September 10, 2014 3:00pm by David Farrar

A great small business story

When the Christchurch earthquake left hairdresser Michele Robertson and her friends short of a workplace, she decided to open her own.

Few 23-year-olds saw opportunity in the destruction of their city. But Robertson, who has worked in salons since she was 16, had always wanted to own her own.

“I was naive enough to think it could work,” she says.

“And it did.”

But Robertson was not without her naysayers.

“The first meeting I had with the bank manager – the earthquake had just happened, he might have been having a bad day – but the way he spoke to me was so degrading,” she says. “I went home and nearly gave up.”

Even reality television show host Tabatha Coffey, of Tabatha’s Salon Takeover, said Robertson was “crazy” when she met her at a hairdressing event at the Sky Tower.

But Robertson figured, “If I failed, I had the rest of my life to fix it. If I succeeded, I’d set myself up for a really good career.”

She opened Balayage, in Addington, five months after the earthquake in July 2011, thanks to $15,000 loan from her parents via the bank.

Mentors such as former boss Sonya Mbonyinshuti and uncle Jon Weir, who owns a construction company in Christchurch, encouraged Robertson to learn from their failures, as well as their successes.

Their main advice?

“Not seeing money that comes into your bank account as yours. It’s not,” Robertson says.

Following this, she paid herself about $200 a week for the first seven months and put most of salon’s revenue into a tax and GST account. She worked six days out of seven, and lived at home.

After one year, Robertson owned Balayage freehold and had a $2000 surplus, which she gave to local charity Te Mapua Child and Youth Trust.

That’s a great story. We need more people like Michelle willing to give it a go. Her experience of very low incomes for the initial year is not unique. I know of an advertising agency where the owners were paying themselves less than the receptionist, in a bid to keep it going.

This is one of the reasons why we should be very wary of employment law changes that will impose extra costs on small businesses. Many of them start off on the verge of failure, and it would not take much to push them over the edge.