Gabriel Gonzalez
ENGL 2413.010
Thinking along the lines of experience, if I were to start an enterprise of my own, such an enterprise would be a retail hair salon. The longest job I have ever held was a receptionist position at a local hair salon I feel I would be most successful in running such a business.
There are two types of salons. The first type of salon is the value type, which greatly outnumber the other type of salon and are typically franchise operations. The price of services provided is always considered before the fashion value. An example of a value salon would be Great Clips. The second type of salon is the fashion salon, which are typically independently owned and operated, are located in higher-end retail outlets, and place fashionable value of service before price. An example of a fashion salon would be Cool Cuts. Since the salon where I happened to work was a value salon, I will consider the value salon model for my hypothetical enterprise.
Foremost to the success of a value salon is location. Unlike with a fashion salon, where the customer comes to the salon, the value salon must go to the customer. With location such a significant element, the most successful value salons are located proximally to large grocers and shopping outlets, so a small business space would be leased in one of those two areas. Also, space is leased at prices relative to its size and location, so the cost of space can range between a few hundred dollars to a few thousand dollars a month.
Second to the success of a value salon would be franchise option and franchise choice. Fashion salons can rely on word-of-mouth for advertisement, but value salons typically will need the large ad campaigns of the franchise company to attract new customers to the salon. Additionally, value salon franchises differ on the services provided beyond the haircut, such as hair coloring and hair perms. The cost of these additional services, as well as the local demand for specific additional services would determine which franchise I would choose. Also, typical franchise fees for a value salon are a one time cost of around twenty-thousand dollars.
Third and what would seem the most obvious element to the success of a franchise value salon operation, is the staff selection. During downturns and periods of increased competition, the ability of the stylists to provide an exceptional service for the salon prices, as well as the ability to the managers and assistant managers to adequately run the salons makes a huge difference on the long-term outlook for any franchise operation. Also, the typical pay rate for stylists is under ten dollars, with the addition of volume bonuses and tips. Managers and assistant managers are typically paid more than ten dollars, as they understandably bring in less income from volume bonuses and tips.
Some of the problems I can anticipate with a value salon operation would be high turnover, security, and local downturn profitability. Out of an initial stylist staff of twenty, less than half of the original stylist staff will probably t the two year mark, and only one or two of the original staff will remain at the five year mark. Such high turnover is caused by competitive pay offered by competing salons, as well as a myriad of other issues such as stylists leaving for more advanced positions in the cosmetology field. Another potential problem is security, where, because of an often all-female staff, the salon would be at a greater robbery risk than other types of retail operations. Implementation of security and monitoring fees can adversely affect profitability. A final potential problem is local downturn profitability. While the startup and operation costs described previously only total a few ten-thousand dollars, additional miscellaneous startup and operation costs such as insurance and inventory costs can run the final bill well over one-hundred thousand dollars for a multi-salon operation. Payments on the business loan necessary to finance such an operation can become difficult to make when monthly business volume can fluctuate up to eighty percent greater or less than the previous months earnings.
However, with the right goals for a salon operation, business success can become almost a guarantee of entering the market. Records in the salon market are rarely broken, so a salon with the record of the highest haircut volume can enjoy business many times over what franchise ad campaigns can bring in. Additionally, employing stylists who have broken records for haircuts in any interval of time can often greatly increase an individual salons business.
Lastly, I would like to stress that the ultimate goal for a value salon is volume. Often, getting the volume of haircuts involves both bringing new customers in and keeping them coming back. With a mission statement such as “Working towards the highest annual haircuts in the city”, I feel that I would be most successful with the opportunity to open a franchised hair salon.
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