Primary Research.

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.