Challenges and Strategies for a Hairdressing Business in the UK Market

The report covers the challenges and strategies for a new hairdressing business in the UK market. It includes the nature of the entrepreneur, start-up process, sources of competitive advantage, current level of demand and competitive environment, growth and development of business, challenges of managing and running the business, current growth and development strategies, government support to overcome the challenges, and recommendations.

Report

Executive Summary
It is essential for every entrepreneur to prepare an effective planning for their new business to
identify the challenges and issues of their business so that they will make effective strategies to
mitigate these challenges. There are various kinds of challenges to manage a SME business like
funding issue, recruitment issue, technological issues and many others. Effective government
schemes will help the company to mitigate few of these issues. PEST analysis will help the
company to identify their external business environment for their business. The following report
covers a new start-up of Hairdressing business within UK market. The name of the company is
Style Your Hair Salon and it has 4 employees at its initial stage. The following report will cover
how the business will survive within the market by mitigating all their challenges and what all
recommendations and strategies they need for effective growth.

Table of Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................4
Findings...........................................................................................................................................4
Nature of the entrepreneur...........................................................................................................4
The start-up process.....................................................................................................................5
The business concept and any source of competitive advantage.................................................6
The current level of demand and competitive environment........................................................6
The growth and development of business...................................................................................7
The challenges of managing and running the business...............................................................7
The SME’s current growth and strategies...................................................................................8
Government support to overcome the challenges faced by company.........................................9
Conclusion.......................................................................................................................................9
Recommendations..........................................................................................................................10
References......................................................................................................................................11

Introduction
A new business is considered for the report which is a hairdressing business. The name of the
company is Style Your Hair Salon (SYHS) and it will be located in London. SYHS is a small,
friendly and professional hairdressing and beauty salon. Various ranges of services is provided
by the company like cut and blow dry, hair highlights, face art makeup, manicures and pedicures,
waxing and many others. This report covers nature of entrepreneur, start-up process, sources of
competitive advantage, current level of demand and competitive environment, growth and
development of business, challenging of managing and running business, current growth and
development strategies, government support to outcome the challenges and recommendation.
Findings
Nature of the entrepreneur
Entrepreneur is involved in hairdressing business where a brand new hair salon is opened at
London with quality services of hair cut, highlights hairs, massage and many other services. This
is the first business in which the entrepreneur is involved in and the idea of this business is
gained from family members due to their experience in similar industry.
Table of illustration-
Characteristics Qualities to
conduct
hairdressing
business
Benefits for
choosing
hairdressing role
Advantages of the
business and selected
job role
Disadvantages of
the business and
selected job role
Every client is
special
Creative Good job security Opportunity to talk to
different people
Earnings are less
Embrace
technology
Customer service Opportunity to work
anywhere
Less job pressure High competition in
the industry
Keep it clean Listening skill Flexible role No senior authority to
answer
Limited promotion
opportunity
Communication is
key
Time management No day is spend dull Decent work-life
balance
Low social status
Employee
recruiting
Communication
skill
A positive
experience
No need of college
degree to become
hairdresser, just
experience.
Ignorance of learning
hard skills.

Job description- Hairdressers cut the hairs of the people and make sure that they will get good
satisfaction (La Rocca and Snehota, 2021).
Salary- At an average, hair dressers earn between $22,000 to $37,000 per year.
Job satisfaction- It is a highly satisfied job if the job holder likes to cut hair and communicate
with their clients.
Work-life balance- It’s good because hairdressers are not required to work for extra hours and
there is no work pressure.
Requirements- There is no special educational requirement to become hairdresser.
The start-up process
The business is begun with appropriate planning, a business advisor is asked to help the
entrepreneur to prepare a blueprint for whole business that how it will manage and operate in
future. Business advisor took a fee for their services but suggest few best strategies and ideas to
start this business. Half of the funding is raised by equity which means owner spend their savings
to start this business and half of the funding is arranged by bank loan at low interest rate. During
starting phase there are only 4 employees working for the salon including the owner and it is
decided that employees will be hired when the business will start grow and demand of their
services will rise in the industry (Cepel, Belas and Dvorsky, 2019). The size of the chosen
business is small during its initial days and the owner has decided to open a single salon in
London. The equipments which is required at salon is purchased and the salon is managed
appropriately but few of the challenges are faced by the SYHS Company at its initial days and
these challenges are mentioned below-
 Managing fund- It is one of the biggest challenge which is faced by entrepreneur at
start-up of the business. It is tough to manage appropriate investment for the new start-up.
 Promoting business- It is also challenging to analyse appropriate medium of promoting
business.
 Hiring employees- It is essential for the company to hire employees which are having
appropriate skills and experience within the industry.

The business concept and any source of competitive advantage
The main idea behind the business is to gain high marketing reputation and gain effective
competitor advantage within the industry. Secondly, the skills and experience of entrepreneur is
matched with the business which is opted hence, there is a good scope of growth for the
entrepreneur to choose specifically this business only (van Winden and Carvalho, 2019). The
business of SYHS is known for their effective and quality services, their customers like to visit
the store due to their low process as compared to their competitors and their discounted visiting
cards for their loyal customers. They heard their customer’s messages and provide them the hair
cut and other salon facilities according to their requirements and needs. The company is also
focused to provide training to their employees on regular basis by asking them to attend the
industrial events and provide them all required resources which they need to perform their task
effectively. The SYHS is better than its competitors due to its lower prices, effective and
customised services, trained employees, loyal discounted visiting card and many other facilities.
One of the biggest sources for the company to gain competitive advantage is that they keep on
scanning their current business environment to identify their current trends of industry to grow
well and they analyse the strategies of their competitors to make their own defending strategies
to survive in market.
The current level of demand and competitive environment
Porter five forces for SYHS company-
Threat of new entrants- SYHS is having major threat from new entrants of similar companies
because when a company with effective strategy and who employed well-known hair stylists will
definitely attract customer’s attention.
Threat of substitutes- There are various businesses in this industry which can copy the services
and hair styles of SYHS. Hence, it is essential for the business to trademark and copyright their
business and its services to avoid their competitors to copy their business (Berg and et. al., 2018).
Bargaining power of suppliers- It is essential for SYHS to maintain a good relationship with
their suppliers who can provide them effective tools and machines for their salons. It is good if
SYHS will develop their network with more than one supplier in the market and avoid depending
on single supplier. This will help them to switch to another supplier immediately if one supplier
refuses to supply their tools to the company.

Bargaining power of buyers- It is essential for SYHS to lower their prices and offer quality
salon services to attract more number of customers toward their brand. Offering discounts to
loyal customers will help them to retain their customers for longer period of time.
Industry Rivalry- There is various competitors of SYHS Company in the market such as Tiny
and Beauty Hair Salon and many others. They are famous due to their consistency in their
performance and they focus to satisfy their customers through their effective services (Bevan,
2018). Hence, it is essential for SYHS Company to provide home delivery salon services and
hire highly experienced and well known hair stylists for gaining competitive advantage.
The growth and development of business
Market share is the percentage of total revenue or sales in a market that a company’s business
makes up. In context of UK, $2.4 billion is the market size of hairdressing in the year 2022
(Cosmetics Retailers in the UK - Market Size 2010–2028, 2021). There are about 45,000 hair and
beauty businesses operating in UK in the year 2020. It is also estimated that 2,88,000 beauticians
are working within this industry excluding owners and managers of salons. Hence, it is critically
evaluated that this industry is having appropriate growth and scope for the businesses in future.
There are various kinds of trends in this industry which can help SYHS to grow well and few of
the trends are mentioned below-
 Social media help the hairdressing companies to build a better customer connection by
posting pictures and videos of haircuts within their salon. This will influence other
customers to try their services.
 Online booking for hair cut appointment is also one of the trendiest services for
hairdressers. In context of beauty industry most of the big and busy hair salons started
accepting appointments for their customers where they provide date and time for their
customer for their required salon services (Barber, 2021).
 Home delivery of services is also one of the best trends in this industry where
hairdressers will arrive at home of customers on special orders and provide all required
services to their customers. Companies charge extra prices for such services.
The challenges of managing and running the business
PEST analysis-
Political factors- Developing pricing strategies is one of the biggest challenge for hairdressers
and secondly increasing interest rate of banks will also considered as big challenge for the

owners to fund their business (McCann and Myers, 2021). On the other hand, political stability
of UK can help the companies to grow well.
Economic factors- Employment rate of UK is high but the job status in beauty industry is low.
Hence, there is less number of employees available within this industry. Secondly, UK is the
place which is considered as having most expensive cost of raw material and technology. Hence,
SYHS can face issue of spending lot of money to purchase tools and machines for their
operational activities.
Social factor- UK is one of the most popular places for using beauty products and services by
their customers and the people of UK are very concern about their skin and attractive looks.
Hence, it is seen that most of the time salons will receive only aggressive customers. Hence, it is
a big challenge for salons to manage their aggressive customers effectively.
Technological factors- UK is well known for their technological factors, hence good quality of
tools and machines can be used by SYHS can purchase effective tools for their salon. On the
other hand, social media can also harm the brand image of the salon by spreading wrong
humours about salon and their employees.
The SME’s current growth and strategies
There are various strategies which can help SYHS to grow well within the industry and few of
the strategies are mentioned below-
 Hire experienced workforce- It is essential for the salon to hire well-known and
experienced hair stylists for the growth of their organisation. Experienced hair stylists
will mitigate the chance of mistakes within their professional task and he/she is well
aware about how to communicate with different kinds of customers and what they expect
from them.
 Attend the industrial events- Beauty industrial events are one of the best opportunities
for salon owners to enhance their skills and talents by learning from most popular hair
stylists of their country (Stokinger and Ozuem, 2018). Guests of such events are those
individual who leads the industry and they communicate their experience and few tips for
expansion of business. Hence, SYHS owner and their employees must attend such events
for their professional as well as personal growth.
 Offer new services- Those hairdressing companies get more expansion in their
businesses which offer varieties of their services to their customers. Hence, it is essential

for SYHS to offer large variety of services to their customers at lower prices than their
competitors to attract more customers and influence them to become company’s loyal
customer.
 Manage all required tools and machines properly- It is essential for SYHS to manage
the tools and machines appropriately so that when they receive any demand from
customer’s side than they will quickly fulfil them by providing effective hairdressing
services.
Government support to overcome the challenges faced by company
Government of UK has imposed less restrictions for their trading activities which help SHYS
company to grab the opportunity for international growth by opening their franchising within
new geographical area with better experienced employees. There are various supports from
government side to the corporate sector for financial losses which they faced in COVID
pandemic (Leung and et. al., 2019). One of the schemes is Corona virus Business Interruption
loans where government of UK promised to provide appropriate financial services to the SME’s
of UK. According to this scheme, it includes no interest payments for the first 12 months of loan
taken by the companies for their operational activities. This scheme is only for those businesses
whose annual turnover is less than £45 million per year (Financial support for salons /
freelancers, 2022). Paying Your Staff is another scheme by the government which help the
companies to pay their staff salaries of up to 80%. Government of UK is also focusing on
lowering the prices of their raw material so that companies will avoid importing the raw material
from other nations.
Conclusion
It is concluded that analysing the nature of business will help to manage the company properly in
future. There are various kinds of issues which can face by a hairdressing business such as
managing funds, hiring skilled employees and many others. Effective government schemes of
UK can help the companies to overcome few of their business challenges. Analysing factors for
gaining competitive advantage like lowering the prices of services can also help the company to
grow well.

Recommendations
1. It is essential for SYHS Company to analyse each government scheme and identify which
scheme they can use for their business growth.
2. Lowering the prices of services as compared to competitors can attract more customers. It
is also essential to focus on quality of services.
3. Hiring skilled and experienced hair stylists will help to influence more customers to
choose SYHS Company rather than any other salon.

References
Books and Journals
La Rocca, A. and Snehota, I., 2021. Mobilizing suppliers when starting up a new business
venture. Industrial Marketing Management, 93, pp.401-412.
van Winden, W. and Carvalho, L., 2019. Intermediation in public procurement of innovation:
How Amsterdam’s startup-in-residence programme connects startups to urban
challenges. Research Policy, 48(9), p.103789.
Barber, T., 2021. Differentiated embedding among the Vietnamese refugees in London and the
UK: fragmentation, complexity, and ‘in/visibility’. Journal of Ethnic and Migration
Studies, 47(21), pp.4835-4852.
McCann, H. and Myers, K., 2021. Addressing the silence: Utilising salon workers to respond to
family violence. Journal of sociology, p.14407833211031005.
Stokinger, E. and Ozuem, W., 2018. Social media and customer retention: implications for the
luxury beauty industry. In Social media marketing: Breakthroughs in research and
practice (pp. 733-755). IGI Global.
Leung, P.P. and et. al., 2019. Enhancing online-to-offline specific customer loyalty in beauty
industry. Enterprise Information Systems, 13(3), pp.352-375.
Bevan, D., 2018, February. Beehives Bobs and Blowdries: History of hair and hairdressing in
Post war Uk. In Beehives Bobs and Blowdries: history of hair and hairdressing.
Berg, V. and et. al., 2018, October. The role of data analytics in startup companies: exploring
challenges and barriers. In Conference on e-Business, e-Services and e-Society (pp. 205-
216). Springer, Cham.
Cepel, M., Belas, J. and Dvorsky, J., 2019, September. The impact of significant political factors
on starting a new business. In European Conference on Innovation and
Entrepreneurship (pp. 220-XVI). Academic Conferences International Limited.
Online-
Financial support for salons / freelancers, 2022 [Online] Available Through:
https://www.capitalhairandbeauty.co.uk/inspiration/financial-support-for-your-business?
tagfilter=advice
Cosmetics Retailers in the UK - Market Size 2010–2028, 2021 [Online] Available Through:

https://www.ibisworld.com/united-kingdom/market-size/cosmetics-retailers/