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Franchise versus Start-up

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01 / Oct / 2014

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The Salon by Nikki Williams opened its doors on Harbour Drive less than 2 months ago, a spanking new start up.  Owner Nikki Williams returned to her Coffs Harbour hometown after over six years owning and operating an Ella Bache franchise in Noosa.  She spoke to Mel about the advantages and disadvantages of start up versus franchise.

You bought the Ella Bache salon in Noosa in 2007 knowing that it was losing money.  Were you just young and stupid or did you have a plan?

I’d been working there for six months.   I could see why it was going broke and the reasons were easily turned around.

The owners weren’t therapists, which made it really hard.  They employed five full time staff from day one and that didn’t work.   Productivity was poor and not being a therapist, the owner didn’t know who was good and who wasn’t.  Quality control was difficult.

There was far too much stock.  Lots of different issues.

Were you able to turn things around?

Yes.  When I took over they were losing $72,000 for the year and within the year we were in the black.

Were there advantages to operating a franchise?

I’m very grateful to Ella Bache.  I think it’s great to open your first business with a franchise – they teach you so much.

They provided an annual marketing calendar.  So every month I was given gift with purchases, advertising templates and all those kinds of thing.  The brand’s a lot more recognised obviously.  We would get tourists looking specifically for an Ella Bache salon because they know what they’re getting.

You decided to sell up and come back to Coffs after having triplets.  Why not stick with a franchise? Surely a start up makes your life more difficult.

I wanted to be able to step away and do my own thing.  It gives me a chance to use what I’ve learned over the years.

I can choose my own range now.  We’ve got an amazing new make up range called Jane Iredale.  It’s the only brand on the market that has absolutely no chemicals.  I’m trying to secure NARS lipstick – they just do the most amazing lipstick.

On the cosmeceutical side we are doing things like Vitamin A, peeling, skin needling.  It’s exciting to be able to make my own decisions on products to suit my customers.

I’ve been to every different training course in Australia pretty much.  I’m continually training and I make sure my staff are well trained and keep updating their skills.  So education is a big thing for me and I’m going to create a blog to provide people with non-biased, real information.

Eighty percent of small businesses fail.  How are you doing now and how will you avoid failure down the track?

Some days have been incredible and some days are like, “oh shit”.  But that’s normal.  It takes 12 months to build up a clientele.

I’m very focused on cash flow.  I didn’t spend all our money on the fit out – there’s some left for the early days.  And despite the kids, I’m prepared to do the work myself –I know I have to work my butt off.

Would you like to franchise this business one day?

I would love it to become a chain, but I’d never franchise it.  I don’t want my name to rely on other people’s idea of quality.  I saw how the previous owners ran that salon in Noosa into the ground.  I want to run things my own way.  I’m a bit of a control freak.

What other ambitions do you have for the future?

I want to launch my own skin care range.  I’ve been studying cosmetic chemistry. I’m not going to be a chemist but I’d like to understand it more before I just let somebody make products for me.  It’s a five-year plan.

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