Want to start a hair business but don’t know where to begin? You’re in the right place!
Whether it’s becoming a mobile hairdresser, opening a high street salon or creating your own product or service. Here’s a detailed step-by-step guide on the things you need to know before you set up your hair business.
Logos Come Last!
The biggest mistake people make is spending too much time on visuals and designs such as logo’s, websites, flyers and business cards etc. Yet, often there is no real substance behind their business idea.
Things such as logo’s and websites can come anytime after you have decided on what, how, and who your hair business is going to be.
So before you spend hours on business names, logos and websites. Keep reading to help you fulfil the steps to building a successful business…
Put Pen To Paper
Successful businesses come from planning. It’s important you take your idea and put it down on paper. You need to be able to write you business on 2-side of A4 paper.
This will only be for your reference, to help you clarify your ideas going forward and help others understand your business idea.
Value Proposition & Unique Selling Points
The value proposition is the “why” someone should buy your product or service. It’s what sets you apart from your competition and elevates your business to compel people to use your product or service. Value propositions are also known as your unique selling point, also known as U.S.P.
This article will detail how to construct your value proposition and build out your business idea to a functioning entity that you can grow into a success.
Your U.S.P (Unique Selling Point)
On your A4 piece of paper you need to be able to tell people what makes you different from all the others? If it’s a service or product you offer, why should they choose yours?
Remember, if you’re interested in started a business, especially in the hair and beauty space, it’s a highly competitive market so you’ll need to stand out from the rest.
Unique selling points can vary on a number of factors, think of the USP’s that make your business different. Here are a few unique selling points you can consider for your business:
1. Service or product quality – is your service or product offering a higher/better quality than your competition? If so, why and how? For example, GHD’s are known as high quality straighteners, robust and used by the celebrity stylists across the globe. Their quality is what justifies the price they charge.
2. Innovative – are you the first in the industry to do something, is what you’re offering the first of its kind? Is there anything already on the market like what you offer?
A good example of an innovative business is the Dyson Hair Dryer. Dyson is known as one of the leaders in household cleaning products (hoovers and vacuums). Yet the company diversified into creating their own hair dryer, that dries hair faster using no extreme heat and a new and innovative sleek design that was unlike anything else on the market.
3. Professionalism – Everyone wants a professional and seamless experience. How are you going to present yourself and your business?
How do you want people to view you? This is a large part in gaining, retaining and getting new and existing customers. For example, If you want to start your own hair service such as mobile hair dressing, professionalism may be deemed by customers as being punctual (on time) all the time, greeting customers in a particular and familiar manor on arrival; having all the equipment and tools required to treat the client; explaining the service you’re going to be providing to the customer to set a level of expectation, completing the job on time and the speed in which the customer gets what they have requested.
If you sell a product, does your packaging, branding and customer service experience reflect what you offer to your customers in the way of a professional outlook? This is what we are referring to when we talk about professionalism.
4. Price – Is what you offer competitive on price? Are you cheaper than your competition or are you more expensive, and why?
Remember, being cheap doesn’t mean people will buy your service or product. Price your product at what it is worth, do some market research, ask people (who you do and don’t know) what they would be prepared to pay for your product or service. You may find you need to charge more or less based on your market research feedback.
How To Price Your Product or Service
Your pricing should do 4 things:
1. Be Price Competitive – the hair business is a very competitive space, as a result, a lot of businesses offer cheaper prices as an incentive for customers to purchase. Remember, customers have other pains (e.g. time, communication, professionalism etc); find out what pains your potential customers are and see if you can add value to justify the price you charge. Don’t be cheap for the sake of it unless it fits your business model. Generally speaking, the cheaper your product or service is, the more you need to sell, which requires more time, work and money.
2. Generating Healthy Revenue– the price of your product or service needs to be reasonable for both you and the customer. Can you sustain charging that price on an on-going basis? If yes, great! If not go back to the drawing board and see where you can add value to what you offer to justify the price of your product or service. Remember, you need to understand how you are going to get paid; cash, card, subscription, direct debit, pay-as-you-go.
3. Generate a Profit – you need to make a profit on what you are selling. If it’s a service you offer are you charging enough for your time, plus profit? If it’s a product you offer, are you covering the cost of materials, your time and any fixed overheads such as rent and electric etc.? You need to work out the profit margin you’ll make off of each customer. This is vital to any hair business! (If there’s no profit, you have no business).
4. Customer satisfaction – Do you want to be known as the reliable service or product everyone goes to? That keeps customers happy all the time no matter what? Then don’t under-estimate the power of customer satisfaction.
Customers who are repeatedly satisfied with a product or service are 6 to 7 times more likely to purchase from you again. Meaning you won’t spend any extra money to acquire new business, which, in turn increases your profit per customer.
Happy customers are also 10 times more likely to refer more customers to you, therefore helping grow your business. Satisfied and loyal customers are also more likely to pay a higher price or accept price increases because they understand the value your business offers in terms of a service.
Note: these are not the only types of unique selling points found in successful businesses, have a think about what sets your business apart from the rest, there are many more. Do you do a few or all of the things mentioned above?
Next we’re going to work out how you communicate and market your product or service is to your potential customer… And who your ideal customer actually is!
Market research is crucial to understanding if anyone want’s what you have to offer. Many hair businesses fail because there is simply no demand for what you’re selling.
Unless you are disrupting the market with something completely new and never seen before, you’ll need to use market research as a basis for understanding the potential size of your market.
Generally speaking, the larger the potential market, the more likely you know people want your product or service. E.g. if you are selling natural hair oils, you’ll need to find out who, and how big the “Natural Hair” market currently is.
If you are disrupting the market with something brand new and innovative, then you need to do research into the market you wish to disrupt. E.g. Uber disrupted the Taxi market.
There are two types of market research:
Primary research – this is research you have conducted yourself, it is a more time-consuming form of research. Primary researches are activities such as questionnaires, surveys and focus groups.
Secondary research – this is an easier method of gathering data, as the information has already been sourced by others in the form of reports and surveys that can generally be found in print or online.
Market size – How big or small is the market you are trying to break into? Remember, if you’re targeting people locally, this will be a much smaller then a national or global market.
Market research will also help you financially forecast what your business could potentially make each year, down to the month, week and even the day.
Example Market Size Analysis
Secondary market research found online shows the market size of people wanting to purchase black hair products in Birmingham at 190,000 people. This market is valued at £19 million per year in total spend. Suggesting each person spends £100 a year on black hair products each year.
As a new business, you want to win 1% of this 190,000 person black hair market each year. Which means you’d need to do 1,900 sales, this would make your business £190,000.00 per year.
Note: these figures are just for demonstration purposes. They are to demonstrate how your market research can help you financially forecast and set goals for your new hair business. Once you start generating sales within your business, you will be able to use your own company data to financially forecast for the future.
Competition – Is there anything out there on the market that already does what you do, or something similar? Depending on what you plan to achieve with your business, your competition may vary. For example if you are running a local business to target local people. You will only need to focus on local competition. If you want to compete with companies on a national scale, you will need to consider competition from across the nation. Generally speaking, the bigger the geographic location of your business, the more competition you will face.
Customer Profiling & Marketing
Now you have done your market research, you’ll need to know the customer and who will you be selling to. This is very important to ensure you promote and sell to the correct customer, and spend less time targeting the wrong people.
How to build your “Customer Profile/Persona”
Your customer profile should be made up of the following:
- Age (a range – for example 18 – 25)
- Gender (male, female or both)
- Geography (where are your customers located? Country, City, Town)
- Preferences (What does your ideal customer like – what are their hobbies, interests?)
- Average spend (how much does or would your ideal customer spend)
- What channels does your ideal customer access (online or offline media).
- Any other key factors and similarities you think you should attribute to your customer profile… add it!
See our basic example shown above
Marketing Your Business
Believe it or not most businesses fail based on 2 things, money and marketing. They run out of money and don’t know what to do with their marketing, or spend too much time and money promoting their products and services in the wrong place to the wrong people.
The Marketing Mix (4p’s)
Marketers refer to the “marketing mix”, which is also known as “The 4p’s”. These 4p’s refer to:
- Product – what is the product or service you are selling and how are you going to communicate its benefits to the customer?
- Price – What are you going to sell your product or service for, and why? How much is it going to cost you to market and promote your service or product to generate a sale? (gross & net profit). What does it cost you to generate a customer (cost-per-conversion)
- Place (location) – Where are you planning on selling this product or service? For example, your own stores, high street retailers, your own online website, apps, through online retailers.
- Promotion (marketing) – How are you going to promote or market your product or service to generate sales?
The 4p’s will help you understand how and where you’ll need to market your products or services. You need to be able to clearly define and answer the 4p’s questions to begin understanding how you are going to get to your product or service to your potential customers at the lowest cost possible.
This is why market research, customer profiling and marketing is very important. Knowing what your potential customer looks like, where to find them, and how to market to them is crucial to making a profit and growing your hair business. The more detailed you can be with your marketing plan the more efficient you’ll be promoting your new business.
You’ll need to know your channels to market to reach your “ideal customer’. Here you will need to decide whether you’re going to use traditional or digital forms of marketing, or a combination of both.
Traditional offline forms of marketing are:
- Print Newspapers and magazines
- Business cards
- Offline adverts in shops and high streets
You may find digital marketing methods work better to engage your target customer.
Some digital forms of marketing are:
- Social media (Facebook, Instagram, LinkedIn, WhatsApp, Snapchat and more)
- Influencer marketing
- Email marketing
- Affiliate Marketing
- Online Newspapers and magazines
- Google Ads
- Bing Ads
Note: there are many more marketing channels available, have a look around and see what works for you. Remember you should put together a marketing plan that has an appropriate mix that suits your target customer. Not everyone uses social media and subscribes to influencer marketing, some people may prefer a physical item such as a flyer or leaflet that they can take away and look at in their own time. Refer or read more about your customer profile to help you decide where you market. Remember, you will need to market your business consistently through your chosen channels.
Know your Numbers (Finance)
To run a successful business means you must be able to generate sales (revenue). This is why you need to know your numbers!
The essential financial numbers you need when starting your hair business are:
- Product or service sale price – what are you going to sell your product or service for?
- Cost price – how much money, time and material will it cost you to provide the service or product? Remember to factor in the cost of marketing and PR.
- Gross and net margin – what is the profit you’ll make before costs and after costs are deducted?
- Break-even point (at what point will your sales equal your expenses)
- Gross profit and net profit – how much money will you make when all your expenses (cost are deducted).
Once you have this financial information about the product or service you are going to be providing, you’ll be able to plot them into a financial document to help you track, assess and grow your business. The essential documents you will need to do financial forecasts for your business are:
- A start up budget
- Cash flow forecast
- Break even analysis
- Balance sheet
With these documents you’ll be able to financially forecast what your business will look like over the space of weeks, months and years.
Before you can get creative and start doing all the fun logo designs, website builds and business card printing, you need to have the following checked off:
- Your product or service explained in 100 words or less
- Your product or services unique selling points
- Market research
- Customer Profile/Persona
- Marketing Plan
- Financial forecasts, planning and budgets
Once you have done all of the above, you should now have a clear idea of what your business is, why people should buy it, what makes it different from the rest, who you want to buy your product or service and how much money and profit you can potentially make with your business.
If you haven’t got this information all on paper yet, go back through this article and make sure you have checked everything. Now its time to get creative… Yes, you can now design your company logo, website, flyers, social media and anything else you will use to promote your business.
Top 5 tips on getting your creative marketing done fast and efficiently!
- When sourcing any creative materials always get 3 quotes to compare against. Extract the best value for money, not the first person or cheapest offer.
- You must ask to see a designers, website designers and marketers to see their work and ask them to talk you through why and how they produced their previous work as they did.
- Don’t believe social media and digital marketers when they say they “can get you more sales if you pay for their marketing services each month”. Find what marketing channels work for you first by testing them yourself. Once you find that marketing channel has grown beyond the point of you being able to manage it yourself, ask people you trust for referrals to companies or freelancers they would recommend.
- Don’t spend weeks on designing your creative materials, e.g. logos, website and branding. Branding is about evolving based on the way your market wants. Your brand will evolve as it grows, so don’t spend all your time designing and not enough time doing.
- Have a second pair of eyes to look over what you have produced. Use someone who is un-bias, try and avoid using friends and family who will display an unconscious bias, try to use a work colleague, create a social media poll or online survey to see what people think.