City gent gets transformed

HJ's salon doctor helps a men's salon to pull its business model into shape Steve Beever set up City Gent in 1991 and now has five salons with a turnover of £1million. He felt there was a fantastic opportunity to do something different in the industry and wanted to expand - his ambition was to open nine new company salons by 2009. But to achieve this, energy and skills had to be channelled in the right direction. He needed help in identifying this direction, realising that his salon's business model needed to be tweaked and developed.

The Diagnosis:

I started by conducting a SWOT (strength, weakness, opportunities, threats) analysis with Steve on the business. Strength: The company had good brand design - a strong, specialist male fashion store concept. Weakness:

• Poor on PR
• Had a shortage of stylists
• Increasing competition in the market
• A high rental cost for a new salon
• A lack of good locations for new branches
• Expensive operating costs
• Poor retailing percentage to turnover
• No precise data on its business clients.

Opportunities: The business could become an aspirational, high street brand, with the unique selling point of a specialist male fashion store nationwide. Potential areas for development include:

• retailing to at least 20%
• Could launch own-brand products
• Revamp the price list
• Become active on PR
• Develop and design operational systems so that the business became system-dependent and not people-dependent.

City Gent had a strong and unique brand, which needed publicising. To achieve this, it needed to follow the approach of the best, most successful businesses, which are the ones that focus on strategy, teams/people and marketing. The team leaders needed to sit down together regularly every four weeks to look at what City Gent was trying to achieve. They needed to look at what the competitors were doing, and at what the customers really wanted. The most cost-effective way to expand any business is to franchise. Steve and his co-directors needed to start documenting the operational systems and procedures that would fit the City Gent business model. This documentation could then be given to potential franchisees to ensure business success. The company needed to identify extra training for the entire team. As the business grew, it would face conflicting pressures:

• To get more business
• To do more and more work of a higher quality
• To work together.

The textbook definition of marketing is "identifying and satisfying customers' needs profitably" - seeing your business through your customer's eyes: Why should people buy from you? What benefits is your business offering that your competition doesn't offer? If your business isn't offering additional benefits, why should people buy from you at all? These are all questions that any company should be putting to staff and getting them to answer. A poster campaign that Steve and his directors started created a real buzz and was excellent, so I congratulated them on what they had achieved so far and suggested they set up a separate design company specifically to provide these services for City Gent franchise salons.

The Result:

All of the recommendations and suggestions have been accepted and are being implemented. Steve was introduced to a PR company that specialises in the industry and an employment law specialist to sort out terms and conditions of employment including training agreements, and fair restraint of trade clauses with a reasonably defined radius-clause agreement. A wider, more spacious retail area has been developed to give the salons a refined male-boutique feel, and will develop the percentage of retail to turnover. Three new store locations in Newcastle, Liverpool and Birmingham have been identified, with the help of a commercial property agent. A new position of area manager has been created, to help underpin and improve communication and operational back-up between head office and the salons. All the team leaders have received an action plan with assignments to complete. Product companies have been encouraged to become involved in training and support. 2007 is looking exciting for Steve and his team. The company is poised to expand and develop.