Sunday 28 December 2014

How profit margin became mother of reinvention for beauty therapist

Salon owner Anna Costello believes upskilling and a focus on customers can revitalise a business

Sean Gallagher

Published 08/06/2014 | 02:30

Through the looking glass: Sean Gallagher and Anna Costello of Newgenskin. Photo: Gerry Mooney
Through the looking glass: Sean Gallagher and Anna Costello of Newgenskin. Photo: Gerry Mooney

Anna and Seamus Costello are like many Irish couples. Both were kept busy working away in their respective careers until they got married and started a family.

Based in Cavan, Seamus ran his own transport company while she worked in the head office of a leading construction company. After the birth of their third child, Anna made the courageous decision to go back to college and then set up her own hugely successful health and beauty clinic called Utopia. However, further changes were to follow in 2008 when both their businesses were hit by the downturn.

Theirs is an interesting story. Their journey too, mirrors that of many other small business owners who have had to reinvent themselves in line with the changing nature of their personal circumstances and the harsh economic conditions that have confronted them.

I meet up with the couple in Anna's clinic on the grounds of the Cavan Crystal Hotel on the outskirts of Cavan town. Her award-winning clinic is a welcome oasis of calm compared to the busyness of the hotel's lobby.

"Our clients include both men and women who range in age from teenagers with acne to more mature women who are looking for anti-aging treatments," explains Anna.

As she shows me through the clinic, she explains how revenue from the business typically comes from a combination of treatments, carried out in the salon, as well as from the sale of skincare products for use at home.

"This mix of revenue is an important part of sustaining the business of any salon in that it provides a margin to owners which allows them re-invest in equipment, decor and client comfort. More importantly, it enables them to invest in training and educating their staff to ensure that consumers receive the highest standard of service possible," insists Anna.

Business grew steadily for Anna after she opened the clinic in 2003. Within two years, she had won the national award for best salon from the Irish Beauty Professional Association, the highest accolade in the industry, a testament to both her professional and management capability.

She also managed to excel, not only from a service perspective, but from a commercial standpoint, quickly becoming the top account in the country for each of the well-known brands she carried in her salon.

Considering that her salon is located in a local hotel rather than on the high street and is in Cavan rather than a larger urban setting, she must be pleased with such a record?

"We work hard," explains Anna modestly. "While all our staff are post-graduate trained therapists and highly skilled skincare professionals, what really separates us from other competitors is our knowledge of the products we use and our attention to our customers," she insists.

Everything in her business was going well for Anna until the downturn hit in 2008.

"I realised straight away that our business model had to change if we were going to survive," she admits. "I began to understand how control in our businesses lay, not with us, but with the large brands we stocked. They were controlling supply and pricing to us while, at the same time, selling the same products directly to the end user via online and effectively bypassing us as salon owners. All the while, we were having to invest in premises and equipment while they shipped from large, low-cost, foreign warehouses" she adds.

To address this growing challenge, she set about researching the market with a view to sourcing quality products that were not available for sale on the internet. She eventually found an Italian skincare range, called Bioline JaTo, and moved quickly to tie up the distribution rights for the brand for Ireland.

"The range has a very strong focus on safety and, given that we are dealing with people's faces and their skin, such standards in safety is of paramount importance to us," she emphasises

She secured the distribution rights for a high-quality brand of Swizz make-up and nailcare, called Rolf Stehr. She felt she had a complete range of products over which she finally had control. So in early 2012, she set up Newgenskin Ltd as a distribution company to supply these products to other like-minded salon owners seeking a similar level of control over their businesses.

Recognising the need for product training, she also set up a comprehensive product training and certification programme for those interested in stocking these professionally prescribed brands.

Gradually she came to realise that some salon owners needed not only product training but also general business and management training. As a result, she expanded her training to include broader based mentoring services.

"Once a month we bring salon owners together, typically in groups of six, with a view to providing them with peer to peer support from other salon owners. Each month too, we do a deep dive into one particular business in order to offer more in-depth insights and strategies to the business owner on how to deal with whatever specific challenges they are facing in their individual business, " she says.

Anna Costello is from Cavan town. She comes from a family of entrepreneurs. After school, she completed a course in business studies in the Cavan College of Further Education before taking up her first job in her sister's fashion design business.

In 1990, she got a job in the construction sector with James Elliot Construction where she stayed for the next 10 years, gaining valuable experience in areas such as payroll, purchasing and accounts, all of which appear to have stood to her in growing her own business.

After the birth of the couple's third child, Anna made the decision to give up working outside the home, at least for a period. However, two years later, she was beginning to really miss adult company and the mental stimulation of the workplace.

Anna returned to college to study beauty therapy.

"It was an area I was always interested in and I felt that it would give me a more flexible work schedule as well as the opportunity to set up my own beauty business," she explains.

Anna applied herself diligently to her studies so much so that she was awarded Cavan Institute student of the year. While still in college, she also contacted the Cavan Crystal Hotel which had just opened in the town and asked if they would be interested in her starting a salon as part of the hotel. After several months and many meetings, she eventually persuaded them.

Such was her determination to start her own business that, during the time while she was waiting for a response from the hotel, she attended a beauty trade show in Dublin and ended up buying equipment with which to fit out her salon.

Even today, Anna remains committed to continuous learning and is currently studying for a BSc degree in management practice through the University of Ulster.

Her husband Seamus grew up in Ballyhaise in Co Cavan. He got his first job with the Cavan Mineral Water Company and worked there until in a wave of redundancies, he found himself out of work. While lucky enough to secure a job with the same construction company where Anna worked, he decided to leave the job four years later to set up his own haulage company which he ran until 2008 when it became harder to get paid for work and so was forced to wind up the business.

Not one to sit around, he sold sand and gravel on a part- time basis while at the same time supplementing his income by doing door-to-door deliveries for local milk companies. In tandem with all of this, he continued to oversee the warehouse and despatch requirements for Newgenskin.

Just recently, and perhaps a sign of changing fortunes within the construction sector, Seamus was offered a job by the construction firm he used to work for.

Anna is full of praise for the ongoing support she receives from Seamus. She is also quick to acknowledge the importance of her staff.

"Everyone on the team brings a unique set of skills and qualities to the business. We consider everyone's opinion and we leave our egos at the door. It's about the business and, most importantly, it's about our customers" she insists.

What about the future? By the end of 2014, she hopes to have developed a solid distribution business in Ireland and sees herself introducing other complimentary product ranges to expand her offering to her growing base of salon and spa owners. After this, she will begin to focus on growing the business in the UK where she recently began supplying her first salon and skin clinic in London.

Anna Costello is a smart business woman. She is a hard worker, a strong leader and a courageous entrepreneur. As a mother, she was prepared to return to college to create new possibilities and a more flexible working environment to meet her family's needs. She was unafraid to start a new business. And unafraid too, to confront the challenges in that business when it emerged that suppliers were beginning to erode the very margins that she and other salon owners needed to survive and to sustain their businesses. Together she and her husband Seamus have shown what can be achieved when you are not afraid to upskill and to reinvent yourself.

Anna's advice to new businesses

1 Don't over-reach yourself

"While it is important to stretch yourself and your business, be careful not to over-spend and over -reach. Make sure you can manage and fund your company's growth."

2 Hold on to your core values

"Values are seen as increasingly important in business. Customers and staff will appreciate you maintaining values like quality, ethics, safety, customer service."

3 Be grateful

"Be passionate about work. But also be grateful for your staff, your suppliers and customers. Without them, you simply would not have your business."

Business Masters

Company name Newgenskin Limited

Business Supplier of skincare products to the beauty industry

Set up 2012

Founded by Anna & Seamus Costello

Annual turnover €1m in 2014

Number of employees 10

Location Cavan town

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