8.2.5 Case Study

Let´s continue with the case of the two beauty salon entrepreneurs who merged their business activities. Important decisions had to be taken based on careful analysis and estimation.

How? After thorough discussions and deliberations, and development of the original idea, which was to hire a common space in order to achieve optimisation of the expenses. New services to be added were also considered. The next step was to gather all necessary data: rents of spaces suitable for their needs, prices of and specifications of equipment and tools offered by different manufacturers, average salaries of skilled workers in their field, prices and quality of consumables. An important part of their market study was to find out about the demand and supply of similar services in the area, their quality and price levels, the willingness of their customers to accept the new form of business and the possibilities to attract new customers. And, before taking the final decision to undertake the first real step, some simple arithmetic calculations had to be done to estimate the amount of the initial investment, when the return on investment will start, if additional investment will be necessary.

Why? All those efforts were for the sake of the business, its development and growth. Important steps could not be taken without careful assessment of potential risks and opportunities.