Plan how you’ll run the salon daily, even in your absence

I’m an avid reader of your column.

I want to start a salon and a barber shop using Sh300,000 loan from my Sacco.

From my job, I earn a net salary of Sh25,000.

I don’t have any experience in this type of business either.

However, my cousin is running a similar outfit but he seems to discourage me from joining the trade saying that if I am not going to be there full-time, my workers would pocket much of the income.

Kindly help me out because I am planning to employ a person to run it for me.

— Kenneth

Thank you for your encouraging comment, we are pleased to know that this column is of value to you.

The idea of starting a business that increases your income can be in itself thrilling.

However, it is normal to be careful if you do not have enough experience in the business and in addition the time to run it yourself.

The likelihood of the business being mismanaged, including embezzlement of cash by staff is real, and can be very disheartening especially if there is a loan to be paid.

This is why it is important to make up your mind.

Nonetheless, in all instances when venturing into business, a good starting point is to have a business plan.

This will give you an understanding of your target customers, target revenue, expenses and estimates of how much profit you are likely to make.

It will also give you an estimate of the daily cash flow and enable you put in place checks to eliminate pilferage.

A key area of focus in the business plan is how you will run the shop every day to ensure sustainability, even in your absence.

Having tightened the bolts and nuts required for smooth running of the business, you will need to plan and allocate duties to your staff while retaining a supervisory role.

Although there are other ways of operating the business that can simplify these tasks for you, there are few substitutes to having a sound business plan and effective management skills.

They include acquiring a franchise where you pay to use somebody else’s established business name, systems, processes and structure.

The advantage is that you will be given support and guidelines since the franchise owner have standards on quality and importantly, a reputation to maintain.

You will also gain from their solid reputation and branding.

Another option is buying an established startup. This is tricky approach as you are unlikely to know much about the business until you run it.

The third option is entering into partnership with an established outfit such as your cousin’s where you inject fresh capital to facilitate expansion in order to generate more revenues and therefore earn more profits.

However, the success of the business will largely dependent on the time you allocate to it as well as commitment.

Whichever option you choose your worry of hiring and retaining dedicated staff will keep recurring.

The best way is to hire a manager who can handle the day to day issues on your behalf and report back to you daily.

Despite hiring a manager, you will still have to maintain a close touch with the business so as to know what is going on and understand your customers’ needs and expectations.

Consider taking seriously the following oversight duties yourself, ensuring customer service is your top priority, making financial decisions, checking your inventory, hiring new staff and assessing employee’s performance.

We wish you Godspeed.

NEXT WEEK'S QUESTION

I have been reading your articles religiously. My net salary is Sh35,000.

I have cleared all the debts I had accumulated when I was out of work since January and now I need to save after taking 10 per cent of my net as tithe.

After my bills, I would have Sh10,000 surplus.

I am planning to join a sacco in January 2015 to enable me buy a plot in two years time as I have a daughter who will be joining college next year.

How is this plan? What can I adjust? What should I look out for?

— Ann

Fancy Chepkwony, research analyst, Zimele Research. Write to: [email protected]