making enough money, he would have made some very simple changes that would have would have put him out of a different point. Yeah, then he wasn’t his life. The
Chris Baran 58:18
so the I just want to bring this up. Because I, I’m hesitating, just from the conversation that you and I had just before we went on the air here. And I’m gonna ask the question anyway. And you can tell me whether you want to respond to it or not. Because as soon as you came on, we had some difficulties at the beginning, technically, but just before that, you said to me asked me why I’m late. And I thought, Oh, my God, that’s just unbelievable news. Can you tell us anything about that?
Speaker 1 58:56
Well, we were in we’re invited to apply to a Fast Company world changes, world changing ideas award. And literally, right before it when I was supposed to dial in for this, someone on the team called and said, hey, you know, we’re doing this application. It’s asked me some Dave’s question. So anyway, these are world changing ideas that are, you know, things that help make the world more equitable, more sustainable. Yeah. So. So the Qnity Institute is a pretty disruptive idea. It was established within the last year and so, so we’ll see. I mean, maybe we get acknowledged by Fast Company, maybe we don’t, it’s not necessarily important knowledge, but don’t
Chris Baran 59:38
sell that short. Because I mean, that’s, you know, I take my hat off to you that thing I think that are, the more that we have people that are in our industry that get acknowledged for what they do. That boost boosts all of us. That’s why I’m so excited about this for you. Is I just think that that the more that our industry gets out there not painted with the brush that we We’ve been painted with before, because we have amazing people in our business who care. There’s their heart, their soul, they pour everything into what they do for their customers and their industry and for the salon owners and the school owners that are out there that try to make everything better for us. We just need we need people like you in it. So I, I take my hat off to you. And I hope and pray that, that that award goes to you.
Tom Kuhn 1:00:28
Well, well, it takes a village, it’s been a very collaborative project. And for the record, I mean, first time around when we did these studies, refunded all of them but this has turned out to be a major collaborative and some some some beauty grants have really stepped up to really start to help sponsor this work. And you can reach with the sponsors weren’t all of that I don’t want to get into that. But it does take a village and Chris, it’s a true honor to be with you today. I’m looking over, I’m looking over your shoulder, that a lot of hardware there, you’ve gotten a lot of awards and shout out to you, my friend. I mean, you really this podcast is super cool. You don’t have to do this. There’s other things you could be doing. But, you know, I think that what really makes me tick, especially as I’m a baby boomer two, which people that are viewing this can easily see that. But impact is impacts number one for me. And income comes later but and I could tell you’re an impact guy and
Chris Baran 1:01:27
pleasure was mine. And I by the way, if you ever want any of that stuff, eBay is amazing. But the point that I want to do is like if people want to know more, because let’s face it, you’ve got Qnity for salons, you’ve got Qnity for schools, you’ve got the Qnity Institute, if people want to know more about you if they want to know, like, how do I get a hold of you? How do I find out more about this? How do they do that?
Speaker 1 1:01:54
Yeah, you know, I, it’s clearly QNITY. So we’re of course on social, I’ll give you my email. It’s email@example.com . And I’m always happy to engage in conversation with people. Here’s the other thing. Every Wednesday, I gotta have these, by the way, this is an invitation live, okay. Every Wednesday at 10 o’clock central time, I do something called lightbulb moments. And this is my version of a live it’s a live podcast that I do by zoom, but it’s live and we have an audience. I want to have you as a guest, but that’s a good way to kind of stay engaged with us is just to hear what’s going on in the community. You know, we talk about data that comes out I have great guests, I’d love to have you as a guest accepted. Yep, likes moments when
Chris Baran 1:02:49
we accepted. Listen, I I can’t I can’t thank you enough on here because again, everybody if you’re just listening, we are writing up but please do not leave right now. Because this is something that I want and I’m imploring everybody that’s listening and watching that you need to forward this kind of this kind of podcast on to people that are interested in our industry to salon owners if you know a salon owner owner that’s out there right now, that is always getting hassled by it every hairdresser that’s out there that’s getting the getting put into a box because of what they think our industry is not what it actually is. I think we really need to get that message out there. But Tom just on based on everybody from our company from myself, I feel I’ve got a new friend in arms here and I just want to thank you so much for being on here. It was an absolute pleasure.
Tom Kuhn 1:03:52
Yes, the pleasures been mine too. We have a new we have a new friendship my little fist pump across the Yeah, thank you and thanks to your listeners, man. Great work. And I feel like I’d like to keep this conversation going. I just I agree at this point. I agree the cocktail. I don’t need Yeah, well, I’m
Chris Baran 1:04:12
with you. But I don’t necessarily need it but I do need it more on it. But listen, Tom, I just want to say one more time for for you Tom and Qnity. Thank you my friend.
Tom Kuhn 1:04:27
Thank you. Appreciate it.