Mahisha Dellinger released her memoir in February, “Against All Odds: From the Projects to the Penthouse,” recounting how a young girl who grew up in the Meadowview neighborhood of Sacramento triumphed over adversity and built a multimillion-dollar hair-care business.
Dellinger, now 42 years old, founded her company, CURLS, in 2002 after a disappointing foray into corporate America.
“This manager … wanted to get rid of me despite all my hard work and success,” Dellinger said. “I really felt afraid. I was a single mother. I had a child to take care of, and he was looking to get rid of me. My financial future sat in his hands, and I realized that I never want anyone else to own my destiny, even temporarily. I didn’t like that uncertainty. That inspired me to start my own business.”
Her Horatio Alger story ended its local chapter two years ago, when Dellinger realized how much of her personal and business income would go toward paying state taxes. It was then that Dellinger made a dollars-and-cents decision to relocate her business to Frisco, Texas, from Elk Grove.
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In the years before she started CURLS, Dellinger set aside every bonus and extra paycheck, saving up $30,000 to hire a cosmetic chemist and begin testing out the right formulations for a shampoo, conditioner, moisturizer and curl cream.
At the time, Dellinger had decided to leave behind what she viewed as the harsh, permanent relaxers that many African American women use to straighten their hair. Instead, she was going to go natural. She wanted products she could use on natural hair, she said, but there weren’t many options on the market.
“I would mix things at home, trying shampoo from this brand and conditioner from that brand,” she said. “I was making up oil concoctions. After doing some research, I saw that other women were looking for products in that space, and I decided to capitalize on it.”
After contracting with the chemist but just before a scheduled launch of her products, Dellinger realized that there also weren’t many options for children and quickly added a kids line. She started with four products for women and four for children. Today, she has 18 different products.
She originally started out selling the items on her website, www.curls.biz. She used money from her day job to support her household and poured every dollar she earned from selling her products back into the business.
“I started CURLS back before social media exploded,” said Dellinger. “I used a lot of gifting and sampling to get it in the hands of consumers. I also went to a lot of events and trade shows. It was definitely a grass-roots effort.”
Eventually, Dellinger made her way to trade shows such as CosmoProf in Las Vegas and the Bronner Bros. International Beauty Show in Atlanta. There, she got her products into the hands of stylists and salon owners. Both large chains and mom-and-pop establishments gave it a try. Her first big client was Total Beauty Experience on Arden Way.
CURLS’ sales rose by 10 percent, 15 percent or 20 percent annually back in those days. Then, in 2009, Dellinger got the opportunity she’d been waiting for: Target buyer Linda Sullivan gave her a shot at the big-box retailer’s millions of customers.
“She had an ethnic category that was stale,” Dellinger said. “It wasn’t moving. She had relaxers and Jheri curl products. She invited a few brands to come and meet with her, and we were one of those initial brands. ... We had 30 minutes to pitch, and two minutes into our meeting, she said, ‘I love it. I’ll take it all.’ ”
Target gave the four brands shelf space in just 105 of its stores, however, telling them that if they found a market, they would be allowed to expand to more stores, but if not, they wouldn’t be renewed.
“By then, social media was around, and we used Facebook and Instagram and other sites to promote the brand,” Dellinger said. “We went from 105 stores to 450 and then from 450 to 800. Then we went nationwide, and Linda brought in more brands to make it truly a destination. She gave us our first break. Before that, other retailers weren’t interested in that market.”
Today, Dellinger has added select Rite Aid, CVS, Walgreens, Sally Beauty Supply and Walmart stores to the list of retailers she supplies.
As CURLS took off, Dellinger said, her tax burden grew. Her accountant laid out a side-by-side comparison of how much she was paying in California vs. how much she would pay if she moved her business to Texas, where her manufacturer was based.
Dellinger declined to provide her accountant’s information, but Mark Bellows, a tax partner at Roseville-based Gallina LLP, said the savings can be substantial.
“California’s personal income tax can be as high as 13.1 percent,” said Bellows, who also co-hosts a Wednesday morning talk show on Money 105.5 FM. “If someone can move and avoid it … that’s a big gain in income. Texas is the same as Nevada. Neither has a personal income tax.”
The tax differences don’t end here. If the company is an S corporation, then it will pay a tax of 1.5 percent in California vs. a franchise tax of about 1 percent in Texas.
If it’s a C corporation like many of California’s largest businesses, Bellows said, it will pay a tax of 8.84 percent, but in Texas, it would pay only 1 percent. Bellows said that’s one reason why Texas has been an attractive option for some Sacramento-area companies such as Waste Connections, which moved from Folsom to Texas in 2012.
Dellinger loves her new home base north of Dallas, she said, and the airport has nonstop flights to many of the cities where her largest customers are located. In “Against All Odds” (Brown Girls Publishing, $15, 174 pages), Dellinger recounts memories of drive-by shootings and home invasions in Meadowview that left friends dead before they reached age 18.
School became a refuge for her, Dellinger said, and it gave her the tools to reshuffle the cards she was dealt. After Valley High School, she said, she earned a bachelor’s degree in business from Sacramento State. Her memoir, she said, is meant to be inspirational.
“If I could get through that and make it out on the other end, then anyone can,” Dellinger said.
Editor's note: An earlier version of this story included an incorrect percentage for the highest California personal income tax rate. The correct rate is 13.1 percent.
Call The Bee’s Cathie Anderson, (916) 321-1193. Follow her on Twitter @CathieA_SacBee.