Starting new venture

jobbingmusician

About the self-employed thing - there are some useful hints in the first post of the mystery shopping thread, which I think is a sticky. It's this one - Mystery shopping thread 26 *please read the op first**please no client names or fees

System

bugslet wrote: »

I disagree as well sangie, I think for that type of business, it probably isn't necessary.

Words fail me. Business plans are always necessary and you usually find the ones that fail didn't bother with one. Part of a business plan involves doing research to find out how many businesses in your area are offering the same service, how long they've been on the go, what their prices and services they offer are and that one part of the business plan alone can save you entering a market which is saturated beyond belief in your area and throwing away your money.

Another part of the business plan involves researching things like start up costs, legal requirements and regulatory requirements you're going to be required to follow so you don't start up and either end up in the crap or suddenly find that £1000 you thought you'd need to set up wasn't even close to being enough.

Savvy_Sue

spadoosh wrote: »

Know sod all about beauty but it seems like something that would be happening on a fairly regular basis. Ie getting nails done, tanning, make up etc for events all seem to happen on a regular basis. So you shouldnt need thousands of customer more likea good core of regular customers.

And you need to think about how you get that good core of regular customers built up, because they probably have their own regular therapists - why would they change to you? Either that or they shop around for special offers and show no loyalty at all ...

(I changed hairdressers because the started doing nails in the salon and I couldn't bear the smell, so when they failed to ask if I wanted to make another appointment, I didn't! Don't know if they've ever missed me. So that's a tip, at the end of a treatment, always ask "would you like to make another appointment? My diary can get very booked up.")

spadoosh wrote: »

I'd start by giving your friends free trials (cover cost of materials). Ask them to be brutally honest with you on how happy they are with your work ask questions about how much they would be willing to pay, how affordable it is, how often they would look at getting these treatments then encourage them to be customers at mates rates. If your good they will recommend you. My sisters friend started a hair salon, sister recommended her to my OH, she tried her and now the hairdresser can guarantee £70 in the till every 6 weeks. Its a bit cheaper than what she would typically charge but shes also had a wedding booking out of my OH, and a couple of my OH friends have become regular customers too at full price

I wouldn't offer free treatments, nor give too much discount, and make sure if you do give discounts that people know it is an introductory price which is only on offer for X weeks. Then it's not a nasty shock when you charge the full price.

bugslet

Tarambor wrote: »

Words fail me. Business plans are always necessary and you usually find the ones that fail didn't bother with one. Part of a business plan involves doing research to find out how many businesses in your area are offering the same service, how long they've been on the go, what their prices and services they offer are and that one part of the business plan alone can save you entering a market which is saturated beyond belief in your area and throwing away your money.

Another part of the business plan involves researching things like start up costs, legal requirements and regulatory requirements you're going to be required to follow so you don't start up and either end up in the crap or suddenly find that £1000 you thought you'd need to set up wasn't even close to being enough.

26 years in a business with a higher than average failure rate, two depots, 22 staff and one of the highest profit margins in the sector.

I could have been a bigger firm, but turnover was never an aim and I'm terribly picky about the clients I work for.

My entire business plan on starting was buy a van and get some customers and not let them down. My entire pricing model was based on drivers wages and fuel coming to 50% of costs (and I've seen some very fancy mathematical equations around that are way over my head). And the most important thing, staff retention. My staff stay for literally decades because we provide a good place to work in a sector where generally people are treat like rubbish.

So unsurprisingly, I disagree that business plans are always necessary. I didn't have one and I have a successful business. The only things I'll put as a rider is that personality probably comes into it and I'm not a detail person. As for the regulations, it was an industry I worked in before so knew the details anyway. As the OP is studying, I suspect that regulatory information is part of the course.

spadoosh

Savvy_Sue wrote: »

And you need to think about how you get that good core of regular customers built up, because they probably have their own regular therapists - why would they change to you? Either that or they shop around for special offers and show no loyalty at all ...

(I changed hairdressers because the started doing nails in the salon and I couldn't bear the smell, so when they failed to ask if I wanted to make another appointment, I didn't! Don't know if they've ever missed me. So that's a tip, at the end of a treatment, always ask "would you like to make another appointment? My diary can get very booked up.")

I wouldn't offer free treatments, nor give too much discount, and make sure if you do give discounts that people know it is an introductory price which is only on offer for X weeks. Then it's not a nasty shock when you charge the full price.

Thats very true you need to offer something to poach customers. A few things that i think could do that would be having a good rapport (ie being a friend) being competitively priced (promotions and discounts) and being good at what you do (a freebie gives people the opportunity to see how good you are). "So this treatments usually costs £15" ... "o thats good, i normaly pay £15 with sues therapy but she talks too much" ... "do you want to book your next appointment?" ;)

Business owners tend to be jack of all master of few thats why you get business advisers and accountants and marketing people to manage the finer things.

I dont believe every sole trader/small business carries out a comprehensive business plan. Nor would a lot understand the nitty gritty of the contents. As mentioned i doubt a builder will know how many people in there area need building work, i doubt they will sit down and do a SWOT analysis, do break even charts or know every single competitor in there area. Plenty of them are successful because they are good at what they do, they can work in there head how much a job will cost and offer a price to make a profit and because they can rely on regular work from happy customers. Not trying to put down builders here.

My mum set up her business about 15 years ago. Her career was a seamstress and sahm for the most part. Shes now got a business that turns over £750,000 (nothing to do with kids or sewing). Ive spent 5 years or so studying business in its formats (business, accounting, economics through college and uni), i looked at her business plan and its laughable compared to something i could produce. I couldnt have produced that business turning over that amount of money though. I wouldnt have the passion, nor the ability. Its funny, i know exactly how to get the money coming, what needs to be spent, all the regs, i can find cost savings and improvements, but theres no way i could manage that business. Theres just no interest and no skill to deliver the service.

Its a bit like "He who can, does. He who cannot, teaches". you certainly dont need to be a business expert to have a succesful business. Youre more likely to fail by not being good at what you do than by not being good at business.

bugslet

If I wanted to be a big firm, then I'd probably have to hire people to actually have a plan and direction. But it's so not me.:o

Spadoosh, you could bamboozle me in 5 minutes. My finance manager is an ex bank manager and generally speaks to me as if I were a ten year old when explaining things.

Just one more thing on plans, I do feel that we sometimes over complicate things, sometimes using the KISS principle works just fine. OP, if you like structure then by all means make a business plan to whatever degree of complexity you want, if you are more 'fluid', then go with the flow. It's your business, your choice:D

trailingspouse

I did a business plan once - biggest work of fiction since Dickens sat down at his desk and thought 'what shall I do today?' You will, however, need one if you are needing to get a loan.

Everyone starting up in business has been nervous - even Richard Branson didn't know if it would work out, back in the day!

Instead of a business plan, I would suggest the following - decide how much money you need to make, then work out how many clients you will need to see in a week in order to make that level of profit. So (to keep the numbers simple), let's assume you need to make £500 a week. You could charge one client £500. Or you could charge 500 clients £1. Or somewhere in between. And of course you'll quickly realise that charging £500 doesn't give you £500 profit - you need to buy equipment, consumables, fuel for your car and so on before you can start to make a profit. So you need to add that in to how much you charge. Then decide how much you can sensibly charge someone, and you can work out how many clients you need to see in a week in order to make a profit. Then decide if that number of clients is actually doable.

Some thoughts on the mobile aspect - limit the area you are prepared to travel to, and try to book clients who are close together for the same day. So, you might decide you are prepared to travel a 10 mile radius from home - but if Client A is 10 miles north and Client B is 10 miles south, you will be travelling 20 miles to get from one to the other.

And starting from now, keep all your receipts for anything you buy that could possibly, one day, be used in the business - if you do go ahead, you can tax-deduct those costs, and if you don't, no harm done.

And finally - have you thought about going to care homes and suchlike? Old ladies like to look nice too!! And the advantage for you is lots of clients on the same site, so less travelling costs.

Don't be in too much of a hurry to give discounts - if you decide you need to charge £20 a client, why would you then suddenly decide to only charge £15? What's in it for you? A loyalty bonus might be better - every 10 appointments they get a free manicure, or something along those lines. That way you're not giving anything away until you've got their money!! And if they really enjoy the manicure, they might start paying for one now and again!

I've just realised I haven't answered your original question about advertising. Facebook, definitely. Also leaflets - give out to anyone and everyone, and give satisfied customers a handful to give to their friends. Business cards with space on the back for writing down the next appointment date would be useful too.

All the very best with your venture.

jobbingmusician

Firstly, can I say that (for a change) I DO know what I'm talking about, as I have an MBA. (:eek: - how did THAT happen! )

Secondly, my own view is that BP are very over-rated. Or rather, that *FORMAL* BP are very over-rated. I've been on some 'start your own business' courses where yes, the participants hadn't thought of the very most basic things, like the fact that turnover isn't the same as profit. But others where people didn't have anything they would call a BP, but in fact had a very good idea of how things were going to work.

I don't like the way that organisations and individuals can become paralysed by their BP - I've so often seen people fail to do things that I consider vital for success because they weren't in the BP. Hence my enthusiasm for informality!

Having said this, a previous poster is quite right - if you want or need a business loan, your funder will want to see something. And actually working through something informal may help you think things through. There is a nice user-friendly guide to writing a BP (and by this I mean a guide to 'other things besides publicity which you should think about') at https://www.princes-trust.org.uk/help-for-young-people/tools-resources/business-tools/business-plans if you are interested.

So, OP, don't be scared by the idea of a BP - you are already doing great things towards developing one. How many people would be sensible enough to ask the hive mind that is MSE about ideas for publicity?

Yes, I will be very shocked if your course doesn't include a module or at least a lecture on planning for success and self-employment. Remember, you are a customer of this course - if they don't, nag them to do so!

JReacher1

If you've got a car the best advertising for this industry is to have some branded advertising on your car. My friend gets most of her work from either word of mouth or people who have got her number from her car.

Leaflets don't do that well as people don't like things pushed through their door and it can take hundreds of leaflets to get one customer.

You want obvious advertising that isn't very intrusive. Facebook would be good but people won't be able to find your information on that very easily.