When your business is also a factor

When starting a small business of your own such as a hairdressers or a corner shop, many things must be taken into consideration in order to make your business venture a success. Firstly the business idea must be planned through on paper in order to get the idea clear in the mind of the owner/s. Without proper planning the business is already more likely to fail as a business plan shows things such as the basic idea, marketing plans, any problems and the finance needed to start-up.

A business plan is essential to present to a bank in order to get a loan for set-up costs. A good location for a new business is almost as important as having a good idea in the first place. If your new hairdresser’s shop is located too near to an already established hairdressers then the competition may be too much for your business to handle and therefore it will fail. On the other hand if your business is located too far away from any other shops then people may not notice it and therefore failure may occur once again from lack of customers.

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Any new business such as a hairdressers must be able to gain a competitive advantage over any competition they may have in order to make customers come to them instead of to their regular hairdressers. A new business has a disadvantage straight away over its competitors as older businesses already have established customers. New businesses must lure customers to them by offering services that the others don’t. For hairdressers this may be a home service or ear piercing. Advertising your business is also a factor that is likely to lead to success.

Advertising can be shown as a vital factor to discuss in order to let the general public know about your business and to educate them on the services you offer. Without advertising in any way, consumers won’t know that your business exists and so a new hairdressers will suffer greatly on profits. Knowledge of the business is important whatever part of the market you enter into. An example of just how important this knowledge is could be a person setting up a locksmith’s shop without any prior knowledge of locks at all.

This business would fail as the person wouldn’t be able to fix locks that were bought to them and therefore people would go elsewhere. The same concept applies to a hairdressers shop, as if you know nothing about cutting hair then your customers will be disappointed with the results of your service and so go elsewhere in future. The loss to profits would mean that the business would fail. Trained staff can help to sort out the above problem. Even if you yourself have no prior knowledge of cutting hair then employing people who do can help to make this no problem.

However, with a new business, especially a small hairdresser’s shop, the chances are that employing more than 2 people at first wouldn’t be a plausible idea, as it would cost too much with no profits coming in at first, therefore the business is likely to fail. As a result the staff you would employ must be trained already in order to cut down on the cost of training new people. Market Segmentation can be useful to a new business by identifying their target consumer and helping to recognise a niche in the market. A customer profile is useful to have when deciding things such as prices and other services.

For example a niche in the market may be older women, a hairdresser’s that caters for older ladies at a reduced rate may be supplying a niche market and could generate business that may not have been addressed before. Marketing mix is a great tool that can help a new business to plan properly. A new business can use it to help them choose the right factors to make their business a success. It covers the main areas of any business and includes: – ? The pricing strategy – The prices in a hairdresser’s most be low enough to compete with other businesses but must also be high enough to cover any overheads and make some profit.

? The location of the business – The business must be in a good location in order to be noticed by the public and not be affected too much by local competition. ? The product/service itself – Gaining a competitive advantage is vital to achieve an edge over competition. Offering new services at lower prices is a good way of making the service different from others. ? Promotion – Advertising is a key factor to success and a business must choose the right type of promotion in order to let as many people know about the business with the lowest possible costs.

In particular it may be useful to realise that word-of-mouth costs nothing and customers that are satisfied with your business may pass on this information to their friends and family. Market research can be seen is a big factor that will lead to the most likely success of a new business such as a hairdresser’s shop. If, before setting up the business, the owners carry out market research into the wants of the consumers then they will be more likely to be able to offer the right kind of services at the right kind of prices.

Market research would help with the marketing mix, as it will show for example possible new services to offer and the prices people are willing to pay. Creating lower overheads in the first few months of opening a hairdresser’s shop could also be a factor leading to the success of the business. This is because less of the profits are taken up with running costs, and therefore the business is more likely to be able to pay back any loans from banks. With the business able to keep up any repayments on money owed, it is less likely to go into debt and therefore is more likely to survive.

A very easy way of lowering overheads is to do most of the work yourself in the first instance and employ no others. This way overheads are greatly reduced by not having to pay other’s wages, also you would be prepared to take lower wages yourself during the set-up period. In conclusion the factors most likely to lead to the success of a new hairdresser’s shop are things such as the location, prior knowledge of the industry and hairdressing skills, promotion, product differentiation and gaining an advantage over competitors. If all these are achieved then the business should be a success.