Kristen Gale, CEO and founder of The Ten Spot beauty bar, faced huge obstacles when she decided to franchise her business. But her resistance paid off, as there are now 47 locations, including several in the USgiven
If Kristen Gale knew what she was getting into, she probably wouldn’t have franchised her beauty bar business. As she prepares to open her 47th location, she is grateful for her naivety.
The CEO and founder of The Ten Spot opened her first location on Toronto’s Queen Street in 2006 at the age of 24 after being laid off from an unpaid internship and downsizing from her first job.
“At the time, 18 years ago, there were very fancy, very expensive, ‘just go with your mum so she can pay for you’ kind of spas, and then the high-end nail salons,” Ms Gale says. “I thought, ‘What if I took the best of the luxury market, excellent guest care and clinical cleanliness, and combined it with the affordability and more casual atmosphere of a high-end salon?'”
The concept was so big that soon after Ms. Gale opened a second location in Toronto’s Leslieville neighborhood and began planning two more: one on Bloor West and another in Hamilton. That’s when Ms. Gale decided the best way to meet the demand was to become a franchisor, which she assumed was as simple as going to a lawyer and filling out the necessary paperwork.
“It was a steep, scary, horrifying and humbling lesson to realize this [franchisees are] not my managers, they are business owners,” she says. “My business model — which used to be manis, pedis, waxing and facials, and my guests are the people who come in for those services — has now made someone who doesn’t know anything about how to run a business, how to run a spa business , how to run a Ten Spot business, fully trained and open and operational. These were now my clients.”
In 2011, while her first two franchisees were asking themselves some very basic questions about how to run and operate the business — the answers to which Ms. Gale says only existed in her head — the entrepreneur was preparing to give birth to her son.
“It’s a picture of me nursing him, on his first day alive, with my laptop next to me, texting him,” she says. “It was hard; hard discussions, hard decisions, a lot of hassle, a lot of late nights, just to go from 10 steps behind where I needed to be to just one step ahead.”
Adversity in entrepreneurship is inevitable, but those who can muster the resilience to overcome obstacles usually emerge stronger and better prepared for what lies ahead.
Ms Gale says The Ten Spot franchise model is now a well-oiled machine, with well-defined systems, policies, protocols and manuals to guide new owners through every step of the process. The experience also prepared her for the next time she felt a little over her head, when she recently started expanding south of the border.
“It’s another time where I just didn’t know what I was getting myself into,” she says, adding that she felt more confident facing this latest “trial” knowing she had overcome similar challenges before. Today, The Ten Spot has four locations in the United States, with more on the way.
Like Ms. Gale, Erin Bury found herself facing unexpected challenges as she expanded her business. The CEO of online estate planning platform Willful — which she co-founded with her husband Kevin Oulds in 2017 — believed the only way the company could reach its full potential was to fund rapid growth with investor dollars.
By 2021, the company had raised about $1.5 million, but as Ms. Bury sought to raise another $3 million to $5 million early last year, she found the market had changed.
The economic climate has been particularly challenging for tech startups in recent years, with increased market volatility and investor caution due to factors such as high inflation and changing consumer behavior. For entrepreneurs like Ms. Bury, navigating these complexities required a significant shift in strategy and mindset.
“We found right away that it was a challenging landscape because of the economic climate,” she says. “Investors weren’t buying these frothy valuations that companies got years ago and were just writing fewer checks.”
Ms Bury says her first reaction was to work harder, putting in hundreds of hours over months perfecting her pitch, networking, outreach and meeting investors. But in the end, he couldn’t find the business he was looking for. At the same time, Ms. Bury says she has seen tech companies that have raised large rounds of funding suffer massive cutbacks and layoffs. That’s when he began to question whether those dollars were necessary.
“I had to change my mindset from raising funds and being on this tech rocket unicorn to focusing more on running a healthy business, more on profit, more on autonomy and not having to rely on investors , because this is really unpredictable. “, she says.
Research supports this shift in perspective. A study published in the Journal of Global Entrepreneurship Research found a strong link between entrepreneurial resilience and success at both the individual and organizational levels. It highlighted that resilience is essential in dealing with challenges and coming out stronger on the other side.
Ultimately, Willful raised $1.1 million, mostly from its existing investors, as it shifted its strategy from growth at all costs to profitability.
Reflecting on the lessons learned, Ms Bury emphasizes the value of letting go of the relentless pursuit of funding: “I think the key learning is that you don’t always have to be on that investor hamster wheel,” she says. “I’ve done it before and it took me away from what brings me joy, which is working on the product, working with our team and trying to impact as many Canadians as possible.”
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