The few bankers they saw were not amused. "We had put together a booklet for them, like a business plan, but they never even looked at it," Linda recalls. "Once they found out we had no assets, they showed us the door." One banker even rubbed it in. The rich got richer, he said with a laugh, and the poor got poorer.
The $35,000 never did materialize, but there were those who believed in Tramel. One was a brother-in-law who lent him $9,000. Another was Heil Equipment Co., a Kentucky-based salon-equipment supplier.
The hardware for the parlor -- the hydraulic-lift chairs, the hair dryers, the shampoo bowls, the tint-and-perm bar, the retail display cases, the manicure table -- that all came to $23,000. Heil normally sold the equipment outright, but a young Heil salesman who liked Tramel convinced his superiors that in this case a lease-purchase deal made sense. "He wanted to get me the whole thing with no down payment," Tramel says, "but I had to come up with $5,000. That cut hard into the $9,000, but after four years I'll own all the equipment."
Then there was Kent Zoellner, a former autoworker who had built a little shopping complex. It featured a pizza parlor, a doughnut shop, a convenience store, and a crafts shop. In scouting locations, Tramel had spotted Zoellner's tiny mall and liked it. It sat near the junction of a primary road and Interstate 55, which steams north and south through Arnold. It was easily accessible by car, with plenty of parking.
Strangely enough, Zoellner's wife, Pat, was one of Tramel's customers at Stop 'n' Style. One day as Tramel worked on her hair, he was musing that he'd like to have his own salon. In fact, he had even found a desirable site. As he described it, Pat turned around, stunned. "John," she said, "we own that!" On top of that, oddly enough, the Zoellners were looking for a salon to fill a 2,000-square-foot expansion space. And if Tramel needed a reference, who better than the landlady herself?
At $1,200 a month, the rent was more than he had planned on. But Kent sweetened the package by installing the walls, the plumbing, and the electrical work, all free of charge. He even put in the floor Tramel wanted, and the molding.
The pieces came together. And on June 25, 1990, John Carl's Hair Designs Inc. opened for business.
The name wasn't as cutesy as those plastered on some nearby salons -- Shock Waves, Sensational Cuts -- but Tramel didn't want cutesy. "It seemed to me that the really successful salons are named after the owners," he says. "So I figured I'd try that. And a lot of customers have thanked us for not calling it Cuttin' Wild or something like that."
As for a staff, Tramel had led a small insurrection at his last salon, the now-defunct Stop 'n' Style, bringing with him three stylists whom he held in high regard. Having worked with Tramel for a couple of years, they knew him to be a nice, mild-mannered guy, a family man who sang in the church choir. He'd be a decent boss.
His recruits liked the new salon, too. It had a bright, cheerful ambience, with ceiling fans and plants galore. Tramel kept the place sparkling and spotless. It featured a comfortable, secluded break area complete with a modest kitchen, a stereo, and lockers for personal belongings. Classy indeed by Arnold standards.
He filled out his crew with four young stylists. They had no following to speak of, but that could be developed. For starters, Tramel thought, they could catch his overflow.
(continued)
It wasn't long before the glow from the grand opening began to dim for the new owner.
Expenses, for one thing, were eating him alive. He had the $1,200 rent plus a $617 payment for the leased equipment. Electricity was running $400 a month, the phone $140, and insurance $150. Supplies (shampoo, conditioner, chemicals for perms and tints) were costing $800 a month. The $9,000 loan had to be repaid, too -- another $200.
Right there, Tramel had bills topping $3,500 a month. And that was before payroll, advertising, cleaning costs, and sundries. "Before you start a business, everybody gives you advice, and you try to prepare yourself mentally," he says. "But I learned real quick that I didn't know what I was getting into."
At the end of the 1990 tax year, after six months in business, John Carl's had grossed $49,300. Not bad, really. But deductions, including depreciation, came to $57,700. Tramel himself had largely kept the place afloat, cutting hair "like a madman" six days a week. Yet he was able to draw only $12,400. "We thought it would be pretty awful, and it was," says Linda, who didn't draw a dime.
By this past August, eight months into the salon's first full calendar year, things were brightening a bit. The start-up trauma had faded, and receipts were running about $2,000 a week. That was close enough to break-even that Linda, who handles the bills, could juggle expenses by "playing the float" with the withholding taxes. Still, Tramel was getting paid only when money was left over and never when the rent was due.
Part of the difficulty was the low level of retail sales. Tramel carries a full line of Matrix Essentials and other sold-only-in-salon shampoos and conditioners. With a 100% markup, they could be a nice profit center. In some salons they are 30% of gross, but at John Carl's they were at most 10%. Tramel had no trouble selling the products. But his employees, afraid of seeming pushy to their clients, some of whom were friends, didn't bother. And Tramel didn't want to force the issue. "I'm always on him to be harder, meaner, but it's really not in his makeup to be that way," Linda says.
Another snag was the unexpected departure of three stylists. One had a baby, and the others went seeking more lucrative work. Hairdressing would never rank up there with investment banking, but Tramel was doing what he could. He set his commission structure, for instance, at the upper end of industry standards.
