FUNDAMENTALS OF ENTREPRENEURSHIP

(ENT300)

LECTURER

(Ahmad Kamal Bin Ahmad Yusop)

WE CUT HAIR STUDIO

External Problems

Prepared By:

MUHAMMAD AMEER REDZUAN ROSLAN 2015812422

NUR DINI ALYA BINTI ROHIMI 2015503269

NUR SYAFIQAH ADLIENA BINTI ABDUL KAHAR 2015370185

NURUL IZZATI BINTI ABU BAKAR 2015953829

SUBMISSION DATE:

23 MAY 2018

AC1205A

DPLOMA IN ACCOUNTING INFORMATION SYSTEM

FACULTY OF ACCOUNTANCY

UNIVERSITI TEKNOLOGI MARA

PERAK
Table of Content

NO. SUBJECT PAGE

1. Executive Summary 1
2. Introduction 2
3. Company Information 3
4. Company Analysis (SWOT) 5
5. Business Problem 10
6. Recommendation and Improvement 15
7. References 17
8. Appendices 18
1.0 EXECUTIVE SUMMARY

Case study is important for students to get the real pictures in business industry.
Students can learn the best way to satisfy various types of customers. The company that
has been choosing gave the information to perform this case study.

This case study is to address We Cut Hair Salon which has been open up their
business for almost 10 years. This company has dominated market in barber industry
located at Tapah. This company displays the perfect analysis of strengths, weakness,
opportunities and threats (S.W.O.T). Analysis will be identify that will keep the business
improve the company’s problem and use every single opportunity given, be well prepared
for any threats in the future. There are few problems that arises in WCHS are competition
between companies, licensing and regulatory concerns and personal injury and treatment
risk.

There are some solutions that has been listed out which is the business should
observe their other competitors. WCHS also can create a new idea by generate same
new services to their company. The most important things are WCHS must concern
about their customer satisfaction for them to get a strong customer base.

Another solution for licensing and regulatory concerns is WCHS must stay up to date
with the latest requirement of their state. This has to ensure that the business is stated
and registered in regulatory of their state which is Tapah. WCHS has to do more reading
about state legislative and regulatory updates.

Lastly, for the personal injury and treatment risk in WCHS, the business has to
practice by applying OSHA standards at their workplace. Carry sufficient insurance can
protect WCHS business from financial loss.
2.0 INTRODUCTION

We have chosen We Cut Hair Studio (WCHS) as a source of our study for completing the
assignment of Fundamentals of Entrepreneurship-ENT 300. The study gains the information
through interviewing the workers and the manager of WCHS. This interview was conducted
on 10th May 2018 by four students of UiTM Tapah.

The purposes of the study is detect any problems arises in the business and help find a ways
to resolve the problems so that the business can keep growing in the future. The study was
performed in order to detect the strength, weaknesses, opportunities, and threats arise in the
business. The student needs to find the most crucial problems in the business and suggest
an alternative solution to help the business overcome the problem.

There are a few problems detected in We Cut Hair Studio during the study being carried out.
There are:

 The competitions between other competitors are so fierce because there are lot other
barber and hair salon shop around.
 The licensing and regulatory concerns as the business need to renew their business
license
 The personal injury and treatment risks as the business need to responsible for any
injury occur to their customer during the process of services.
 3.0 COMPANY INFORMATION

We Cut Hair Studio (WCHS) were established in year 2008. It is located 7 kilometer
from UiTM Tapah and the business is at the center of old town in Tapah. The
business was originally founded ten years ago by Mr. An Sonn to support the family
financially, so he decided to pursue in this business. The business took place on
second floor of the shop house building in Tapah. Mr. An Sonn chooses this area to
open the business because it is the closest to his house.

The founder, Mr. An Sonn is married man and well known as ‘boss an’ among his
regular customer. He is a highly skill hair stylist and even have professional certificate
in this sector.

Mr. An Sonn is currently assisted by six (6) workers in conducting its business. The
workers mostly Chinese woman and he also hire aboriginal people to give job
opportunities to them. There are various areas of work and each of the workers has
their own work to do. For example, cutting the hairs of the customer and cleaning the
workplace.

Mr An Sonn
Manager

Deborah Kim Siat

Siew Lin Mirah Chi Li Fera
Lee Loy

In WCHS, the manager using Sole Proprietorship as their business model. Sole
Proprietorship is a business that legally has no separate existence from its owner.
Income and losses are taxed on the individual personal income tax return. It is the
simplest business form under which one can operate a business. The Sole
Proprietorship is a popular business form due to its simplicity, ease of setup, and
nominal cost.
We Cut Hair Studio provided services varying from basics like haircut to hair perming
and hair treatments. The price they offered also ranges from as low as RM 8 up to
RM 60 depending on the types of services requested. Although faced by many
competitors, they do not intend to decrease their price nor renovate their place as
they believe that the customers will come back to them due to their high quality
services.

WCHS open from Tuesday to Sunday except Monday. The business hour is from
9.00 AM until 7.00 PM. The business operation process will summarize in figure
below.

Ask and
give
suggestio start the payment
Greet n to Prepare process to made by
customer customer customer get the the
what hair done customer
styles that
they want

The financial statement for WCHS not specially stated but it has been assumed that
averaged at RM100, 000 per year. According to Mr. An Sonn, the profit majority came
from their regular customers and among men customers. With the existence of UiTM
Tapah, the business can increase the amount of their customers and thus, increase
their profit.
4.0 COMPANY ANALYSIS (S.W.O.T)

STRENGTH WEAKNESSES
• Loyal customers • Language barriers
• Highly skilled staff • Not well known to others
• Affordable price • Small operational area
• Open at convenient hours • Businesss are targeted more
towards men

OPPURTUNITIES
• The business should open
new branches at more
strategic place
• Add more variety to their
services
• Gain more loyal customer
from students
• Follow the current trend
THREATS
• High competition in the
market
• Customer's changing tastes
• Competitors provide same
services at low prices
• Cost of having the best stylists
Strength
 Loyal customer
Customer loyalty can be said to have occurred if people choose to use a
particular shop or use one particular service, rather than use other shops or
services made by other companies. The business get loyal customers from
providing excellent customer services and the business always listen to their
customer needs and always try their best to provide what their customer wants.
Not only that, the business needs to go above expectation what customers wants
and that is cause of the customer loyalty. Other than that, the customer always
want to go back to the shop because of the staff always ask for their feedback
and always improve what customer feel about their services. Thus, make
customer satisfied towards their service and come again to enjoy their services.

 Highly skilled staff

A skilled staff is any staff that has special skill, training, knowledge and ability in
their work. All of the staff in We Cut Hair Salon (WCHS) is skilled staff because
they have learned their skills on the job through technical school or courses.
There are skills that needed to work in a salon and WCHS are very concern about
the skills thus all staff needs to acquire a certificate to acknowledge the skills.

 Affordable price
Price has always been and will always be a significant indicator of quality. WCHS
are taking on high quality service with affordable price range to win their customer
hearts. WCHS provide affordable price range with an option entirely up to the
customer. For example, WCHS offer different staff such as director, senior and
junior staff with different price range and different quality services. Therefore,
customer can choose their own preferences.

 Open at convenient hours

WCHS business hours are from Tuesday to Sunday at 9.00 AM to 7.00 PM. This
is very convenient to many people around because they can go to get their
services on weekend. Also, it is very convenient business hours to student who
likely to get their hair done on weekend rather than weekdays.
Weakness

 Language Barriers

As the business mostly hires Chinese and aboriginal people, sometimes the
communication between the customer and workers will be difficult as they speak
in different languages. When the worker could not get what the customer request
for their services, chances of customer dissatisfaction with the service is high and
thus will lead to loss of customers.

 Not Well Known To Others

The operational of the business is on the second floor of the shop house in old
town in Tapah. As the building of the shop is quite old and obsolete, mostly of the
people in Tapah does not know the existence of this shop. People will usually go
the barber shop that visible in their view so they don’t have to waste their time in
searching for other barber or hair salon shop. The customer who goes to WCHS
usually are being recommended by the customer who went there regularly

 Small Operational Area

As the shop located at the second floor of double storey shop house, the working
area is small and limited for only a few customers to get in at a time. There are
only five slots for the customer. For the customers who not being served have to
sit outside waiting their turn next. This will result in customer dissatisfaction if they
have to wait too long to get their hair cut. The space in the shop mostly
dominated by machine and product they sell.

 The Business Targeted More On Men Customer

The target market of the business is young men around the area that in search of
abnormalities for their hair style. Because the business really updated to current
hair style, it get to attract more other customers beside their target market. The
business sometimes get customer among women with different races but not
Muslim woman as the business does not provide with facilities that are required
by the Muslim woman.
Opportunities

 The business should open new branches at more strategic place

Consequently, location often plays a significant role in a company’s profit and
overall success. As for WCHS should look forward to open their new branches at
a strategic place such as place that has more large population of people.
Strategic place is important in marketing a business as it must be suitable for
customer to get to know their business.

 Add more variety to their services

WCHS can add more variety to their services to attract more customers come to
their shop. For example, playing a quick video game is a great way for a customer
chill while they are waiting for their turn to get their hair cut. In addition, service
can be added such as manicured nails for men and women. Among the available
services are shampoos, perms, colors and haircuts. Removal and trimming of
facial hair by a skillful worker also can be added to WCHS services.

 Gain more loyal customer from students

No matter the size of the business, customer loyalty is incredibly important.
WCHS should take the time to attract potential loyal customers from students
such as make a half price students and give extra perks to existence regular
customer by setting up a reward system for encourage them to stick with their
business.

 Follow the current trend

Making facial hair work like mustache beard are common highly requested
nowadays. There are many trend of this combination of beard and mustache that
can be done. WCHS should take the opportunity and add this service to their
business. Trimming and shaving is the basic of the service that keeps the
mustache in line but allows the beard to have more depth and dimension.
Threats
 High competitors in market
There are a lot of hair salons and barber shops offer same services with different
prices. The business cannot force other hair salon to move, but the business can
create the new strategies to counteract the competition, retain the customer base
and bring in the new customers. These might include introducing new styles and
providing new promotions.

 Customer’s changing tastes

Customers have their own wants and needs. Different people have different style
and tastes. Some people like to have a blonde hair other people like to have
natural hair same goes to new hair styles. People will change their hair style
depends on suitable occasions or depends on latest trends. As a hair stylist,
WCHS need to update about latest trend and hair style to make sure the
customer will satisfied with the services.

 Competitors provide same services at low price

Most of hair salon or barber shops might offer a lower price to attract customer to
pay for the services but not all business gives the best quality due to the price.
For customer who cares about quality, they might purchase for expensive
services to make sure it may be worthy to them as long as the quality is good.
Despite, WCHS also can provide a discount price or special price to retain the
customer base.

 Cost of having the best stylists and technicians

Since there are lot of hair salons and barber shops, most of the business may
hired the best stylists into their business to present the best hair style according to
the latest trends. The best stylists can help the business to bring in new customer
because customer might satisfy with the services provided.
5.0 BUSINESS PROBLEM

From the past until now, problems are common things that always happen. According to
the SWOT analysis broadcasted about the We Cut Hair Saloon (WCHS), there are few
problems faced through this company. This may cause companies to have several major
problems in their daily work.

5.1 Competition between companies

The salon and barbershop generally is very competitive business, so the business
need constantly keep their services relevant. Rational customers will choose the
cheaper of any two perfect competitors. In business, competition is undeniable
because they will always have other companies that provide the same services.
Thus, the business should give more attention to their competitors.

Solution: Observe Competitors

Observe every aspect such as weakness, strength, and price and quality offer
of competitors to allow the business to produce a service more efficiently than
other competitors.

Solution Advantages Disadvantages

Observe It would force the business to
competitors provide better quality service.
Can be a step ahead from their
competitors.
Lead to customer satisfaction
that can benefit the business in
long term.
Competitions company’s
marketing strategy is
always fluctuated from
time to time and difficult
to observe from time to
time.
Solution: Create New Idea

Company can create or generate a new idea to the market. Part of developing
and working on a business idea is finding competitors. Competitors must be
analyzed to ensure the business separate their business idea from similar
ideas, services that are already available.

Solution Advantages Disadvantages

Create new idea Developing a single idea into a
successful brand.
Will attract the customers to
come to their shops more often
than other company.
New ideas will not always
be accepted by the
customers.
The idea might already
exist in the market and
cannot be applicable in
the business.

Solution: Concerns about Customer Awareness

A business must concern about their customer awareness. Notice your

customer’s body language and listen to what they are saying about their
experience and level of their satisfaction towards the services. The business
should try to find solutions before the problems grow into a negative
experience and that may prevent the customer from returning and go to others
competitors.

Solution Advantages Disadvantages

Concerns about Help the business to be more The business will be
customer persuasive in their marketing easily faded away from
awareness effort and towards their their target market.
competitors. Can reduce a loyal
customer.
5.2 Licensing And Regulatory Concerns

The salon and barber shop industry has many regulations and licensing
requirements designed to ensure the safety of employees and customer. It is
include health inspection certification, building code compliance certification and
business owner’s license. It is to ensure that the business follow the business
ethics stated in the law. There are many businesses that fail to do so, it may affect
the business in a long term.

Solution: Stay Up-To-Date With the Latest Requirement of Your State

The business must follow the business ethics stated in the law and to identify
the business and to protect the public health and safety.

Solution Advantages Disadvantages

Stay up-to-date Can avoid from fines for non- Cannot open up a new
with the latest compliance and limit any location.
requirement of your potential liability from formal May hit costly penalties
state customer complaints. and interest by the
government.

Solution: Read about Information about State Legislative and Regulatory

Updates

The business will be alerted of changes that they need to consider and the
consequential actions that will need to be taken to stay compliant and give the
business a competitive edge.

Solution Advantages Disadvantages

Read about Be able to make a better Cannot be able to make
information about decisions and spot threats and decisions and cannot
state legislative opportunity early on. earn the trust and respect
and regulatory of the customers in the
updates business
5.3 Personal Injury And Treatment Risks

The business can creates the environment where accidents and injuries can
happen at any moment. There are major and minor injuries to both customer and
employees can be caused by slippery floors due to product spills and hair
clippings, burns from dryers and curling irons, cut from razors and repeated
exposure to hair products and coloring agents. There are also risks from services
that the business providing such as chemical get into a customer eyes or they
suffer an allergic reaction to a product.

Solution: Applied Occupational Safety and Health Administration (OSHA)

OSHA is very important aspect that the business should take care of. OSHA
mission is to prevent work-related injuries, illness and death. Fail to follow the
OSHA may result in future. OSHA means to keep maintain a reporting and
record keeping system to keep track of job-related injuries and illness and
providing training programs to increase knowledge about occupational safety
and health.

Solution Advantages Disadvantages

Applied Lead to safer workplace and Lack of information
Occupational greater productivity and about OSHA.
Safety and Health profitability. Threatening the business
Administration Customer confident to use to injuries.
(OSHA) business services.
Solution: Carry Sufficient Insurance

Insurance is a means of protection from financial loss. It is a form of risk

management primarily used to hedge against the risk of a contingent and
uncertain loss. The business should protect its company with business
insurance that cares physical damage to the property or injuries to others.

Solution Advantages Disadvantages

Carry sufficient Certainty protection.
insurance Helps to protect business
owner.
Important as a form of
protection against personal
liability.
May take time to process.
Can be expensive.
Need a professional
business insurance
agent.
6.0 Recommendation And Improvement
There are solutions for each problem. Below is the best solution that should be adopted
by the company.

6.1 Problems: Competition between companies

Solution: Create new idea
Strongly suggest that the business should create or invent a whole new idea
to be present to the customers. The business is already in the market for 10 years
and this is the best solution to compete their competitors by presented a new idea
that customer always wanted to see. Customer will always pay some attentions
that are differently from other. Trying new things is always good for the company
and attract more new customer to try the services offered. Always try to search
fresh idea that will help the business to compete with other company and always
try to be a better version every time. The business must communicate with their
staff and explore to search and come out with new ideas that will significant help
the business.

6.2 Problems: Licensing and regulatory concerns

Solution: Stay up-to-date with the latest requirement of the state
Every business in each state acquired a business license to run the business,
so ultimately WCHS have to check with state and local agencies to determine
their business license. A license and regulatory concern will ensure that staffs are
protecting if they are injured as well as protecting their customers. If WCHS obtain
a license for their business, it is to ensure their personal information remains
private. Customers will more readily trust a company that has a license.
Furthermore, ensuring the business is registered, the license helps to formalize
the economy. WCHS can register their company at SSM by register online under
guidelines for registration of a business.
6.3 Problems: Personal injury and treatment risks
Solution: Applied Occupational Safety and Health Administration (OSHA)
In order to keeps the business running well without any injuries or unfortunate
accident occurs, the business must apply OSHA. OSHA sets safety and health
standards for many work environments and ensures that employers comply with
those standards. The purpose of OSHA is to promote and encourage
occupational safety and health awareness among workers and to create
organization along with effective safety and health. Employers and employees of
WCHS responsible to ensure the working place are safe and do not exposing the
employees to any kind of danger that can become a risk to their health. The
business also has a responsibility to provide necessary information, instruction
and training as is necessary to ensure the safety and health at work place.
7.0 REFERENCES

7.1 https://www.thehartford.com/business-playbook/in-depth
8.0 APPENDICES