Gentlemen's Top Option Paper

Non-franchised Small Business Analysis
(Gentlemen’s Top Option)
Mark Anderson
MGT/418
June 01, 2015
Dan Daily

Gentlemen’s Top Option
Gentlemen’s Top Option is a business located in Burlington, Vermont, that I will be researching I order to purchase the company. This paper will give a brief over view of the business model used by Gentlemen’s Top Option, assess the necessity for training during the purchase of Gentlemen’s Top Option, identify the issues that need to be investigated when performing due diligence and conducting a feasibility analysis, any areas that could be negotiated during the purchase of Gentlemen’s Top Option, and the advantages and disadvantages involved in the purchase of Gentlemen’s Top Option.
The Business
Model
A business model is a design for the successful operation of a business, identifying sources of revenue, what the customer base is, products or services that will be sold, and the details of financing (Investopedia, 2015). Gentlemen’s Top Option business model is to provide full salon services to men in the Burlington Vermont area. Services range from haircuts, grooming (shaves, hair dying, etc.), hair removal, and massages all exclusively designed for men. Gentlemen’s Top Option goes beyond the basics of male personal hygiene and provides its consumers with a refreshing full body experience that relaxes the mind.
Training
In order for the purchase of this company not to affect the daily operations of the business or the standards already established for the business it will be necessary for some training. Training will be needed so that I understand the techniques used for hair removal, hair dying, and general hair care (i.e. cutting, shampooing, etc.). As well as any laws and regulations pertaining to massage or any other areas of the full service male grooming industry that may not be readily available. I would also request to be trained on what the current owners look for when they are hiring new employees/ stylists as this would be helpful in order to hire the best qualified person for the job that will insure the standards set by Gentlemen’s Top Option are maintained.
Feasibility Analysis and Due Diligence
When conducting a feasibility analysis it is important to investigate the market size for the male grooming industry in Burlington, VT, investigate the competitors in the male grooming industry within Burlington, VT, investigate the difference in the services offered by Gentlemen’s Top Option and its competitors, and investigate the demand for full salon services for men in the Burlington, VT area.
Gentlemen’s Top Option’s competitors are going to be other barbershops in the Burlington, VT area. The top competitors to Gentlemen’s Top Option are The Men’s Room, Main Street Barbers, Indigo, and Bugatti Barbers. The toughest completion would come from Indigo since it is also a full service salon. The difference between Indigo and Gentlemen’s Top Option is that Indigo provides services to both male and female clients while Gentlemen’s Top Option caters exclusively to male clients. Gentlemen’s Top Option differs from the rest of its competitors because in addition to regular barber services (i.e. cutting hair, dying hair, and offering shaves) Gentlemen’s Top Option also offers massages and personal hair removal. According to the latest census number the current population of males age 18 and over is around 40 percent of the Burlington, VT population. This makes up the market size since the target consumer are males in the Burlington, VT area and males age 18 and over are more likely be willing to pay for male grooming services. Areas that would require in depth due diligence
would be determining a sales forecast for Gentlemen’s Top Option, conducting a cash-flow forecast for Gentlemen’s Top Option, and estimating the return on investment for Gentlemen’s Top Option.
Areas for Negotiating
Areas where I would try to negotiate with the seller are on chemicals and products that may have already been used or that need to be bought. This is an expense that would have to be addressed in order to continue day to day operations. I would also try to negotiate the cost of any bills pertaining to the location (i.e. rent, water, electric, etc.).For example if I was purchasing the business in the middle of the month I would see if the seller would be willing to lower the price of the sale a prorated amount based on the average of the last six months of billing statements. I would try to get a prorated cost only If the current owner was unwilling to pay the entire current months bills.
Advantages and Disadvantages
Some of the major advantages to purchasing Gentlemen’s Top Option rather than starting a new business in the same industry is that Gentlemen’s Top Option already has an established customer base.
With a new business there would be a period of building when more funds would be need until the customer base was large enough to sustain the business and provide a profit. Another reason to purchase Gentlemen’s Top Option is the fact that it is already staffed with experienced professionals who have been working together for an extended period of time and know what is expected of them. When starting a new business there is a chance during the hiring process that the employee hired may not be a good fit for the company. A third advantage to purchasing Gentlemen’s Top Option is because male grooming is a growing industry. In 2014 GCI reported that make up companies such as L’Oreal and BB were experimenting with products designed for men to add to the male grooming industry (Walker, 2014). Axe has also recently developed new products for males who want to go further than basic personal hygiene (Axe, 2015). The major disadvantage to purchasing Gentlemen’s Top Option is that any negative perception that exists with the company would carry over. If I was to start a new business in the same industry I would have an opportunity to build the reputation of the business from the beginning.
Conclusion
Gentlemen’s Top Option is a one of a kind establishment in the Burlington, VT area which is ahead
of its time. Gentlemen’s Top Option would make a good purchase in a growing male grooming industry. The training need to take over is minimal, the business model is solid, there are more advantages to the purchase of Gentlemen’s Top Option then there are disadvantages, and it is in an area with a large customer base that is still growing.

References
AXE(R) launches white label, A new line of refined grooming products to help guys "feel their finest". (2015). Chemicals & Chemistry Business, 2. Retrieved from http://search.proquest.com/docview/1641130242?accountid=35812
Investopedia, LLC. (2015). Business Model Definition. Retrieved from http://www.investopedia.com/terms/b/businessmodel.asp
Walker, R. (2014, March). It 's a Man 's World: Men 's Grooming Breaks New Ground. GCI Magazine. Retrieved from http://www.gcimagazine.com/marketstrends/consumers/men/Its-a-Mans-World-Mens-Grooming-Breaks-New-Ground-246591491.html