In
order to get an insight into the setting up of my business I carried
out some primary research. I spoke to someone who already has her
own business. Her name is Mel and she is part of a Franchise. This
means that she has bought into a business that was already there
which meant she has the right to use the business’ name ‘Toni and
Guy’. She believes that buying into an already existing business
is definitely easier than starting up a whole new business but there
are limitations.
Mel
started by having an apprenticeship for a few years in the ‘Toni
and Guy’ salon that she now owns. She then decided that this wasn’t
for her and she wanted to make the salon better. She wanted it to be
the best and she also wanted to be responsible for this. So at the
age of 21 she bought into the franchise and began running the salon.
She told me that she faced some difficulties in the beginning. The
main one was her staff. When she worked at the salon the staff got
away with a lot, did what they wanted and obviously she participated
in this. When she took over, she knew that this had to change and
some of the workers weren’t happy about this. One of her staff left
shortly after she took over and the majority of them followed. In the
beginning she also found paying ‘Toni and Guy’ hard too. She has
to pay them 10% of her turnover which is a lot. So in the beginning
if she wanted to make changes, she found this hard because she had to
pay them all that money. However, she knew that using the company’s
well-known name would benefit her in the long term which it did. Now
she is used to paying the 10% turnover and is still grateful to be
using the companies name.
In
order to get business, she has to promote. Because she is part of a
franchise she has to use everything ‘Toni and Guy’ in the salon.
This means they supply advertisement and this advertisement is the
same in all of the stores across the world. However she does find
ways in which she is able to attract customers. For example, she
creates partnerships with other business' around her. An example of
this is that anyone who gets their hair cut on a Monday and Tuesday
get a free lunch at the local coffee shop. Mel only pays £5 for each
customer that goes there to get the free meal. This price Mel pays is
not only cheaper than the usual prices of the meals but its creating
business for Mel's salon and also the coffee shop too.
To
be able to know what her competition is doing, Mel has a way in which
she can find out all the information she needs to know whether that's
to do with the other business' customer services or the décor inside
their salons. She does this by sending mystery shoppers into the
other business' salons. The person who goes in will be a new customer
for the business and can basically go in and have the experience,
then go back and tell Mel what it was like. For example, she sent a
mystery shopper into one of the surrounding salons and found out that
they had Ipads for the customers to go on whilst they had their hair
done. Now she is trying to form a partnership with o2 to be able to
get Ipads from them for cheaper and promote the o2 name for them. Mel
believes that mystery shoppers are a great way to find out whether
the competition has developed and also how to still be better than
them.
Mel
also told me of some computer software that she uses in her salon.
This software basically does things a lot faster than what they would
take for Mel to do them. For example, setting up and managing new
appointments in the salon. The software also does things that Mel
would not be able to do. These are things like keeping track of the
customers who have came back and also if the have came back to the
same employee at the salon. The software works out how many customers
each employee has had and how many has returned to them and this sets
how much wages they will get. Mel explained to me that without this
system she would find it almost impossible to keep up with the jobs
she has to do and also find it extremely hard to keep the business
moving smoothly.
All
in all, speaking to Mel about these things has made me consider which
legal structure I would want my business to have. After thinking
about everything that Mel told me about a franchise I have decided on
being a sole trader. The main reason for this is the limitations. As
a franchise its really difficult to be able to do what you want with
your business. In Mel's case, she wants to be able to do more with
the décor in her salon but she has to have it looking the same as
the rest of the 'Toni and Guy' salons. It's still as if Mel is
working for someone even though she owns the salon and I want to have
more independence and be able to make more of my own choices for my
business. Another reason is the money. Mel said that she pays 'Toni
and Guy' 10% of her turnover which is a lot of money. It's also money
that could be going towards making the salon better but she has no
choice in the matter because she is part of a franchise. As a sole
trader, I will be in total control of where the money from my
business went and how its spent. I like this idea of independence and
not having someone telling you what to do and how to do it. I want to
make make my business the best there is and I would also like full
credit for it too.
