Los Alamos: Thinking of opening a new business. Hair salon. Advice needed!

[la_user]

Thought I would respond since I have lived in Los Alamos for 19 years, and in that time, have only had one good hair-cut in town. I tend to get my hair cut when I go out of town, because the people that cut hair here might as well put a bowl on your head and trace around it.

That said, things go out of business with regularity here because businesses can't get employees. Everyone in Los Alamos works at the lab, and so retail has to pull people from Espanola, Santa Fe, etc. Why do those people want to drive 35 miles to work in Los Alamos when they can get simiilar wages near their homes?

People in Los Alamos are used to being disappointed in businesses that open here. Pizza Hut was disgusting; they did not deliver and did not clean their store. Taco Bell was before my time. KFC regularly was out of chicken. Since we have to go out of town for some things, we figure why bother with sub-standard attempts at retail?

That said, open a supercuts here and I might go. I might not. Depends on if you could get someone that could cut hair.

[ssintay]

I think that there are two things that are unique to Los Alamos that you may want to consider. First is that the average income is very high. This means that the price of your service is much less important that your value and your friendliness. You may have summarized this, but it is very important to know that your quality will drive more business to your door than your price ever will, and vise versa. There are three salons in the town that I will never go back to because the quality is very poor for the price.

The second thing that you should know is there there are probably a fair number of stay at home hair stylists. I get my hair cut from the stay at home mom down the street.

[FAnalyst]

My take on your questions:
Q. if this type of concept would be well received and/or if there is demand for such an establishment.
A.. I think the concept would be well received and there is demand for such an establishment
The question is how much demand? And is it enough to pay the rent in the new building? How can you anticipate demand in order to build out with the right number of chairs?

Q. it begs the question if nationally recognized chains are poorly perceived and if the community strongly prefers to patron and stick to the local businesses.
A. It doesn't matter since Los Alamos is a transient town with much turnover in employment -

Your comment: A few employees of LANL also indicated that they enjoy visiting their local hair cutter.
My response: I'm a lab employee and walk around town every day. We shop at Smiths and I get my hair cut at Davids (Sports David). The other David moved his shop due to high rent. The new Davids just opened a second shop in White Rock since the White Rock barber died. Both of these guys do well. They have good locations and high repeat business. The other shop I walk by is at Central Park Square near Quiznos and rarely do I see a customer in there. The women who work there all look like they live down the hill in the valley. So the people doing well live here and so do their customers (vast majority).

Other:A nationally recognized hair salon would have several value propositions:

*Speed (average wait time is less than 15 minutes)
*Convenience (no appointment required)
*Value (average price point is $16, which is less than the $25 most local salons are charging)

Again, I am trying to understand the consumer mindset and behavior of the local community.

I don't think any of these bullets matter. My barber is excellent. He charges $17 and no appointment is necessary. I would think your Business Plan has two very important lines:
1) Revenue range
2) Expenses - this has to be high for the new Smiths location. I counted 11 empty store fronts in the new spot and they don't look cheap. The only one building out is the corner unit (A Verizon store)

I've lived in Los Alamos for 12 years and spend a lot of money in town and down the hill. My guess is that a hair franchise is a high risk proposition. Primarily due to 1) and 2) above. Your revenue is limited due to several factors. The town is dead on the weekends except Sunday night when people come back to town for work. Tuesday through Thursday is when most people are in town. When the work day is over the town clears out (4-5 p.m.) The priority here seems to be food, alcohol, cell phone, Car, etc. Hair is not in the top 5.

Another major issue is employees. Minimum wage workers here are in short supply. Most are struggling as they live down the hill and have to pay for gas from Pojoaque or Espanola. When the new Smiths opened they pulled workers from other businesses and now those businesses are struggling to backfill. Businesses are also hurting since many good employees are students who are now going back to school so they need to fill those jobs. Smith's is still short 50-100 employees and keeps holding job fairs. So good luck finding employees who are honest and have a work ethic. Server industry wages here are going up due to the new store.

A hair shop better be good since it is a retail business and you are totally dependent on walk ins. It's not like other service businesses where you can go out and knock on doors or have too much control over the "revenue" and other factors. It's a good idea. Look at your What-if income statements and balance sheets as you do the homework.

Good luck!