HUMAN HAIR COMPANY ABC Human Hair Company Stu

| June 11, 2016

Question
Running head: HUMAN HAIR COMPANY

ABC Human Hair Company
Students Name
Institution

1

HUMAN HAIR COMPANY

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ABC Human Hair Company

ABC Human Hair Company is company that seeks to offer extensions, braids, custom
wigs and hairpieces. The wide range of products and services makes it the most preferable
human hair company in the city. For instance, the company offers the most preferred synthetic
hair blends due improve the natural and more versatile looks to its customers. The company has
also implemented reliable supply chain that ensures the continuous supply of the hair products to
the customers without any shortages. The company targets a market of around 5, 000 customers
monthly and works with 10 employees well trained and skilled to offer quality services to the
customers.
The targeted population of the customers includes women and young girls who demands
for hair dressing almost every week. However, the company also targets a small population of
men who demands for human hair services. Thus, the demand for the human hair is quite high in
the city. The company has adequate hair dressing equipments including the dryers and other
units. The business is also located in strategic location in the city to ensure that it is more
accessible to the customers. In order to market the business, the company will invest on both
online marketing campaigns such as the ads and television campaigns (Chua, Chrisman,
Kellermanns & Wu, 2011). The two marketing channels are quite influential due to their wider
coverage and access to increased customers. The online ads will include the social media ads, as
most of people rely on the social media to obtain information relating to different aspects of their
lives including fashion. The company will rely on the bank loan and borrowing from friends to
finance the initial start up costs of at least $250,000 and operations of the business.

HUMAN HAIR COMPANY

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The two companies Natural Human Hair (NHH Company) are appropriate benchmark to
my current business venture. The Natural Human Hair company is brand of the former CIS brand
of Uzbekistan. The company was started as small family business years ago when it only
provided one kind of hair. However, for years now, the company has established itself to offer
wide range of hair and other different products. The company is focused on the sales of natural
hair as well as providing quality and satisfaction to the clients. In comparison with my ABC
Human Hair company, the company was only financed by family savings and money borrowed
from relatives (Chua et al., 2011). The family who started the business was aiming at growing
the company slowly into a huge business.
In contrast, my conceptual venture only focuses on starting a well-established business
with finances from bank loans and borrowing from friends. This means that the company will
incur some costs of capital and interests during the repayment of the loans of borrowed. Thus,
the business will face increased costs from the costs of borrowing unlike the freedom enjoyed by
Natural Human Hair Company. Based on the comparison, it is clear that NHH enjoyed some
financial freedom and progress through the investments of the family savings, while by business
venture has an opportunity to grow and successes rapidly, but it faces increased risks of repaying
the loans borrowed from the bank (Atherton, 2012). The managers of the company must
implement appropriate internal controls to avoid insolvency of the company.
In addition, Diamond Virgin Hair is also different from my business venture as it was
fully financed by family and personal savings. Diamond Virgin Hair company has grown for 10
years now following its commitment to offer high quality of the human hair. The mission of the
company was targeted towards ensuring that the company does not borrow any money to invest

HUMAN HAIR COMPANY

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in its business. It relied solely on the family investments and personal savings as well as retained
earnings to finance its operations. This is quite different form my business model and venture
that will rely on bank loans and borrowing for friends to expand and growth the business.
My business venture seems to be funded differently from the two companies due to the
borrowing of funds from the bank through a loan. However, it is also funded similarly due to the
borrowing of finances from friends. It is not costly to use personal savings and money from
friends to finance business venture as in the case of NHH and Diamond Virgin Hair Company.
However, my business venture is likely to face increased costs and expenses due to the
borrowing of money from bank to finance the start up costs and the operations of the ABC
Human Hair Company (Schwienbacher, 2014). In summary, it is clear that reliance on bank loan
would not offer financial freedom as expected in the Human Hair industry. Both Diamond
Virgin Hair and NHH started their operations with personal savings and family incomes towards
growing their business. My business venture should be well reviewed in order to ensure future
financial success and performance.

HUMAN HAIR COMPANY

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References

Atherton, A. (2012). Cases of start-up financing: An analysis of new venture capitalisation
structures and patterns. International Journal of Entrepreneurial Behavior & Research,
18(1), 28-47.
Chua, J. H., Chrisman, J. J., Kellermanns, F., & Wu, Z. (2011). Family involvement and new
venture debt financing. Journal of Business Venturing, 26(4), 472-488.
Schwienbacher, A. (2014). Financing the business. Routledge Companion of Entrepreneurship,
London, 193-206.

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