Reconsidering the Metrics of Success with Milk + Honey Spa
Shon Bayer and Alissa Bayer, co-CEOs of milk + honey spa, saw opportunity and went for it when they started their innovative spa in Austin. Industry outsiders, they focused their business on the happiness of their employees, their customers, and themselves. Eleven years and five locations later, the happiness metric is keeping the company strong and popular. Find out more about how these innovative founders are redefining success in entrepreneurship.
foundingAUSTIN: How long has milk + honey spa been around?
Shon Bayer: Our first location opened in January of 2006, so we're in our 11th year of operation.
fA: Who is your ideal client?
Shon Bayer: Someone who wants to come in and have an amazing spa service or haircut, or purchase skin care, hair care, or cosmetics that they can trust are made with integrity. We want our clients to be people that love what we do.
fA: How do you measure your business's success?
Shon Bayer: We're a pretty metric-driven company. We're completely self-funded—we don't have outside investors. We have four locations and in order to design and build a new location, we reinvest profits into the business. An important metric is how much we have accumulated before that new project comes online. We've also used, in some of our locations, some SBA loans from traditional lenders. Obviously, they’re looking at the strength of your P&Ls and balance sheet. Some of that drives the pace that we can open locations. I like to look at that as the natural speed limit to how fast we can grow.
fA: Is this your first company?
Shon Bayer: Prior to milk + honey, I worked at a tech start up called Enspire. I played a variety of roles from head of sales to acting CEO. The impetus behind this business was my partner and wife, Alissa. I'd been her support system for a long time. After about four years of moonlighting nights and evenings, I stepped in and took a much more direct operational role in the company as her co-CEO.
fA: What was the inspiration to start a spa? Is there any background there?
Shon Bayer: No background. It was just a business opportunity. I had lived in San Francisco for a long time and lived in Chicago for a while. She lived in DC, New York, and San Francisco. We realized that there was no high-end, modern day spa in Austin at the time. There was also some appeal for us in the fact that the spa business allows you to provide a service where you make people happy.
One of the great things about being in a business where you don't have a lot of experience is you can go into things without assumptions about how the industry or business should run. I think that has served us well and continues to serve us well in that we have been able to look at the business a bit more analytically, a little bit less emotionally. We never really say, "Well, that's how things are always done." That's just not how we make decisions in the business.
One of the things that I'm incredibly proud of is that when milk + honey started, we looked at all the other spas in Austin. Most of them hired their employees with contractors, which is illegal, but it's very common in the industry. Many of them take certain service fees, so there’s this bait and switch of, "We're going to hire you, and we're going to give you a commission of X, but we're going to take Y out for the massage oil that you use or the products that you use." Once again, this is against federal labor laws. None of these existing spas provided health benefits for their employees, either. Much less a 401(k) with any kind of matching. Almost none provided any paid time off.
We knew that if we could figure out how to make the business profitable enough, we could provide a very solid package of benefits for our employees and really differentiate ourselves from our competition and hire great people. The fact that we now have almost 300 employees who have the opportunity to get a retirement plan, paid vacation, paid time off, healthcare—that makes me really happy. I think if we had come through the industry, there's a decent chance that we wouldn't have necessarily viewed that aspect as a real way of distinguishing ourselves from our competitors.
fA: What are your top skills sets or strengths as an entrepreneur?
Shon Bayer: I trained as an engineer, so I have an analytical mind, which I think is pretty rare in this industry. I think that a lot of entrepreneurs get excited about potential locations and they don't necessarily think about the fundamentals. A case in point: we would like to expand to Dallas. A friend of ours, who's in real estate, sent us information about an opportunity there. The marketing materials were really slick. It looked right up our alley, but before we took the meeting I ran some numbers of what the draw was demographically to that location and it was terrible. I was able to very quickly turn it down in favor of a space that offered more immediate appeal. That has been very beneficial.
Another really key skill is being able to properly delegate and find people that you can trust. One of the biggest traps of entrepreneurship is getting so involved in the day-to-day that you can't take the time to actually grow the business. That's one of the brilliant things about us being in the spa industry—we don't give massages, we can't give a haircut, we can't do those things, so we're not dependent on doing those things to supplement our income.
fA: What do you love about being an entrepreneur?
Shon Bayer: Honestly, the best thing is at the end of the day, Alissa and I don't have bosses. We keep each other accountable. We obviously have employees keeping us accountable, but we have an enormous amount of freedom to operate the business in the way that we think is best. For us that is fantastic. The downside of that is we can't quit. We can't just say, "Here's two weeks notice." That's not a scenario, so you have this freedom, but you also have these shackles around you. Most of the time I think the freedom is amazingly worthwhile.
fA: Who inspires you?
Shon Bayer: My old boss at Enspire. He started the company with a couple of his college friends. He basically built that company out of literally nothing and without investors. He had an uncanny ability to sell but he wasn't your typical salesperson. You knew that if you put him in the presentation, your odds of closing the deal went through the roof. So much of that was the fact that his passion for what Enspire was doing so readily seeped out of his pores. That was always very inspiring to me. It was always something I tried to emulate.
fA: Is there a particular piece of advice that you'd give an aspiring start up?
Shon Bayer: You have to be really clear about what you want to measure yourself against. You have to have really clear metrics for success. There's so many different metrics for success. In business most of the time, you're talking about profit and loss, revenue, rate of growth, things like that. I think that there are a lot of other metrics that you can look at. Maybe freedom, happiness, and flexibility are other metrics that you can look at. Be honest about the key metrics that you care about in your company and in your life and work towards those. It doesn't have to be growing your business by X percent, becausewhat does that get you? What is that going to give you? If that's going to give you a bunch of headaches, then why do that?
Just be courageous. And I do think it's important that you're doing something that you enjoy. That it's a business you're going to wake up every morning and be passionate about.