Fall 2006

Progress
An Update for Members of the Professional Beauty Association

Event Spotlight
TSA
Symposium 11
get in the
game January 20-23, 2007
San Antonio Marriott Rivercenter

Inside this Issue

Letter from Government
Affairs Director 2
You Belong Campaign 3
Advertise Your Membership 3
Center for Business Education 3
NAHA Winners 4
Distributor Letter 5
Distributor Sales Promotion 5
Distribution Technologies 6
Manufacturer Letter 7
Anti-Counterfeiting Legislation 7
Cosmoprof North America 8
Nail Manufacturer Council 8
Salon/Spa Letter 9
Symposium Preview 9
Owning Up to
Being the Owner 10
A Look at Health
Insurance Premiums 11 You
Belong.
Benefit Highlight: ISSE 12

For more, turn to page 3.

2
A Letter from the Government Affairs Director
If you’re like most people, government affairs
likely isn’t the first thing you think about when
you wake up in the morning…and probably
not the last thing on your mind at the end of
the day. Yet, for good or bad, we know that
decisions are made everyday by all levels of
government that have a direct and real impact
on our personal and professional lives.
The professional beauty industry is a $60-
billion economic engine that employs tens
of thousands of individuals and serves
millions of customers every year. To
ensure that this industry stays strong and
vibrant, having a collective voice becomes
extremely important.
The professional beauty industry is a
$60-billion economic engine
The good news is that PBA is working hard
to be this collective voice. Past surveys tell
us that government affairs is a high priority
for our membership. And it is certainly an
area where PBA can have a great deal of
influence on the environment in which we do
business. As you’ve likely read in past issues
of this newsletter, PBA leadership has made
government affairs one of the association’s
highest priorities.
Government Affairs in Action
August 15, 2006: PBA
member David Horton,
owner of The Brothers
Salon in Shreveport,
Louisiana, presents
a PBA Friend of the
Industry award to
Representative Jim
McCrery. McCrery is
a critical co-sponsor of our tip-tax legislation—and
possibly the next chairman of the House Ways &
Means Committee.
May 18, 2006: Trent
Day of Scruples, a PBA
manufacturer member,
styles a Capitol Hill
staffer during Welcome
to Our World (WTOW),
the annual makeover
of Congress. Members
of Congress and their
staff praise WTOW
as one of the most
popular events on their
calendar.
www.probeauty.org
Over the next few months, you can expect
to hear a lot more as we build on a solid
foundation in creating a new and responsive
government affairs program. PBA will be calling
on you to take action on issues of importance.
Whether we ask you to send an e-mail to a
member of Congress or share your thoughts
on a particular issue…your involvement will
absolutely make the difference!
There are ways you can get involved right
now. If you have state or federal issues you
PBA Progress
are dealing with – we want to hear about (Fall 2006)
it. If you have a special relationship with a is a publication of
member of Congress, state legislator or the Professional Beauty Association.
local regulator - please let us know. Are
you interested in keeping up on the latest
industry news? Consider joining PBA’s Professional Beauty Association
government affairs listserve. 15825 North 71st Street, Suite 100
Scottsdale, Arizona 85254
800-468-2274 (480-281-0424)
Make no mistake about it, when individuals Fax: 480-905-0708
and businesses join together in an association www.probeauty.org
like PBA, we can be a powerful and effective info@probeauty.org
voice for this industry.
The Professional Beauty Association (PBA) is
Sam Leyvas joined PBA as Director of a non-profit trade association that represents
Government Affairs in June 2006. Sam works
the interests of the professional beauty industry
side-by-side with PBA’s volunteer leadership
to advance the industry’s advocacy agenda from manufacturers and distributors to salons
in Washington, DC and state
and spas. PBA serves the industry with
legislatures across the country.
You can reach Sam at 800- education, government advocacy, commerce
468-2274 (480-281-0424) x118 opportunities, research/statistics and public
or email sam@probeauty.org.
relations/image building.
May 18, 2006: PBA
member Paul Brown of
Paul Brown Salons &
Spas in Honolulu drew
members of the Hawaiian
delegation to his station.
May 18, 2006: PBA Executive Director Steve
Sleeper presents Congressman J.D. Hayworth of
May 18, 2006: PBA Arizona with the 2005 Legislator of the Year award.
member Charles Hayworth, a co-sponsor of PBA’s tip-tax legislation,
Riser Jr., owner of praised PBA members’ “cheerful persistence” and
Maryland’s New York explained that the difficult part is “finding the right
New York Salon and vehicle” to move the legislation forward.
The Temple Academy,
connects with If you have a success story and picture to share
Representative Luis V. with other members, please email
Gutierrez of Illinois. sage@probeauty.org.
You Belong!
3

Center for Business

Education Fall Classes
The Professional Beauty Association is running a new membership campaign in Fall Launched in Spring 2006,
2006. The campaign, which features images of members, highlights the benefits of PBA’s Center for Business
belonging to the association. Education (CBE) provides on-going, executive-
level education for professional beauty
industry distributors, manufacturers and

g. I belong. salons/spas. CBE educational programs are

lon unlike any other—taught by successful peers

I be with in-the-field experience and focused on

our industry’s issues. All classes take place at
PBA headquarters in Scottsdale, Arizona.

Learn to Build a Salon Empire

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October 15-16, 2006
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includes Lina Heath (VP, Operations), Candice
The campaign focuses on: Jahns (Operations Director) and Brenda Netter
business tools • education (Academy Director).

• government advocacy • networking • and more! Top Gun Sales

Manager Training
November 2-4, 2006
Get involved and help grow PBA’s ranks. Here are some ideas:
This full-blown sales manager training
program is designed to help distribution sales
1. Run an ad. managers get results, learn from peers and
If you have a publication that reaches potential PBA members and would be willing to run
acquire new industry knowledge. Hosted by
a membership ad, please email sage@probeauty.org. (Ads in member publications are
some of the industry’s top sales gurus, the
customized to include the member’s logo and acknowledge the membership at the bottom.)
“Top Gun Sales Manager Training” program
will leave attendees with enough ammunition
2. Create a networking group. to hit their sales targets.
Networking is the most effective way to reach new members and sustain existing members. If
you are interested in starting a group in your area, please visit www.probeauty.org/networking How to Become a Million
for tips on how to get started. We’ll help! Dollar Sales Consultant
November 4-5, 2006
3. Start the conversation.
Distributors: Ask your DSCs to push membership when they speak with their customers. Sales consultants will learn from industry
Salons/Spas: Ask your distributor if they’re a member. If they’re not, ask why! peers how to manage time, profile clients
Manufacturers: Encourage your top salons and distributor partners to become members. and build relationships with salons to help
them succeed. Hosted by Tom Conley (GSM,
To request recruitment pieces, Marshall Salon Services) and facilitated by
call 800-468-2274 (480-281-0424) Steve Withrow (Salon Sales Consultant) and
or email info@probeauty.org. Rosemary Pearson (Business Consultant,
Salon Services & Supplies), “How to Become
a Million Dollar Sales Consultant” unveils the
secrets others have used to achieve success
Advertise Your Membership in the beauty industry.
PBA salutes manufacturer member Joico, who
To register for any of the Fall 2006 seminars,
included a “PBA member” logo on their recent please contact Melissa Coe at 800-468-2274
ad campaign. Show your PBA pride in your x128 or email melissa@probeauty.org. For
more information on CBE, please visit www.
advertisements. Download the “PBA member” probeauty.org/cbe, call Samantha Alvis at
logo at www.probeauty.org/download. 800-468-2274 x117 or email samantha@
probeauty.org.

H o n o r i n g To p H a i r s t y l i n g
NAHA Salutes Hairstyling’s
Next Big Things
The North American Hairstyling Awards (NAHA), the
height of North American hairstyling competitions,
acknowledges the very best stylists, leaders
and trendsetters in the world of hair and beauty.
This year’s awards gala, held July 17, 2006 at
the Mandalay Bay in Las Vegas, was hosted by
John O’Hurley of ‘Seinfeld’ and ‘Dancing with the
Stars’ fame. He brought his elegance and charm
to the stage as the following twelve winners were
announced:
Avant Garde
Nicholas French
(Matrix Academy,
West Hampton, NY)
Contemporary Classic
Dusty Simington
(Salon Gregorie’s,
Newport Beach, CA)
Haircolor
Adriana Balea
(Toronto, ON)
Long Hair Dressing
Ann Bray
(The Masters,
Huntsville, AL)
Makeover
Lorraine Wilkins
(Enviro Trends, St.
Thomas, ON)
www.probeauty.org
NAHA Recognizes
Industry Leaders
produced by PBA
Carmen
DePasquale
Texture
Jackie Elliott
(Vault Salon & Spa,
Winnipeg, MB)
Carmen DePasquale, founder and CEO of
DePasquale companies, joined the NAHA Hall of
Leaders in 2006. The Hall of Leaders recognizes
outstanding contributions to the hair and beauty
industry. Past inductees into the Hall of Leaders
include Bruno Mascolo (2005), Winn Claybaugh
Make-Up (2004), Ann Mincey (2003) and many more.
Artist of the Year
Angelia Senevisai
(Maplewood, MN)
Michael Gordon
Student Hairstylist
of the Year
Kirby Keomysay
Michael Gordon, founder and CEO of Bumble
(Capitol School of
Hairstyling, Omaha, NE) and bumble, received the prestigious Lifetime
Achievement award in 2006. The Lifetime
Achievement Award, NAHA’s top honor, recognizes
outstanding contributions to the hair and
beauty industry and is limited to licensed salon
professionals. Past winners represent preeminent
innovators from the industry, including Sam Brocato
Salon Team of the Year (2005), Horst Rechelbacher (2004), Robert Lobetta
Enviro Trends (2003) and many more.
(St. Thomas, ON)
Editorial Stylist
of the Year
Veronica Bessey
(Carrollton, TX)
Join the forces of the next
style revolution! NAHA is
recruiting all super-stylists
with an eye for fashion and
an edge for change.
Hairstylist of the Year Download an entry form at
Maureen Anlauf www.hairstylingawards.com.
(Juut SalonSpa, Deadline for entry: February 1, 2007
St. Paul, MN)
Questions?
800-468-2274 (480-281-0424)
naha@probeauty.org
Master Stylist of the Year NAHA is a photography-based hairstyling
competition produced by the Professional
Heather Wenman
Beauty Association. NAHA celebrates the skill
(Entrenous/Academy
and artistry of creative professionals in the
Heather Wenman,
beauty industry. NAHA also honors outstanding
London, ON) business leaders in the industry with the Hall of
Leaders and Lifetime Achievement awards.

Distributor Section
A Letter from the Leadership
Opportunities for PBA distributor members
continue to increase! In our last update, I
mentioned three goals for our section:
Improve Communication
Foster Peer Education and Networking
Provide Benchmark Research
Our progress report on these goals:
Improve Communication. In this issue of
PBA Progress, you’ll find articles on important
topics for distributors, including a piece on
technology and distribution. Article ideas
come from the suggestions of fellow distributor
members—if you have a suggested topic,
please email sage@probeauty.org. In addition,
our distributor listserve is always available
to our members. Ask a question or share a
valuable resource with other members. For
example, see the sidebar for a tip on credit
card processing.
Foster Peer Education and Networking. I’m
pleased to announce two spectacular Center
for Business Education (CBE) events this Fall:
Top Gun Sales Manager Training November 2-
4, 2006 and How to Become a Million Dollar
Sales Consultant November 4-5, 2006. Both
Distributor Sales
Promotion Ideas
Sales promotions take careful planning
but can yield great results. Here are a
few ideas from member distributors:
DSC Rumble:
Boxing Theme
Each DSC goes one-on-one against
a fellow DSC for a week. Each earns
different points for selling different
deals. The DSC with the most
points wins the fight. After an
eight-week period, we look at
whoever has the top record
and they win the Championship
belt, which gets them a big
prize. We have different weight-
class divisions, so veterans go
up against veterans and rookies
vs. rookies.
– Josh Hafetz,
Raylon Corporation
Reading, PA
5
classes will take place in the PBA office in
Scottsdale, Arizona—a great place to be in Save on Credit Card Processing
November. Both classes will be facilitated by
industry peers, including one Million Dollar Credit card processors typically charge a
Sales consultant that writes over 2.8 million different rate for processing different types
dollars a year! Our distributor education and of credit card transactions. For example,
networking opportunities will continue to
if the card is physically present at the
expand with Spring CBE events. If you have
time of the transaction and “swiped,” the
a topic of interest or would like to facilitate a
credit card processor will charge less than
class, feel free to contact me.
if the transaction is processed without
Provide Benchmark Research. Our PBA physical card presence. Also, business
Distributor Benchmarking Study went out to
cards usually have a higher processing
all PBA members in August. Thank you to all
cost than a personal credit card. If credit
members who took the time to complete the
card processing costs are significant to
brief, on-line survey. Results will be available
to the participants of the survey this Fall. your business, contact you bank or card
processor to see if you can reduce your
Feel free to call or email me anytime with
rates by the way you process credit cards.
suggestions on how the PBA Distributor
Leadership Council can serve you
with more communication, education,
networking and research.
Bob Peel Jr.
Peel’s Salon Services
President, Distributor
Leadership Council
620-662-3374 | bjpeel@peels.com
Postcard Encouraging Stylists’
Campaign Retail Performance
to Up Retail
Sales contests motivate stylists to sell a
Sales
specific brand or item/s. Set a sales goal of
a certain number of products, such as 36 or
48 pieces. Allow every stylist who reaches
Goal: To promote
the goal within a specified time period to win
increased retail
a prize. The prize can be the product being
sales to a salon’s top
sold, shears, a blow dryer, etc. This contest
50 clients. Method:
encourages all stylists to participate and win,
A postcard mailing
not just the top producers.
offering a $10 savings on a $50 retail purchase
– Max Wexler
(a 20% savings). The distributor produces the
Beauty Craft Supply & Equipment
postcard, and salons and stylists personalize
Hopkins, MN
it to the client. The salon pays postage.
The salon turns in redeemed postmarked
postcards for $5 to the distributor. (Salon
Share your own great sales promotion!
product cost is covered by the distributor.)
Distributor members can share tips, ask
A salon’s best clients will usually try new
questions and discuss trends in the industry
products from the distributor thanks to
through the distributor listserve. This
this offering.
exclusive-to-distributors communication
vehicle is a great way to experience the
– Jim Marshall
power of networking at your own desk.
Marshall Supply Company
Subscribed distributor members can
Dixon, IL
simply email pbad-list@listserve.com. Not
subscribed? Email info@probeauty.org or
call 800-468-2274 (480-281-0424) to get
subscribed.
Distribution
Technologies for
the Beauty Supply
Industry
As a growing beauty supply distributor,
at what point do you begin investing in
distribution technologies? How much
do you invest? How do you validate
the appropriate solutions against your
return-on-investment (ROI)? Is RFID
on your horizon as your customers
become more sophisticated? These
are a few of the questions that plague
many business owners and corporate
executives trying to get a handle on
distribution costs.
From our experience, a beauty supply
distributor with annual revenues of
$15M - $20M with a growth rate of
over 5% per year should automate
its distribution. It is also normal to
make a one-time investment of 2 -
3% of one year of annual revenues to
accomplish this objective.
In the vast majority of cases, the
first step should be to invest in a
Warehouse Management System
(WMS). Regardless of the storage
medium used in your warehouse,
control is the critical element. As your
distribution execution changes over
time and you add or change storage
equipment in your distribution center,
the WMS should be flexible in design
and must adjust to your new layout
with relative ease.
www.probeauty.org
What are the benefits of a WMS?
• On-time order fulfillment and product pallet racking with Radio Frequency (RF)
delivery to the customer
• Labor reductions through productivity of the warehouse and provides them with the
improvements and increased
accountability of employee time
• Space savings through reduced
inventory levels and maximization
of storage locations
• Real-time inventory accuracy and
visibility throughout your supply chain
• Improved shipping accuracy and
dramatic reductions in returns
• On-demand utilization of bar code
and RFID technologies
• An integrated multi-carrier shipping
system to reduce shipping costs
with audit capability
• Modular design allowing the warehouse
operations to be dynamic over time
These are all quantifiable benefits that provide
you with significant “hard” cost savings. There
are a significant number of intangible benefits
as well.
The WMS you choose should be modular in
design. Even though the basic processes
remain the same, the needs of a $100M
beauty supply company are obviously more
extensive than that of a $20M company. The
WMS must be flexible enough to grow with
you and expand/contract as your business
demands fluctuate.
Also, the WMS should be able to drive all
types of warehouse equipment. For example,
Marshall Salon Services (Dixon, IL) uses
such a combination to fulfill their distribution
needs. They use carton flow rack (with pick-
to-light) for their high velocity items, horizontal
carousels for their medium movers, and
technology for their larger shipments and slow
movers. Their WMS is the intellectual brawn
inventory visibility necessary to make real-time
decisions on behalf of their customers.
With respect to the ROI, a reputable WMS
supplier will provide you with meaningful
statistics. At the most, 18 months should be
your goal for payback. If you ask Jim Marshall
of Marshall Salon Services, he will tell you that
he dramatically exceeded his expectations,
and the payback period was considerably
shorter than he imagined.
There is an old axiom in business: “my
warehouse is a cost center.” But isn’t it also true
that you don’t collect a dime if you don’t ship?
Making your distribution cycle efficient will
actually enhance your customer retention and
help secure new customers as you out perform
your competition. Your distribution capability is
actually getting you more business—doesn’t
that make it a profit center?
A properly designed and implemented
distribution solution will save you labor, provide
you with a space windfall and ultimately
increase your customer base as you out-
perform your competition. Order fulfillment,
shipping accuracy and delivery schedules
are the key factors to successful distribution
and to keeping your customers coming back
to you. Getting the right product to the right
customers – on time – is the key. WMS is your
first and best “bang for the buck.”
Steve Hunyar is the EVP of E.D.G. Enterprises.
He has over 20 years of experience in the
warehousing and distribution industries. He
can be reached at shunyar@edgent.com.

Manufacturer Section
A Letter from the Leadership
As the newly elected president of the
Manufacturer Leadership Council, I am
excited about the opportunities we have to
make the Professional Beauty Association a
strong and unified voice for the professional
beauty industry.
Mergers and acquisitions have certainly
altered the structure of the landscape as
we have known it as our industry continues
to experience the effects of consolidation.
However, change, although generally met with
apprehension, can also bring positive and
much needed benefits and energy.
Through this time of change, it is important
to maintain a unified voice that preserves the
interest of the industry. PBA can be that voice
for us, but we need the input and support of
the members of the manufacturer section.
The unified voice of PBA was heard at this
year’s Cosmoprof North America (CPNA)
event. The show continues to grow and is
quickly becoming a premier event for our
industry. For all those that can’t decide to
publicly support the show or for those who
publicly criticize it, I would like to share my
position. The professional beauty industry
needs a buyer-to-buyer event, and CPNA is it.
We get so caught up in day-to-day routines,
but how often do we have the opportunity to
meet with our business partners and review
the strategic directions of our business? It
will not happen by sitting in your office, but
by getting to a location that has been put
together to foster the needs of our industry.
PBA’s team deserves many compliments for
their efforts on producing a successful show
that gives us as manufacturers an opportunity
to network and conduct business.
So what else can be done? PBA is a
membership-driven organization, so get
involved! Support the association by paying
your dues and getting the word out to the
companies that are not yet members that they
can help in creating a unified voice for our
industry. Most importantly, make sure you are
communicating your issues to your leadership
council. Feel free to call or email me with any
issues or concerns you have.
Lee Rizzuto Jr.
Conair Corporation
President, Manufacturer
Leadership Council
203-351-9175 | ulbin2it@aol.com
U.S. to Counterfeiters: Stop It!
In February, President Bush approved
a new anti-counterfeiting law, the “Stop
Counterfeiting in Manufactured Goods Act”
(H.R. 32). This law blocks loopholes in
the current law and increases the criminal
penalties for counterfeiting. The new law
makes it illegal for someone to make or
sell counterfeit labels or packages. Selling
counterfeit goods has been unlawful for a
long time. A gaping loophole allowed sellers
of the labels (imprinted with the phony
marks) to escape criminal liability, however
– just because the labels had not yet been
affixed to the fake products. That loophole
has now been closed.
This new law is another step in the
government’s efforts to protect trademark
owners and legitimate products. As President
Bush commented when he signed the new
law: “Counterfeiting hurts businesses. They
lose the right to profit from their innovation.
Counterfeiting hurts workers, because
counterfeiting undercuts honest competition,
rewards illegal competitors. Counterfeiting
hurts consumers as fake products expose our
people to serious health and safety risks.”
Besides closing the loophole to expose
makers of fake labels to criminal liability, the
new act also strengthens the criminal penalties
that can be imposed on counterfeiters. The
new law directs courts to order destruction
of the counterfeit products. Courts can also
require convicted counterfeiters to turn over
their profits and the equipment, and to pay
restitution to the legitimate businesses.
That means that the counterfeiters can be
ordered to reimburse the businesses for the
losses the legitimate businesses suffered
due to the fake products.
Counterfeiting continues to be a severe
problem—no surprise to companies in
the professional beauty business. The
U.S. Customs estimates that trafficking in
counterfeit goods costs the United States
about $200-$250 million each year. The
U.S. loses millions of dollars in tax revenues
from counterfeit goods, and counterfeit
items manufactured overseas cost American
workers tens of thousands of jobs.
Another government anti-counterfeiting
program is the “Strategy Targeting
Organization Piracy” program. This is an
effort coordinated by several federal agencies
trying to improve the protection for intellectual
property – trademarks, copyrights and
patents. As part of this program, Customs
has increased its efforts to stop fakes at the
United States borders; the Department of
7
Commerce is encouraging companies to
register their trademarks to increase publicity
and enforcement; and the Federal Trade
Commission continues to be on the lookout
for false or fraudulent representations. A
helpful website at www.stopfakes.gov gives
more information about this program.
Trademark owners and legitimate businesses
have responsibilities in the anti-counterfeiting
wars as well. The first step should be for
businesses to register their key trademarks.
The new law reinforces the wisdom of
registering trademarks -- although unregistered
trademarks are sometimes counterfeited,
the new law gives favored treatment to
trademarks that have been registered with the
U.S. Patent and Trademark Office. Another
way for businesses to improve their vigilance
against fake products is to make sure that
contract provisions specify the authorized
distribution channels: who you buy from and
who can sell your products. Those measures
will guard against fake goods being mingled
with the legitimate merchandise. We are all
soldiers in this battle to keep our marketplace
clean of counterfeited goods!
Deborah M. Lodge is a partner at Patton
Boggs LLP, a Washington, DC law firm with a
reputation for working closely with Congress
and regulatory agencies. Lodge specializes
in intellectual property and Internet law. She
represents a broad range of clients, including
electronic publishers, retailers, trade
associations, software developers, and other
new technology pioneers. You can reach
Lodge directly at dlodge@pattonboggs.com
or 202-457-6030.
8

International Buyer Program. This Cosmoprof

the power
of beauty
Cosmoprof North America
Makes Strong Showing
“The annual event has truly evolved into a
major global event.”
– Beauty Store Business
“If you own a beauty store or distribution
business and you have not attended
Cosmoprof, it is costing you a barrel of money
in lost sales.”
– Beauty Industry Report
Cosmoprof North America is the single most important
forum for beauty companies in or entering the North
American market. Held July 16-18 in Las Vegas,
the event brought 675 exhibiting companies and
more than 25,000 attendees – including importers,
distributors and global beauty leaders – under one
roof to showcase the latest cutting-edge cosmetics,
wellness, spa, hair care, skin care, nails, product
development and packaging products from every
corner of the globe. This year’s highlights include:
exclusive unites buyers and sellers around the world Cosmoprof
with the resources, contacts and data to build a
business. Delegations from Australia, Benin, Brazil, North America
Burkina Faso, Canada, Chile, Ghana, Ivory Coast,
Jamaica, Mauritania, Mexico and the United States T H E B U SINESS
had a unique opportunity to participate in this
program and present the needs of their individual O F B E AUTY
markets. Another benefit of the program is that
any attendee can sign up to be matched up with Las Vegas - Mandalay Bay
companies that they would like to do business with
and receive a pre-scheduled, private meeting. July 15 - 17, 2007
“[CPNA] brought together exhibitors and
international buyers and distributors…there
was an especially strong showing among
international exhibitors, with 25 percent of
exhibitors coming from abroad.”
– Women’s Wear Daily
First-Class Education. Setting itself apart as an
educational forum where companies can grow their Attend. Mark your calendar for Cosmoprof North
sales and knowledge at the same time, this year’s America 2007, which will take place July 15-17,
show offered more than fifty classes. Education 2007 at the Mandalay Bay Convention Center in
highlights included the Wellness Summit Keynote Las Vegas. Hotel and travel reservations open
Speaker Dr. Joe Dispenza, recently featured February 2007. Registration opens in March
in the movie “What the Bleep do We Know?!”; 2007. For more information, visit
nationally known marketing expert Larry Gulko www.cosmoprofnorthamerica.com.
on “7 Powerful Strategies to Break Through the
Marketing Clutter and Drive Brand Preference”;
Karen Post, the “Branding Diva” and Fast Company
columnist on how beauty professionals can master
brand building; and PBA Business Forum Keynote
Andrew Razeghi on how leaders control outcomes
“The buzz was all about the many new
in moments of uncertainty. products across numerous categories that
debuted at the show or will soon ship.”
– Beauty Store Business

Exhibit. Don’t miss the opportunity to showcase your

New
Publications
from the Nail
Manufacturers
Council
The International Nail Technicians Association
(INTA) and the PBA Nail Manufacturers Council
(NMC) have launched a co-branded education
program for nail salons, technicians and
consumers nationwide. Three publications are
currently available on PBA’s website:
Facts about Salon Nail
Polish Products for Consumers
Download: www.probeauty.org/nmc
Is nail polish safe? Are nail technicians
who use nail polish safe? This pamphlet
provides useful answers to common
questions about nail polish products. We
hope that it opens a positive dialogue with
your employees and customers.
Pedicure Equipment
Cleaning & Disinfecting Procedures
Download: www.probeauty.org/nmc
Improper cleaning of pedicure equipment may
lead to health safety concerns for salon clients,
intense regulatory investigation and a severe
threat to a salon’s profitability. Salon teams are
encouraged to incorporate these procedures
into their regular cleaning schedules and to
display the procedures in employee areas.
NMC Update: Methyl Methacrylate
(MMA) Liquid Monomers
Download: www.probeauty.org/nmc
This important update recommends that nail
professionals everywhere avoid the use of
MMA-containing artificial nail enhancement
monomers. This update explains the dangers
of MMA and how to recognize products that
contain the substance. (Because MMA is
prohibited, you are unlikely to find it on the
ingredient label.)
For more information, please contact NMC
Chair Eric Schwartz at erics@opi.com.
new products at the most important beauty business
show in North America. Exhibit and sponsorship
sales are up and running. Confirm your booth space
now! Visit www.cosmoprofnorthamerica.com to
download and complete a Request for Space. Or
contact Eric Horn or Ebony King at 800-468-2274
(480-281-0424) or email eric@probeauty.org or
ebony@probeauty.org.
The Tonight Show
Visits Cosmoprof
North America
NBC Television’s “The Tonight Show” with
Jay Leno sent comedian/correspondent
Alonzo Bodden (from season two of “Last
Comic Standing”) to make the rounds of
the Cosmoprof North America 2006 show.
Bodden explored the cutting edge of beauty’s
biggest technological advances for himself
by spraying on a tan, receiving a strip-free
wax and experiencing an LED relaxation
capsule. View the clip for yourself at www.
cosmoprofnorthamerica.com/tonightshow.

www.probeauty.org
 Salon/Spa Section
A Letter from the Leadership
TSA members have more opportunities than
ever to become involved PBA members! The
leadership team is actively pursuing activities
to get more members involved and educated.
TSA is proud to introduce salon track classes
within PBA’s Center for Business Education.
These classes are held in an intimate setting,
with no more than 25 people per class. Topics
are focused on the needs of TSA members
and their staffs. The facilitators are fellow TSA
members who have strong skills in the topic
area. Classes will be offered in Fall 2006 and
Spring 2007, and topics will change with the
needs of our members!
The first CBE salon track class will be hosted
in the PBA headquarters in Scottsdale,
Arizona from October 15-16, 2006. Join
Eveline Charles, TSA Leadership Council
member, and her management team for our
first class, Learn to Build a Salon Empire.
You can register for the class by contacting
Melissa in the PBA office at 800-468-2274
x128. Learn more on page 3.
We’re also excited about our increasing
government affairs activity. With the recent
hiring of Sam Leyvas, Director of Government
Affairs, we’re on track to further the advocacy
efforts of TSA. Please take a few moments
to read through Sam’s advocacy update in
this newsletter on page 2, and contact him
if you would like to become involved in our
Government Affairs program.
Finally, the Symposium committee has
put on their game face to put together a
spectacular program for Symposium 11.
With a theme of “Get in the Game”, the
committee has a full gameplan for a great
experience. Make plans now to join us in
San Antonio, January 20-23, 2007!
NeCole Cumberlander
Noire et Blanc
Vice President, TSA Leadership Council
216-991-9992 | skylan1103@aol.com
TSA
Symposium 11
get
in the
game
January 20-23, 2007
San Antonio Marriott Rivercenter
Pack your bags and your team for
the festive River Walk in San Antonio!
Symposium 11 is just around the corner
and promises to be the most memorable
event yet.
You spoke, we listened… We’ve made
Symposium more affordable than ever.
From now until the end of November,
buy two tickets to Symposium and get a
third free. Or treat yourself like an all-star
for the weekend with the MVP package,
which includes a Tuesday training camp,
special check-in, front row seating and
an “owners box” stocked with snacks
and refreshments.
Your Symposium Committee has focused
on TSA’s love of networking and the
request for presentations designed for
our team members. The lineup is jam-
packed with team-building sessions,
front-desk programs and round-table
discussions. There’s something for
everyone—owners, managers and staff!
Our Dream Team fast-fire panel led by
Melissa Yamaguchi includes industry
luminaries Dennis Ratner, Gene Juarez,
Eric Fisher, Eveline Charles and more.
Beacon is back and growing! Our
Beacon students are energetic, eager
and passionate about our industry. We
are providing opportunities for you to get
to meet these bright stars at the Career
Center and in networking sessions. Bring
your salon and spa marketing materials
to draft them for your team.
It will be Super Bowl season, so enjoy
Symposium’s theme: Get in the Game.
Bring your team and be an MVP! For more
information, log on to www.probeauty.
org/symposium.
TSA member and salon-owner
superstar Gene Juarez introduced us
to Lou Tice, chairman of the Pacific
Institute. An inspiring speaker, Lou
will address TSA Symposium 11 in
January 2007 with his keynote, “Get
Your Head in the Game.” Here’s a
sneak preview…
You Must “See”
It in Order to “Be” It
Did you know that you can “try on” the
future, just like you try on a new dress or
suit of clothes? Did you know that we all
rehearse the future with our thoughts?
When architects make drawings of a
building, they are helping people imagine
exactly what that building will look like.
The more precise their drawings, the more
completely they can “see” the building. In
fact, Freud compared thinking to a military
general, moving miniature figures over a
map before sending troops into action.
This is exactly what you do when you use
visualization and imagery to project yourself
into a future situation. You say to yourself,
“Now how do I want this to turn out?” And
then you very carefully, very thoroughly,
imagine yourself behaving in ways that are
most likely to bring about that end-result.
With visualization, you place yourself into
future situations and your imagination
provides you with a “virtual reality” of the
future you want.
The more anxious you are about the
situation and the greater your fears, the more
important it is that you control the kind of
rehearsing you do. If you don’t take charge
of your thoughts, you may be imagining
the worst possible consequences. You are
literally programming your subconscious,
and you will behave according to the
picture that is dominant in your mind.
You see, by controlling your thoughts –
your vision of what you want – you control
your future. Make sure you focus on and
imagine what you want, and not what
you don’t want. And remember, the more
rehearsing you do, the smoother the final
performance will be.
Lou Tice is chairman of the Pacific Institute. For
over 35 years, The Pacific Institute has taught
individuals and organizations how to manage
change, set and achieve goals,
lead more effectively, and think in
ways that create success. You can
reach Lou at 800-426-3660.
Owning Up to
Being the Owner
My journey in ownership has brought me to an exciting but uncomfortable place…a place
of accountability—for me. I used to pat myself on the back for completing a ten-hour day
of beautiful hair plus a burrito and payroll done at the same time during my hour lunch.

If I were to do that now, I realize that I’d be doing myself, my staff, my clients and my
business damage. I can still have the burrito and the hour break, but there are other
people who can do the payroll, and do the hair, and do the 10 hour days. My role is to hit
my benchmarks…as an owner. And, comfortable or not, they are all very measurable.

So what are these benchmarks? Below is a list of the things that I believe we, as owners,
need to be accountable for. The good news is, if there are things on the list that we hate
or are no good at, we can hire them done. However we can NEVER ignore them or put
them on the back burner for when we get time.

PERSONAL SPIRIT. This is the most important:
your health, your family, your hobbies. If you
don’t love it, you can not empower others to
love it.
• Life Balance. Work should not be your life.
In order to sustain your passion, don’t work
over 50 hours a week or 4 months in a row
without a break.
• Healthy Living. A good portion of your free
time needs to be dedicated to taking care of
yourself. That means lots of sleep, exercise,
and regular check-ups.
• Inspired Enthusiasm. What new ideas are
you bringing to your team? Take a class.
Learn something new. Look outside the
industry for inspiration.
• Cash Flow Positive. I can show a profit but
have no cash. Cash flow is what sustains a
business. If you don’t understand cash flow,
pay someone a couple hundred dollars or
give them a gift card to teach it to you.
• Saving for Lean Months. You will learn at
your cash flow lesson when and how to save
based on the ebb and flow of your business.
Pay yourself first!
CONSISTENT GROWTH. If you don’t grow,
you will wilt and die on your feet standing in
a pile of hair.
• Solid Marketing Plan. You should be
working on your marketing plan at least
six months forward in the future. Budget at
least 2% of revenue.
• Juicy Morale. Create a culture free of
paranoia where people feel as if they have
a voice and make a difference.
• Inspiring Education Program. It takes
several days a month to put together a
program that keeps people at all levels
inspired. The senior stylists need a higher
level of inspiration.
• Attractive Benefits Programs. Another
important focus to stay competitive—you
need to think outside of the box on what
you can economically offer to be unique.
Remember, your job is to do only the things
that no one else in your business can do.
Don’t just work there. Own it.

BOTTOM LINE PROFITABILITY. This is the • Lots of Innovation. Clients and staff leave
owner report card. You can’t avoid this until because they get bored. You need to be the
the end of the quarter. It will be too late! idea generator to keep people inspired.

• Weekly Focus on Results. You should be
looking at and strategizing your revenue,
retail and service per ticket, and multiple
unit sales weekly.
• Relentless Budgeting. Likewise, your
budget is your control for expenses, and it
should be taped up right in front of your face
for daily accountability.
• Intense Forecasting. At least an hour a
week should be spent forecasting the future
by looking at the past. Remember October
last year? How are you going to fix it this
year if you wait until it arrives?
• Aggressive Recruiting. Everyone leaves Inez Gray is the dedicated visionary
eventually. If you wait until they do, it’s too late. behind Habitude, one of Seattle’s
premier salons/day spas. Inez’s
personal mission statement is to joyfully inspire
HIGH CLIENT RETENTION. If your salon
others. You can reach Inez at inez@habitude.com.
is a revolving door, it is your problem and Or you can find her insights—and those of other
costing you much more than coming off the successful salon owners—on the TSA listserve. To
floor. I promise. subscribe, email info@probeauty.org.
• Staff Connects and Accountability. It’s
simple. Your job is to make sure they do
theirs. It’s not personal; it’s business.
• Consistent Service Experiences. Clients
need to have their expectations exceeded
every visit.

HEALTHY BALANCE SHEET. If you ever want • High Retail Sales. It’s a fact: The more
to sell it or borrow against it, this better look they buy, the more invested they are in your
good. business and the more often they return.

• Debt Free Operations. Put it on your card HIGH STAFF RETENTION. If it is a revolving
for air miles, but pay it off in full monthly. door it is your problem and costing you much
more than coming off the floor. Sorry, same as
above.

www.probeauty.org

Health Insurance Increases
Improve but Remain
Burdensome for Many
It’s hard to imagine a time when we would
believe less of more could be a good thing.
Yet, when it comes to health insurance
premium increases, that is precisely what
gives employers a big sigh of relief. Annual
rate increases continue to shrink below the
10 percent figure, and employers are now
considering what opportunities they have to
control expenses even more effectively.
According to the Watson Wyatt 11th annual
National Business Group on Health, the
best-performing companies are achieving a
3 percent median cost increase from 2004 to
2005 and from 2005 to 2006. When compared
to an annual 11.5 percent increase from
underperforming peers, the gap is surprisingly
– logical. Bottom line, you can ask yourself:
how do I get there?
For 2007, employers are looking more closely
at how they purchase coverage and what tools
employees need to help themselves more
effectively procure healthcare. Both of these
events will directly reduce the burden of health
insurance rates.
DRIVING THE RIGHT VEHICLE?
For the vast majority of employers, insurance
companies provide three different services.
First, they have negotiated rates with healthcare
professionals, hospitals and pharmaceutical
manufactures to obtain “wholesale” pricing.
Second, for most employers, they are insuring
all or a significant portion of your risk. Finally,
the insurance company answers employee
questions, processes claims and determines
benefit eligibility.
Premiums, the rate that employers pay
to provide healthcare coverage to their
employees, are generally 86% claim related.
Think about that – 86 cents of each and every
healthcare dollar is tied to the payment of
services including doctor’s office visits, lab
tests, hospitalizations and prescriptions.
Best-performing companies show a greater
willingness to survey their employees’
utilization patterns and consider which vehicle
provides the most cost effective “wholesale”
pricing solution.
Cleveland, Ohio is a perfect example of such
a marketplace. Defined by two (2) competing
hospital systems, Cleveland insurers pay
different rates to each provider. While both
healthcare systems may be a ‘preferred’
provider, one is clearly more cost efficient.
Unfortunately, in the short term, the efficiency
of a healthcare system and the rate for services
covered by your insurance company don’t
always equal the lowest rate on your renewal
spreadsheet.
Considering that 86% of your healthcare
expense is tied to the vehicle’s ability to secure
the best cost of services on your behalf,
doesn’t it pay to determine which healthcare
vehicle would provide your staff with the most
cost efficient solution?
The market is predictable: over the long-
term, the insurance provider with the most
cost effective model for securing services on
behalf of your company will deliver the most
aggressive pricing.
WHAT TOOLS DO MY
EMPLOYEES NEED?
Just three years ago, industry experts believed
that the Health Savings Account (HSA) could
inspire real consumerism. The theory was that
the only tool employees needed was to be in
charge of their own healthcare account and
have a backup information system to support
their decision processes.
Today, experts and employers agree that
healthcare tools are equivalent to employee
engagement ideas. Engaging the employee
and their dependents transcends the type of
plan you offer, be it a Health Savings Account,
High Deductible Health Plan or a traditional
deductible and copay PPO.
Best of class employers use leading
edge plans designed to achieve three key
objectives: increase employee awareness of
their healthcare coverage and cost, promote
a more appropriate use of services and
perhaps most important: create incentives for
employees to improve their health and lifestyle.
Meeting these objectives can only be done if
we provide employees with the right tools.
First, increasing employee awareness of
healthcare coverage and cost requires a full
time benefit communications strategy. Gone
are the days where employers simply send
out the annual open-enrollment memorandum
explaining how much more coverage will
cost. Today’s best performing employers are
increasingly using monthly benefit newsletters,
promotional wellness programs and year end
benefit value statements to communicate to
employees the true ‘worth’ of their coverage.
Second, employers use promotion
opportunities as a forum for consumer
education. The message is simple: receive
care when necessary – avoid abuse and over
utilization. One example involves a recent
national healthcare journal that documented
nearly 4 out of 5 emergency room visits as
11
unnecessary and far from life-threatening.
To address the issue, leading edge employers
promote responsible utilization by embracing
a three pronged strategy to: (a) make 24-hour
ask-a-nurse services available, (b) educate
employees as to appropriate severities
requiring emergency room care, and (c)
implementation of significant penalties for
non-emergency use of the emergency room.
Regardless of the application, the remedy
is consistently to make alternate resources
available, educate for appropriateness and
then penalize non-compliance.
Third, employers are finding new and creative
ways to help members help themselves.
Clinical studies show that lifestyle can impact
a population’s claim utilization by up to 13%.
Employers are embracing benefit initiatives
that incent smoking cessation, appropriate
body mass index, physical fitness and blood
pressure/cholesterol management. By tying
coverage levels to a participant’s quality of life,
employers are beginning to improve participant
wellness and reduce healthcare expense.
SUMMARY
While increases less than 10% may appear
to be breath of fresh air for employers, cost
increases remain an incredible burden for
employees and employers. The days of
changing carriers annually or even bi-annually
may be coming to an end. Employers will be
forced to begin thinking longer-term, aligning
their coverage with the insurance provider
(vehicle) that can deliver the best long term
services procurement.
Participant education in the areas of cost,
quality, utilization acceptability and healthy
lifestyle will continue to redefine the market’s
efforts to move toward consumerism.
Whether you purchase direct from the market
or through a broker or consultant, expect that
your representative will be able to assist you
with the assessment of carrier viability and
development of a strategy and expected
rate of return from consumerism objectives.
Employers who push their consultant in this
direction will be better positioned to control
expenses and enhance employee outcomes
and benefit satisfaction in the future.
Kyle M. Anthony is Vice President of Behnke
& Company. Founded in 1918, Behnke is a
leading risk management consulting firm with
specialization in property and casualty, captive
management and employee benefits. You can
email Kyle at kanthony@behnkeohio.com.
Benefit Highlight
produced by PBA
ISSE takes place February 5-7, 2007 in Long
Beach, California. The biggest beauty show
on the West Coast, ISSE is produced by the
Professional Beauty Association. Revenue
from the show supports association
education, government affairs and other
industry initiatives.
The new International Fashion Theater will
be packed with inspiring performances
by some of the industry’s most talented
platform stylists and manufacturers, hailing
from the U.S. and abroad. ISSE also hosts
fabulous complimentary education, a Bridal
Theater showcasing the latest in up-dos
and elegant styles, nail competitions and a
show floor filled with quality manufacturers
showcasing the latest products.
For more details, please visit www.isse-shows.org.
Professional Beauty Association
15825 North 71st Street, Suite 100
Scottsdale, Arizona 85254
800.468.2274 (480.281.0424)
www.probeauty.org
Valuable education.
Quality manufacturers.
Professional atmosphere.
The ISSE commitment.
Take advantage
of PBA member benefits at ISSE!
Member Benefit for Attendees
PBA members are entitled to two
complimentary tickets to ISSE. Call 800-468-
2274 (480-281-0424) to request your tickets.
Member Benefits for Exhibitors
PBA members who exhibit at ISSE receive:
1) $50 off the price of a 10’x10’ booth; 2)
300lbs. free drayage; 3) preferred booth
placement; 4) 40-60% off sponsorships and
advertising; and 5) a free bold listing with
PBA logo in the on-site show directory. For
more information on exhibiting at ISSE, or to
become a sponsor, please contact Nathan
Miner at 800-468-2274 (480-281-0424) x124
or email nathan@probeauty.org.
NAHA Haircolor Finalist Karen Melay