Thirty-nine-year-old Tracey decided to buy a business to supplement her income, ultimately, perhaps, to replace her main income given the stressful nature of her job.
She thinks the hair salon she bought in December 2007 could ultimately serve as a retirement fund, if and when she resigns from her role as the head of a local council department.
With no hairdressing experience herself, it’s clear she bought Hair Line – which she renamed Turning Heads – as an investment rather than an enterprise she would run day to day.
She left the existing manager in place and continues to work full-time, although her ultimate aim is to quit and live off her investment.
Extra costs
So why did she choose to buy a hair salon?
“I was looking for something that was a complete contrast to my work,” she explains, “because most people who do my kind of work go in via consultancy or training.
“So I decided to do something a bit girly. It was between that and an up-and-running beauty salon.”
The extra costs concomitant with not taking a hands-on role were uppermost in Tracey’s mind when she was searching for a business.
The extra costs concomitant with not taking a hands-on role were uppermost in Tracey’s mind when she was searching for a business
“I had looked at about five, which were all in the same sort of field: beauty and hair. Some weren’t in the right area and some weren’t turning over enough.
“Because I’m not working in it and I have to pay a manager it’s got to turn over a reasonable amount.”
The business she plumped for offered a magic combination of pedigree and potential.
“It’s in quite an affluent area, it’s been going for about 40 years, it was turning over a reasonable amount and it had the potential to do more.”
Tracey bought the salon from an experienced entrepreneur who had decided to reduce his commitments as he entered his twilight years.
Because he still owns the building (as well as a barber’s shop upstairs) she has to pay him rent.
Necessity being the mother of invention, this extra financial burden drives Tracey to look for ways to improve the business’s performance.
Management experience
“I don’t take anything from it at the moment; I’m putting it all back in.
“It’s probably got the capacity to do a quarter to a third better than it is doing.
“The previous owner was retiring and not really interested in generating any more revenue. But he didn’t have to pay rent; I’m having to pay £15.5k.”
As a novice in the industry, Tracey leaves the salon’s manager of five years “to do the technical stuff”. But she has draws on her considerable management experience to streamline other areas of the business.
“In the last six months I’ve changed its name, changed the décor a bit, done some advertising, given the staff uniforms, ordered things in ways which make more business sense – because although I haven’t run a business before, I have been managing big budgets for a long time.
“And then at home I do the filing and invoicing and so on. At the moment I’ve got an accountant who does the wages because I haven’t got the experience or the time.”
“But in terms of the day-to-day running, I don’t step on the manager’s toes really.”
Despite working full-time, Tracey still finds time to visit the salon about three times a week to see how things are going.
She was just as circumspect about getting an assessment at close quarters of its performance before the purchase.
“I sent friends and family in at different times of the week,” she says. “On a Saturday when it’s busiest, on a Monday when it’s going to be quieter, and on a late night, which is a Thursday.”
