Thursday, July 19, 2012

Entrepreneur Interview Essay

Entrepreneur Interview Essay

Considering any business, people imagine rich, prosperous, initiative and resourceful entrepreneurs, who successfully started and developed their own company. Today’s interview deals with spa business. Chief Manager of an International A.B.C. Spa company will help us to understand the system of spa business and its profitability. A.B.C Spa cooperates with world leaders and professionals in this sphere. It efficiently provides qualified service for clients. Our interview will help to learn more about spa business on the example of a small A.B.C. Spa branch in America.

1. What was your first step in starting your business?
I know people who started business spontaneously: without business-plan, market analysis etc. Most of them managed to achieve goals and expand their enterprise. However in recent years too many people are involved in different business affairs. Spa business becomes more and more popular. That’s why we decided not to run risks as it could lead to waste of time, finances and even complete failure. Firstly we’ve chosen a place with lower rate of competition. Everybody knows that this business expands and grows very fast. In the USA one may count over 100 millions spa visits a year. The first step to start our business was to find finances and place for it. I must admit that great advantage of this sphere is that any place would do. Most people are tired of constant fast-moving life. We are ready to provide relaxation for them.

2. How did you arrange financing?
Well, actually we had few experience in economic affairs. That’s why we hired a consultant of spa business to regulate finances during first 6 moths until we understood the system. Our first expenses included personnel salary, rent, equipment amortization, cost value, etc. They were partly covered within a year. Later each procedure brought 50$ of pure income. We created an average saloon with elements of spa. Its project, design and equipment cost nearly 150,000$.

3. Who is your target market?
Nowadays target market of spa business is rather wide. When starting a business it’s very important to understand marketing. One should know needs of target customers and try to fulfill them. Our spa-saloon is intended for busy people, tired of smog and contaminated city. Everybody needs relaxation. Our target market consists of people who care about skin, hair, nails and figure, and feel uneasy being untidy. People struggle against stress and constant tiredness. Youth often faces skin problems. Saloons save time, provide positive emotions and effective appearance.

4. Did you do any primary or secondary research?
As I have mentioned, we didn’t have much experience in this sphere. But we were young, initiative and ambitious, and looked for any opportunity to start a business. Spa sphere was already developed. That’s why we used secondary research. We read publications and followed the example of successful entrepreneurs.

5. If you had it to do all over again, would you do anything differently? What mistakes did you make?
I must admit we surely made few mistakes, as nothing can be done perfectly. We had some problems with selling our business plan for example, as it wasn’t accepted, being incomplete. Few other aspects dissatisfied the claims, but they didn’t influence our prosperity anyway. I think we were lucky and if I had to do it all over again, I’d probably change almost nothing.

6. How large a part does creativity play in your business?
Creative work, innovations and initiative ideas are of great importance, especially for spa business. Nowadays more and more people get involved in this sphere. It creates high competition. That’s why it’s necessary to have unique approach not to be like others. New equipment and professional staff are always valuable.

7. Are your rewards tangible? Intangible?
Rewards depend on procedure costs and expenses. We provide service for about 200 steady clients, which means 10-15 thousand dollars of steady income. Average client spends 200-300$ for one therapy. Cosmetics trade brings additional profit of 2,000$ per month. I think that our rewards became more or less tangible within 2 years of hard work.

8. What was your best marketing technique?
We tried to create a saloon which would satisfy clients and personnel as well. Club system for steady clients and high discounts contributed to our success. People often ask how we managed to gain prestige and image in such a short period of time. In this case advertising should be taken into account. Efficient ways to attract audience were probably our best technique. We offered our service through mail, Internet, invitations, publications in local press and even on TV. What really matters is a clever combination of all these methods.

9. What portion of gross sales do you spend on advertising?
About 20,000$. We’ve been using wide range of advertisements which turn out to be not so expensive. We actually try to establish personal contacts with valuable clients. But generally advertising expenses are paid back very soon, because more and more people come to our saloon. A successful entrepreneur never stops improving the advertising system, no matter how much it would cost.

10. Did you hire more employees than you originally expected?
Well, yes. I think it always happens. At first we hired general range of specialists, like 4 hairdressers, an expert beautician, 2 massagers, a qualified dermatologist, let alone administration staff. Later it turned out that we also needed consultants, cleaners, salesmen etc. One can never predict precise number of employees to hire.

11. What makes your business unique?
I think customers should decide what distinguishes our saloon among others. Hairdressers and cosmetologists have always been in need. The system of modern fully-equipped saloons expands day after day. We help to improve people’s appearance, get rid of tiredness and stress. What’s unique? Well, may be a combination of procedures makes us unusual. Unlike other saloons we also provide different ways of relaxation - traditional and alternative as well. A wide range of procedures makes spa-saloon similar to resort.

12. How did you write your Business Plan?
Spa-enterprise needs special approach. There’s no stereotype in writing a plan for saloon business. One should develop it individually. At first we thought of economic side (amount of investments, expenses and profits). It was important to plan target marketing and the necessity of lending money from the bank. In addition business location, staff, strategies, opportunities to promote ought to be taken into account.

13. Are gross profits all you expected them to be?
Before starting a business it’s always necessary to think over profitability. In order to define general income one should take into account profitability of each procedure in particular. Our saloon is gradually expanding. We install new equipment, introducing more conveniences for clients. It naturally reflects in general gross profit. For a growing business our profits are quite satisfying, but we try to arrange work more efficiently.

14. Do you plan on selling your company sometime in the future?
I think there are several reasons for selling a company: economic, commercial, organizational and psychological. Now I like the way my business is going on. But the idea to sell business always comes unexpectedly. Business may no longer fascinate or bring decent income. Sometimes one may have no desire to go to the company, meet accountants and control employees. But I understand that business without a leader would be destroyed very fast. Business sale is a serous deal. It needs reliable professionals who would be able to find reliable customers. In addition one needs time to prepare company for selling. I’m satisfied with my business because it is well-organized and brings steady income. And I don’t see significant reasons to sell it.

15. Anything else you would like me to know about your company?
I think our company has wide perspectives for future and is beyond comparison. Having learnt so much about spa-business, I hope you’ve got interested in it, understood its structure, positive and negative sides.
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