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Sun 25 May 2003

The Hair-Cut Machine

Category : Commentary/haircutmachine.txt

I had my hair cut at a Japanese-style S$10/10-minute hair-cut shop. It's a great example of a business machine.

Please read Seah Chiang Nee's excellent summary of the current state of business in Singapore - "A sign proclaims $10 for 10-minute haircut and I realised why" - which could be dugged out from a Google search.

Firstly, it's clean. And they promise to get it done in 10 minutes. Because of SARS, I didn't want to hang around in close proximity with 10 other people for more than 10 minutes. So that was fine by me. The barbers/hair-dressers (mostly girls) look trendy enough to risk a try. So, the business proposition was right on the money.

Next, they solved the problem of pilferage (the hand-in-the-till problem) by using a machine to collect the money. You slot a $10 note into a machine and get a waiting card. In one fell swoop, they did away with the cost of having a cashier. And collected useful statistics.

For example, the owners can have (if they want to) accurate records of the day's takings, the pattern of use (e.g., are they busier in the morning, noon or night?), how long people have to wait, the time each customer took (I've seen one done in five minutes, some in fifteen), which of their crew worked the fastest, the slowest, etc...? All these can be used to fine-tune the system.

Another part of the system concerns the need to be hygienic. They have a steriliser at each workstation - for the combs, brushes, vaccumn cleaner nozzle - anything that comes into contact with the customer. The cloth that keeps away the falling hair does not come into direct contact with your neck. They use a disposable liner. They were creative in finding ways to be hygienic and ended up with a "unique selling proposition".

And here is a good example of the concept of "triage" in action. There are many other services a hair salon offers - a hair wash, hair colour, manicure, even gossip, and a constant stream of chatter designed to create opportunities to sell more services. The $10 hair-cut shop pruned away at these possibilities to select only those they want to offer as a finely integrated package - quick, reasonably priced, hygienic, no-chatter, and, because they only do hair-cuts, they need a much smaller space than any other salon, which results in lower rents and greater flexibility in finding available shop space, and greater turn-over (say, $360 per hour, for a six-seater shop, multiply by 10 hours from 10 am in the morning till 9 at night, equals around or above S$1500/day, assuming 40% capacity).

I believe the best business ideas are those that emerge as a finely balanced gestalt. If you can do that, and it makes money, and you can run it using mere mortals (e.g., you don't have to worry about an up-and-coming David Gan or Georgie Yam stealing away your customers - because there's no time). Now, if you can do that, what do you do? Open as many branches, as fast as you can.

Posted at 2:57AM UTC | permalink


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