Get Your Business on TrackAs a new hair extension company, I know you are overwhelmed. Whether it’s because you are confused about where to start, you have tons of things to do with limited resources, or you feel as if your competition has it all together and you don’t. Any new business owner can relate to these feelings. If you are seeking a way to successfully get your company up and running then this article is going to be your blueprint. Creating a brand model designed specifically for your hair company is going to be the most important task that you complete besides your business plan. Your business model is going to help you create your business plan and vice versa. I know you're wondering what a business model is. Don't worry I’ve got you covered but before we dive deep into the brand model seas, I want you to sit back, take a breath and relax. Take the time to stop thinking about the things that don’t go right and view your failures as valuable lessons. This process is going to take a lot of thought, and you don't need anything distracting you. Get in a quiet place, grab your notebook and let's get to work.
What Is A Brand ModelA brand model is a diagram that provides a comprehensive “picture” of your brand and dissects it to make it relatable in the form of concepts and examples. The brand model is going to explain what your hair extension company offers to your ideal client. The most important question you must answer is what value do you add to your client’s life? Now that we understand what a brand model is or a business model is I want to take you through the different parts of the model and help you to begin creating the strategies you need. Let's look at the parts of a brand model and what each part requires you to do:
Unique Selling Proposition or Value PropositionIdentifying your unique selling proposition is going to separate you from your competition. A unique selling proposition, or USP for short, is the one thing or way to distinguishes your product from your competitors. It is also known as the unique selling point or unique value proposition. Think about what makes your hair extension business better than your competitors. Your USP could be your targeted clientele, the quality of your extensions, your shopping and shipping processes, or even the packaging. Keep in mind that every consumer wants a problem solved and life made easier. Once you can clarify your USP, this is when you will clearly communicate to your consumer how you are going to help them. As a hair extension company, how can you help solve your ideal client's need? If you are unsure, ask them! They will give you honest feedback that is beneficial.
Who Is Your Customer?The primary focus of your business is to satisfy your customer with an excellent service or product. Ideal clients are not as difficult to connect with as you may think. Your ideal client is someone who finds value in the product your online hair company offers. You will need to identify ideal clients's attributes, habits, and demographics. In regards to your hair extension business you will need to know who you are marketing to and what need can be solved by offering your product. Another aspect is to know what your competitors offer and what is unique about them. You don’t need to copy them, but you may be able to figure out a process to do it better.
Distribution ChannelsYour distribution channels are the ways your products reach the consumer. There are two types of distribution channels; physical channels and virtual channels.
- A physical channel will be a storefront, a booth, or another location where you sell your hair extensions.
- A virtual channel will be an e-commerce website where customers can shop and make a purchase.
Customer RelationshipsCustomer relationships are the foundation of your business. Customers become dissatisfied when:
- They make a purchase and don’t receive any shipping information
- Ignored and not given excellent customer service
- They don’t have any way of getting in contact with the hair company
- Getting customers
- Growing your customers
- Keeping your customers
Steps to Creating A Customer Relations Strategy
Step 1:Identifying your USP. It will help you be clear about who your customer is and what their needs are.
Step 2:Your next step is to identify your loyal customers and encourage them to either spend more money on a product they like or have them try out a new product. For example, help them to purchase a wig or have them buy one of your extension bundles and a closure.
Step 3:Create a strategy to grow your customer base. The way to increase your customer base is to offer something no one else is suggesting, provide extensions that are of better quality than your competitors, and choose a marketing strategy that will help you stand out from everyone else.
Revenue streamsAs a business owner, having more than one stream of revenue is beneficial. Remember your hair company is a for-profit business and therefore you need to be making money. I have to caution you though! I have been guilty of having a lot of “businesses” and yet have not mastered any of them. To avoid feeling overwhelmed develop a revenue strategy that will help you not only identify areas for opportunity, but will also help you figure out when to launch a new product or service. You must always subtract your retail sales from your wholesale inventory costs to get a clear assessment of your total revenue. Make sure your inventory is priced correctly and pay close attention to the items you donate or give away as promotions. Your revenue will also depend on seasonal highs and lows. I honestly believe you can sell your hair extensions at any time of the year, but you have to have the right mindset. Understanding your revenue cycle will help you identify when you need to introduce a new product or service into the mix. Understanding the difference between profit and revenue will help you a lot. Here’s the definition for them both:
ProfitMoney left from your revenue after returns and discounts
RevenueMoney made from sales. Any of the following revenue streams will help you generate sales. You can combine them or use each one on its own.
- Subscription fee
- Bulk order sales
- Sale of hair extensions or other hair products
ResourcesThe resources you will need for your company go further than just money. If you don't have other resources in place, the money may not matter. While money is important to running a business you will also need other resources to guarantee your success. The following resources are assets for your business:
1. Human resources:Staff falls under the HR umbrella. You may not be at the place where you want to hire anyone, but I can tell you that it’s never too early to prepare for employees. I have to give a shameless plug for one of my friends, Delmar Johnson. She is the HR guru and offers digital products to help you get your HR game on point.
2. Physical resources:Your physical assets are under this category. Any storage, building, or other pieces of equipment you use to run your business are also in this category.
3. Financial resources:Cash, lines of credit, investors, and credit cards are in this category
4. Intellectual resources:Trademarks, your client list/database, and other hair company-specific information are in this category.
Key PartnershipsPartnerships are great ways to grow your company’s visibility and reach. When you do work with anyone make sure all parties are clear on expectations and expected outcomes. The main issue that always arises is when communication isn’t clear. The various partnerships your hair business can benefit from are the following:
Buyer-Supplier:Your company purchases extensions, website creations, and other marketing materials from a reputable company like Private Label Extensions.
Strategic Partnership:You can partner with a company that does not sell the same product as you.
Joint Venture:You can partner with a complementary company to create a new product.
ActivitiesActivities are the things your hair company should be doing to be successful while executing your business model. Your activities will be centered around providing products to the consumer. As you grow, you will need to create other activities to continue the growth. Below is a list of suggestions:
- Host a pop-up event
- Send a survey to your email list
- Create video tutorials
- Set up meetings with potential partners
CostsKnowing your costs upfront can help you become more strategic about how you spend your money within your company. There are a lot of costs involved in running your hair business. The most common expenses will be for a website, inventory (depending o the type of supplier you have), staffing, business registration fees, marketing materials, and technology expenses. You will understand your costs better if you separate them between fixed and variable costs. To help you understand the difference check out the definitions below:
- Fixed costs are those costs your pay every month regardless of how much you make in sales. These costs would include staffing costs and website fees.
- Variable costs are those costs that depend on what you make such as inventory.