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The Profitability of Hair Weaves · Money And Wealth With John Hope Bryant

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Speaker 1: Welcome the Money and Wealth with John Hobryant, a production
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Speaker 1: of The Black Effect Podcast Network and iHeartRadio. Yo Yo,
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Speaker 1: this is John Hope Bryant, and every week I come
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Speaker 1: to you with a new prescription to unpack our economy
0:25
Speaker 1: and repack it with you and mind breaking this down.
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Speaker 1: So that's not intimidating or overwhelming, and you're there's nothing
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Speaker 1: to fear. In fact, there's everything to embrace. And so
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Speaker 1: we're going to have some fun or we're not gonna
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Speaker 1: pick it. We're not gonna pick on anybody. It could
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Speaker 1: be a lot of laughter and a lot of jokes
0:46
Speaker 1: for this this segment that we wanted to including my own.
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Speaker 1: I used to have a shag. I had a hair
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Speaker 1: extension when I was nineteen years old. I think I
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Speaker 1: had long hair back in the day. The Jerry curls
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Speaker 1: were that and I wanted I wanted the hair extensions.
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Speaker 1: I had it down to my collar right. It was
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Speaker 1: two inches or whatever, but I got it done. Yeah,
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Speaker 1: So I'm not hating non it. Members of my family
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Speaker 1: growing up part took in the consumer product called hair waves,
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Speaker 1: and so it's all good. I just want you to
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Speaker 1: benefit from it. I want you to benefit from the
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Speaker 1: business model. I want to break down what's going on
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Speaker 1: in our communities. So the name of this, the topic
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Speaker 1: of this week's podcast is do you know how the
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Speaker 1: profitable hair weaves store business model actually works and who's
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Speaker 1: working in it? And here's the answer. I'm going to
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Speaker 1: break it down for you and take you from the
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Speaker 1: streets to the suites and then return you back to
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Speaker 1: the streets as in the consumer market, with you in mind,
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Speaker 1: so that you can take control of your in your destiny.
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Speaker 1: Before I get into this, why did I do this?
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Speaker 1: I'm going to break down a range of store business
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Speaker 1: models or business models that affect our community that we
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Speaker 1: see all the time and we walk pot basted, drive
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Speaker 1: by it, par take in it, pay it no mind,
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Speaker 1: don't think about it. But it has everything to do
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Speaker 1: with our quality of life and the lack of wealth
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Speaker 1: creation maybe that we could be participating in because some
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Speaker 1: of this stuff is almost market bulletproof, like hair care products.
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Speaker 1: But before I get there, let me tell you how
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Speaker 1: I've been thinking about doing this topic for years now
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Speaker 1: and why I was in Africa had to be ten
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Speaker 1: years ago. I was in Uganda, I believe it was
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Speaker 1: I was giving a speech on economic empowerment. And on
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Speaker 1: the way back to the airport, the hosts, We're trying
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Speaker 1: to get to the airport, and there was no real
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Speaker 1: traffic coordination or traffic laws. It appears that I could
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Speaker 1: discern there and this is more than ten years ago.
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Speaker 1: They might have gotten better since. But on the way
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Speaker 1: there that my life was flashing in front of me
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Speaker 1: from cars zipping in every direction. I noticed to the
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Speaker 1: right there was a fruit and vegetable stand. And in
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Speaker 1: the middle of this African country, this fruit and vegetable
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Speaker 1: stand was run by an Asian family or an Asian group.
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Speaker 1: They look Chinese to me. Now let me start by saying,
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Speaker 1: I'm gonna mention Asians a couple of times in this podcast.
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Speaker 1: I'm not hating on them. I think that this is
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Speaker 1: brilliant that they found a way to take advantage of.
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Speaker 1: My question was, how in the heck did my Chinese
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Speaker 1: brothers and sisters. And I'm gonna do a whole podcast
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Speaker 1: on China and Africa, by the way, so hold on
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Speaker 1: for that one. But how in the heck did my
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Speaker 1: Chinese brothers and sisters find a way to sell you
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Speaker 1: your own fruits and vegetables? On a street corner in Uganda.
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Speaker 1: I think it's brilliant. I just and know if people
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Speaker 1: walked her was walking by them like it was normal
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Speaker 1: and clearly taking advantage of the opportunity to buy from them,
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Speaker 1: and no one said a word. I did, I asked
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Speaker 1: my driver, who seemed quite befuddled. And I had come
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Speaker 1: there to talk about economic development, economic empowerment, so I
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Speaker 1: was a little I'm choking on. I'm choking myself because
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Speaker 1: this is such a fascinating topic for me, and so
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Speaker 1: coming closer to home, how many hair weave stores now
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Speaker 1: we all know, I mean you see them everywhere you see.
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Speaker 1: Sisters are sisters? Why am I picking on sisters? No?
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Speaker 1: They look beautiful and it's it's some of this. I mean,
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Speaker 1: this is true art form. So this is this is
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Speaker 1: I'm just simply asking a question of how big do
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Speaker 1: you think this market is for harroweave stores? And let
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Speaker 1: me see if I can unpack where the customers are
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Speaker 1: for these stores. Number one Atlanta, Georgia, the Black Mecca
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Speaker 1: they call it. Number two Houston, Texas, Number three Los Angeles, California,
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Speaker 1: Number four in New York City, five Chicago, Illinois, six
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Speaker 1: Detroit Michigan seven, Dallas, Texas eight, Washington, d C. Now
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Speaker 1: I've already given this away a little bit. I've already
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Speaker 1: mentioned that Atlanta was a black mecca known for its
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Speaker 1: vibrant cultural scene, and it has of course numerous beauty
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Speaker 1: so lines and beauty supply stores and yes, Harroweve specialty stores,
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Speaker 1: et cetera, and most notably in places like Decatur in
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Speaker 1: southwest Atlanta. But all over the city you have Houston,
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Speaker 1: which has a large black population, and LA with a
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Speaker 1: diverse but notably most of the stories are in South
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Speaker 1: LA at Inglewood in Los Angeles. So wherever you are,
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Speaker 1: Hello the third ward by the way in Houston, Texas
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Speaker 1: and other inner city neighborhoods and hubs for beauty supply stores.
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Speaker 1: New York City, Harlem, Brooklyn, Queens and notable areas with
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Speaker 1: high concentration of beauty supply stores. And South Side and
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Speaker 1: West Side of Chicago. Same my yeah, my family actually
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Speaker 1: is in that business. In Chicago, East Detroit in neighborhoods
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Speaker 1: like Midtown have significant numbers of beauty supply stores. Give
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Speaker 1: me shout outs for these places where you live, and
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Speaker 1: you know where I'm talking about, Dallas, Texas. South Dallas
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Speaker 1: and oak Cliff are prominent areas for beauty supply stores. Washington,
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Speaker 1: d C. Anacostia in Northeast d C of numerous beauty
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Speaker 1: supply stores. What's consistent about all of these places? Black people?
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Speaker 1: We are several billion dollar market billion with a B
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Speaker 1: for hairweave stores. I didn't say beauty supply. I didn't
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Speaker 1: say the beauty industry. Just to give you some context
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Speaker 1: the beauty industry. The American economy is twenty six twenty
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Speaker 1: seven trillion dollar a year economy. The whole economy, they
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Speaker 1: call it GDP gross domestic product, largest economy in the world.
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Speaker 1: The haircare beauty broader segment is about ninety three billion
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Speaker 1: big several billion, at least two and a half the
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Speaker 1: three billion alone is this submarket I'm about to tell
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Speaker 1: you about, and of hair weave stores, most of which
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Speaker 1: we don't own. So we're buying it, but we don't
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Speaker 1: own it. The fact that we don't own it is
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Speaker 1: my issue, not the fact that we're buying it. And
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Speaker 1: so be very clear on what I'm talking about and
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Speaker 1: why I've decided to focus on this area. The target
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Speaker 1: audience are primarily women of various age groups who are
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Speaker 1: interested in the hair, weaves, extensions, and related hair care products,
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Speaker 1: although men partaking this as well. I tell you I
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Speaker 1: had a hair extension when I was nineteen twenty years
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Speaker 1: of age. Bill shag in the back. I've already mentioned that.
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Speaker 1: So I'm owning my piece. Location of high traffic areas
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Speaker 1: near other couple of businesses like beauty salons, barber shops,
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Speaker 1: fashion stores, accessible and highly visible. Now, one of the
9:07
Speaker 1: reasons why Black communities are targeted is because we have
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Speaker 1: such value for culture and cultural looks, and we put
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Speaker 1: a high index. We underscore the different fabulous looks that
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Speaker 1: we can can create, and that includes hair texture, and
9:32
Speaker 1: we changed up our looks and we're as a result
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Speaker 1: of that a pop culture. We are, you know, interesting
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Speaker 1: as relates to look, feel, fashion, music all around the world. Again,
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Speaker 1: are we owning it? Is the question I'm asking here now?
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Speaker 1: Who owns these businesses? Many Asian immigrants, particularly Koreans, have
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Speaker 1: established strong networks and business knowledge and the busy beauty
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Speaker 1: supply industry, including sourcing and distribution. Over time, these businesses
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Speaker 1: have developed a deep understanding of the preferences and needs
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Speaker 1: of Black consumers, which help in tailoring their offering. They
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Speaker 1: started in the sixties and the seventies actually coming into
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Speaker 1: these neighborhoods and specializing and God bless them again. They've
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Speaker 1: done a brilliant job. And I'm going to talk to
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Speaker 1: you about how we can potentially join them in dominating
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Speaker 1: this industry within ten years. Sharing in the industry or
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Speaker 1: dominating it, I mean, I mean it's we are the customers.
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Speaker 1: For God's sakes, we should haven't shot it at least
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Speaker 1: having a share of the market, if not owning the market.
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Speaker 1: One of the reasons that Asians have done such a
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Speaker 1: great job up until now is that they have a
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Speaker 1: great network to source the product from the factory, particularly
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Speaker 1: the synthetic product, all the way through the upward distribution change.
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Speaker 1: So let me talk about some of the structural issues.
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Speaker 1: The imports come from places like China, India, and South Korea.
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Speaker 1: They again, these are long time relationships where they get
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Speaker 1: preferred pricing bulk orders at low per unit costs, enabling
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Speaker 1: competitive pricing and high profit margins. I'm gonna get to highrofit.
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Speaker 1: I'm gonna get to the profit margins in a minute,
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Speaker 1: and make sure you sit down when I tell you
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Speaker 1: what the profit margins are. Leveraging their low cost base
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Speaker 1: from direct imports, they can offer competitive prices while maintaining
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Speaker 1: good profit margins. Stocking a wide range of products in
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Speaker 1: various price points caters to different customer budgets, from affordable
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Speaker 1: synthetic hair to premium human hair extensions. High turnover frequent
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Speaker 1: demand for hair products combined with a high customer base,
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Speaker 1: and sure is steady cash flow and high turnover rates.
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Speaker 1: Turnover rates meaning that the that the inventory keeps turning
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Speaker 1: over quickly, right, they don't have to hold it for long.
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Speaker 1: It comes in, It doesn't shit on the shelf for long.
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Speaker 1: It's come in. They buy it and they don't need
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Speaker 1: lines of credit and bank loans all that stuff because
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Speaker 1: it turns over. It moves really quickly. Large stores or
12:21
Speaker 1: chain chains benefit also from economies of scale, reducing the
12:25
Speaker 1: costs even further. And again I'm gonna get to that
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Speaker 1: in just a second family run businesses. Many of these
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Speaker 1: stores are family operated, reducing labor costs even more than
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Speaker 1: not paying their family members for some of the labor.
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Speaker 1: I'm not gonna deal with the labor law issues there,
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Speaker 1: but you know, folks work their stuff out the way
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Speaker 1: they work it out. They tend to have built, you know,
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Speaker 1: build strong relationships in the community. That's really smart. Now
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Speaker 1: let's talk about the profit margins. Gross margins hair weaves
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Speaker 1: and extensions. These products often have gross margins ranging from
12:59
Speaker 1: So we get this out. Keep in mind the grocery
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Speaker 1: stores have a margin profit margin of three to you know,
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Speaker 1: three to four five percent on average or some of
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Speaker 1: the stuff on their on their shelves grocery stores. Okay,
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Speaker 1: so hold on. The profit margins range from fifty to
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Speaker 1: one hundred percent or more. For instance, a human hair
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Speaker 1: weave that costs fifty dollars wholesale might sell for one
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Speaker 1: hundred fifty dollars synthetic hair. Generally these have lower margins
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Speaker 1: than human hair, but they can still offer forty to
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Speaker 1: seventy percent gross profit margins. Then they have other products
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Speaker 1: that they, you know, sell ancillary to the hair weaves
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Speaker 1: in these stores. That includes combes brushes, styling tools, which
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Speaker 1: can of margins between forty and sixty percent. Now let's
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Speaker 1: get into the actual revenues again. There are thousands of
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Speaker 1: these stores across the country. As you're listening to this podcast,
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Speaker 1: you might draw I buy some of these stores. You're like,
14:02
Speaker 1: oh there, right there, right, don't go in chastising to
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Speaker 1: people about their business model. You could have done it,
14:08
Speaker 1: and you still could do it. Just you know, salute them,
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Speaker 1: God bless them, and don't go and asking them all
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Speaker 1: the details about their business. They're not going to tell you.
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Speaker 1: And they ever you know, they're they're not give you
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Speaker 1: their special sauce. But I'm going to give it to
14:21
Speaker 1: you so that you can compete on a fair basis. Right,
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Speaker 1: maybe even partner with them even better. I love joint ventures.
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Speaker 1: I'll get to that in a minute. Revenue small stores
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Speaker 1: annual revenue can range between one hundred thousand to five
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Speaker 1: hundred thousand dollars. This is a small store one store,
14:41
Speaker 1: medium to large stores. These stores can generate between five
14:44
Speaker 1: hundred thousand over one million dollars in annual revenue. Did
14:48
Speaker 1: you hear me per store. I've already told you. The
14:52
Speaker 1: turnover rate of the inventory is expeditious, is quick, quick, quick,
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Speaker 1: so they don't even have to hold inventories for long
14:59
Speaker 1: periods of time. Chains and franchises. Large chains or franchise
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Speaker 1: stores can be can see revenues in the millions. Net
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Speaker 1: profit net profit margin typically ranges between ten to twenty
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Speaker 1: percent after accounting for all expenses rents, utilities, payroll, employees, inventory, marketing,
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Speaker 1: et cetera. For a store with say five hundred thousand
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Speaker 1: dollars in annual revenue, a net profit margin of say
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Speaker 1: fifteen percent, would result in about seventy five thousand dollars
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Speaker 1: in profit. And if you wanted to have one hundred
15:38
Speaker 1: and fifty thousand dollars annual net profit for your family
15:42
Speaker 1: in this example, you'd have to have two of those
15:46
Speaker 1: small to medium size stores. Here's some of the cost structures.
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Speaker 1: And I'm gonna get into some different business models between
15:53
Speaker 1: small stores, medium sized stores, and large stories. And I'm
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Speaker 1: gonna get into some other fun facts about this business.
16:02
Speaker 1: Fixed costs rent can vary significantly buy location, but it
16:07
Speaker 1: typically ranges between a thousand and five thousand dollars per
16:11
Speaker 1: month for you know, a retail storefront. You see them
16:14
Speaker 1: in the strip centers, the corner malls. Sometimes even what's
16:18
Speaker 1: going on with commercial real estate. You can get very
16:20
Speaker 1: good deals in even prominent shopping centers these days, right,
16:27
Speaker 1: so shop around. No pun intended utilities generally between two
16:31
Speaker 1: hundred and five hundred dollars per month. I hope you're
16:33
Speaker 1: taking notes on everything I'm saying, and pick up my book,
16:35
Speaker 1: Financial Literacy for All, which is now a national bestseller
16:39
Speaker 1: in economics and business finance, number one for the last
16:42
Speaker 1: three and a half months on Amazon. You can also
16:45
Speaker 1: find it in black bookstores. You can find it at Walmart,
16:48
Speaker 1: Barnes and Nobles, etc. It's number one. They had to
16:52
Speaker 1: reprint it already, and I thank my publisher and all
16:55
Speaker 1: those who sought it, supported the book when it came out,
16:57
Speaker 1: and all of you who've now giving it almost five
17:01
Speaker 1: star reviews online. Get the book, underline it and began
17:05
Speaker 1: to put notes like this as a fold in to
17:10
Speaker 1: what becomes a business manual for your life. You know,
17:14
Speaker 1: how are you going to build wealth? Is you make
17:16
Speaker 1: money during the day, you build wealth in your sleep.
17:19
Speaker 1: Maybe you're making money by having a job. You're nine
17:22
Speaker 1: to five, Maybe financis you're five to nine. Maybe this
17:24
Speaker 1: is your five to nine hustle. Maybe this is your
17:27
Speaker 1: dream to build generational wealth and have some fun at
17:30
Speaker 1: the same time. Because maybe you're a lady listening to
17:32
Speaker 1: this and you love hair. Maybe you're a guide listening
17:34
Speaker 1: to this and you love the science of hair. Are
17:37
Speaker 1: you you know or or you love the hair business.
17:40
Speaker 1: My brother Lands Triggs, my brother and friend Lands Triggs.
17:42
Speaker 1: Not my brother brother, but my brother brother, who runs
17:47
Speaker 1: the program division at Operation Hope. He was in the
17:50
Speaker 1: haircare business. That's where I met him actually years ago,
17:54
Speaker 1: when he and I both danced on Soul Train in
17:58
Speaker 1: American Bandsage. Yes, I dam on Soul Train and American
18:01
Speaker 1: Bandstand me and or Lance and I did that, which
18:04
Speaker 1: is where I needed the brooch on my scarf and
18:08
Speaker 1: my big leather jacket and my little hair extension, my hair,
18:14
Speaker 1: my hair situation for my my shag. You know that's
18:17
Speaker 1: back in the day. Yeah, you can go and try
18:19
Speaker 1: and find the episodes if you like. Good luck. I'm
18:23
Speaker 1: not going to help you. But so, the haircut business
18:25
Speaker 1: is a big is a big business, and I'm breaking
18:29
Speaker 1: it down to small bite size consumable business plan for you.
18:35
Speaker 1: So rant between one thousand and five thousand dollars per
18:37
Speaker 1: month on average, General utilities about two hundred to five
18:41
Speaker 1: hundred dollars per month. Insurance and licenses can range between
18:44
Speaker 1: five hundred to two thousand dollars annually. Okay, you are
18:49
Speaker 1: to check on any licenses that you might need, and insurance.
18:52
Speaker 1: You definitely want to have insurance you would have a
18:53
Speaker 1: business like this or any business. Variable costs. Inventory. The
18:57
Speaker 1: largest variable costs, comprising fifty percent of the revenue, is
19:02
Speaker 1: the you know, the inventory itself, which is both the
19:06
Speaker 1: synthetic and the real hair. Labor employees can variable. For
19:11
Speaker 1: a small store, labor costs might range you, you know,
19:13
Speaker 1: two thousand dollars to maximum of about ten thousand dollars
19:17
Speaker 1: per month, depending on the number of employees and local
19:20
Speaker 1: wage rates. Marketing costs, you know, that'll range from a
19:24
Speaker 1: few hundred dollars to several thousand dollars depending on how
19:27
Speaker 1: you do it. But social media. You do a lot
19:28
Speaker 1: of your marketing through social media and through community, your clubs,
19:32
Speaker 1: you know, organizations you're part of, et cetera, et cetera,
19:36
Speaker 1: et cetera. I will get to that before we finish
19:38
Speaker 1: on how you can possibly dominate this industry. Examples for
19:44
Speaker 1: financials for a small store. This is a medium small store, Okay,
19:49
Speaker 1: about three hundred thousand dollars in revenue. Again, I hope
19:51
Speaker 1: you guys are writing this down. You can always go
19:53
Speaker 1: back and take some notes, you know, and write it
19:55
Speaker 1: down later. Costs of good solds COEGS, COG, cost of
20:00
Speaker 1: good sold on a three hundred thousand dollars store. What
20:03
Speaker 1: did I tell you? It's a fifty percent profit margin? Okay?
20:06
Speaker 1: So the cost of goo good sold is going to
20:08
Speaker 1: be about one hundred and fifty thousand dollars in this example. Okay,
20:12
Speaker 1: gross profit? What's that going to be? About one hundred
20:14
Speaker 1: and fifty thousand dollars fifty percent operating expenses a total
20:19
Speaker 1: of about one hundred and five thousand dollars in this example.
20:22
Speaker 1: Let me break this down. Rent thirty six thousand dollars
20:26
Speaker 1: in this example, Utilities three thousand dollars in this example,
20:30
Speaker 1: Labor forty eight thousand dollars in this example, marketing five
20:36
Speaker 1: thousand dollars in this example, miscellaneous insurance licenses, et cetera
20:41
Speaker 1: thirteen thousand dollars in this example. And so in this
20:47
Speaker 1: particular example, you're going to make a profit, a net
20:49
Speaker 1: profit of forty five thousand dollars. You see how that worked.
20:53
Speaker 1: So you had your cost of good sold, which is
20:56
Speaker 1: the product itself, right, that's half of your revenue. So
21:00
Speaker 1: now you get one hundred and fifty thousand dollars left.
21:02
Speaker 1: And of that you have operating expenses of about one
21:04
Speaker 1: hundred and five thousand dollars in this example, and so
21:06
Speaker 1: you have a net profit of about forty five thousand dollars.
21:09
Speaker 1: And this is not a very efficient business model. This
21:11
Speaker 1: is one of the least efficient. It's a small, single
21:15
Speaker 1: soul standing store they call it. But it's still not bad.
21:19
Speaker 1: That's still even paying really the highest you know, in
21:23
Speaker 1: each segment. You're still making you know, forty five thousand
21:26
Speaker 1: dollars a year, call it fifty thousand dollars a year
21:29
Speaker 1: before taxes. And you should have a reasonable tax ride
21:32
Speaker 1: Austin if you're running a business like this. And so
21:35
Speaker 1: if you want to make you know, two hundred and
21:38
Speaker 1: fifty thousand dollars a year with this model, you need
21:39
Speaker 1: five stores and you want to have it in your
21:42
Speaker 1: local areas. You can drive around and visit them all.
21:45
Speaker 1: Scalability and growth. Successful stores can expand by opening additional
21:50
Speaker 1: locations or franchising. Of course, online sales. I'm a big
21:55
Speaker 1: booster for that. You should go to our one million
21:57
Speaker 1: Black Business one MBB platform, our partnership with shopify and
22:03
Speaker 1: open an e commerce business. As an example, it's a
22:06
Speaker 1: low cost way you want to have rent and all
22:08
Speaker 1: that stuff in the traditional model I talked about. So
22:11
Speaker 1: your profit margin should go up one mbb one million
22:15
Speaker 1: Black Business Initiative Again. I'll come back to that in
22:19
Speaker 1: more detail before we finish. Product diversification is introducing new
22:23
Speaker 1: product lines, exclusive brands, our customized services can enhance customer loyalty,
22:29
Speaker 1: increase your sales. This is a really profitable business models
22:36
Speaker 1: that we are not taking advantage of. And I'm not
22:41
Speaker 1: gonna say people are taking advantage of us. I think
22:43
Speaker 1: that people are just targeting a great customer base that
22:46
Speaker 1: has one point five, give or take trillion dollars an
22:52
Speaker 1: annual consumer spending. And we over index on beauty and health.
23:11
Speaker 1: So we already talked about the biggest the biggest cities.
23:13
Speaker 1: Now let's talk about real hair versus synthetic. Now. I
23:17
Speaker 1: don't know anything about the science of this, lady, so
23:20
Speaker 1: don't get down on me. I'm talking about just the economics. Right,
23:25
Speaker 1: you don't know what you're talking about. I only like
23:28
Speaker 1: it human hair, Okay, cool. I have no opinion here
23:33
Speaker 1: other than I want you to own what you own.
23:37
Speaker 1: If you can parse that message, maybe I shouldn't have
23:41
Speaker 1: done this episode. I could have found an easier topic,
23:44
Speaker 1: less culturally sensitive. Of course I'm gonna do it. Synthetic
23:49
Speaker 1: hair affordability. Synthetic hair is generally more affordable than real hair,
23:53
Speaker 1: making it accessible to a wider range of customers. This
23:56
Speaker 1: affordability contributes to its popularity amongst individuals who are cost effective,
24:04
Speaker 1: are cost sensitive, and they're looking for, you know, a
24:08
Speaker 1: cheaper option. Now you'll find a lot of these stories. Now,
24:11
Speaker 1: these stores are everywhere you find black people. Black people
24:14
Speaker 1: are the number one. If I didn't mention it, we
24:15
Speaker 1: are the number one customer for hair weave, for the
24:18
Speaker 1: hairwaf sector of hair weave extensions wigs in the country.
24:21
Speaker 1: Isn't that crazy? Number one? Uh? Number one customer uh.
24:25
Speaker 1: And we don't own it. And a lot of these
24:28
Speaker 1: stores you're gonna find in five hundred, six hundred credit
24:31
Speaker 1: score neighborhoods. And it doesn't mean they're targeting you because
24:34
Speaker 1: you know of your of your credit score. I'm just
24:37
Speaker 1: saying that for some reason, they there's a super concentration,
24:41
Speaker 1: probably just because there's a super concentration of African Americans
24:43
Speaker 1: in these neighborhoods. There's a there's a super concentration of
24:46
Speaker 1: these stores. There are some stores that I think are predatory.
24:50
Speaker 1: Check cashiers paid some of some check cashers, payday loan lenders,
24:53
Speaker 1: rental own stores, title lenders, liquor stores. I do believe
24:57
Speaker 1: a praying on certain neighborhoods and communities. I don't think
25:01
Speaker 1: that hair web store is a predatory. I think they're
25:03
Speaker 1: targeting it very smartly. So the synthetic is just less expensive.
25:09
Speaker 1: Synthetic hair comes in a wide variety of colors, styles,
25:12
Speaker 1: and textures, allowing for more versatility and styling. It also
25:15
Speaker 1: is more readily available than real hair. Uh low maintenance.
25:20
Speaker 1: Synthetic hair requires less maintenance than real hair and retains
25:23
Speaker 1: its style better in various weather conditions. Again, ladies, don't
25:27
Speaker 1: start arguing with me on this or guys right, I'm
25:31
Speaker 1: just telling you. You know, from a marketing perspective and
25:34
Speaker 1: a buying perspective, you know, if you want lower cost
25:38
Speaker 1: product that you know is more flexible quotation marks, and
25:44
Speaker 1: you do synthetic that more people buy, and it's cheaper
25:49
Speaker 1: real hair, you know, natural it has more of a
25:52
Speaker 1: natural appearance. Real human hair is often prefer preferred for
25:55
Speaker 1: its natural look and it's feel. It can be styled, colored,
25:59
Speaker 1: and treated just like a regular natural hair, making it
26:02
Speaker 1: a popular choice for those seeking a more authentic appearance. Translation,
26:05
Speaker 1: those who got some money are not so price sensitive
26:08
Speaker 1: and want to have a more authentic look will spend
26:13
Speaker 1: more money for natural hair. Real hair extensions tend to
26:16
Speaker 1: last longer than synthetic ones, especially with proper care. This
26:20
Speaker 1: durability appeal to customers looking for a longer term investment
26:23
Speaker 1: seat investment. Real hair can be heat styled and permed,
26:29
Speaker 1: offering more styling options compared to synthetic hair, which can
26:33
Speaker 1: be limited in terms of heat tolerance. Profitability. My favorite topic,
26:39
Speaker 1: higher markups for synthetic hair. Despite the lower price points,
26:44
Speaker 1: synthetic hair can be sold at a higher or high markup.
26:47
Speaker 1: Retailers benefit from high volume sales and relatively low hosts
26:51
Speaker 1: sale costs. So there you are right there like that,
26:53
Speaker 1: you can just stop right now at minute of twenty eight.
26:57
Speaker 1: If you want to know why this business has taken
26:59
Speaker 1: off off, You've got the synthetic hair, which is high turnover.
27:03
Speaker 1: It comes in and sits on the shelf very short
27:04
Speaker 1: pair of time and it is gone. It's low costs
27:08
Speaker 1: you can mark it up to bijeebers and back and
27:10
Speaker 1: sell it pretty quickly. It's pretty dependable as a sales product.
27:14
Speaker 1: And then you have repeat purchasers who because you have
27:16
Speaker 1: dedicated this sort of dedicated customer base. Real hair is
27:20
Speaker 1: a higher price point, it's soda, a significantly higher price
27:24
Speaker 1: point than synthetic hair, resulting in higher revenue per unit sold. Okay,
27:29
Speaker 1: so quality over quantity and of course benefits from also
27:34
Speaker 1: this loyal customer base who says I want only to
27:37
Speaker 1: get human hair. There is a noticable shift in demand
27:42
Speaker 1: and customer demand towards real hair due to the natural
27:44
Speaker 1: appearance and durability. However, synthetic hair remains popular. It's affordability
27:50
Speaker 1: and variety, so it's never the there's a flight to quality,
27:53
Speaker 1: so to speak. Right when investment community starts having trouble
27:56
Speaker 1: on stocks and bonds, all the flicky stocks go away.
28:00
Speaker 1: People and companies tend to investors tend to go to
28:02
Speaker 1: do a flight to quality, to go to to the
28:04
Speaker 1: standard bearers, the most dependable companies and invest there. And
28:10
Speaker 1: so there is a shift by some consumers to higher
28:14
Speaker 1: quality or natural hair. But this low cost option is
28:19
Speaker 1: not in my opinion going to ever go away because
28:22
Speaker 1: it's lower cost period. And there's also advances and technology
28:27
Speaker 1: has led to the production of higher quality synthetic hair
28:30
Speaker 1: that more closely mimics the look and feel of real
28:33
Speaker 1: hair of real hair. Do you know this is going
28:35
Speaker 1: to be just for black folks? A ten billion dollar industry?
28:41
Speaker 1: I mean, this is crazy now. Sourcing is one of
28:44
Speaker 1: the reasons why our Asians brothers and sisters have been
28:47
Speaker 1: able to control this market, and they've been sourcing it
28:52
Speaker 1: primarily from traditional Asia like China. You can just say
28:58
Speaker 1: China basically and stop there. But I want you to
29:01
Speaker 1: think now about India in Brazil, Okay, expand your mind.
29:09
Speaker 1: You've got temple hair donations in India. India is one
29:12
Speaker 1: of the largest exporters of human hair. This is natural
29:16
Speaker 1: hair primarily sourced from temple donations. Devotees of Hindu temples,
29:20
Speaker 1: especially in South India, donate their hair as an offering.
29:23
Speaker 1: This hair often referred to as as Remi hair. I
29:27
Speaker 1: hope I'm saying that right. Remi here remy hair or
29:31
Speaker 1: eat and why it is highly valued because the cuticles
29:37
Speaker 1: are aligned, making easier to manage and style. After collecting
29:42
Speaker 1: the hair is process cleaned and sort it before being
29:45
Speaker 1: exported in Glad is clean. Indian hair is popular for
29:48
Speaker 1: its texture and quality, and it is used extensively in
29:52
Speaker 1: the global hair extension market. Now, Brazil. Do you know
29:58
Speaker 1: that one of the large its populations of Africans outside
30:02
Speaker 1: of Africa is Brazil. Slaves stopped there or they were
30:10
Speaker 1: laid let off there, and it unfortunately became a huge
30:15
Speaker 1: slave trading place all the Caribbean islands, by the way,
30:19
Speaker 1: but Brazil in particular, so there is a there's a
30:23
Speaker 1: real exotic sort of blend of hair in Brazil. Brazilian
30:27
Speaker 1: hair is also highly sought after for its texture durability.
30:29
Speaker 1: It is known for its thickness and ability to blend
30:33
Speaker 1: well with various hair types. I was just talking about
30:36
Speaker 1: the diversity that sort of emerged in Brazil because of
30:40
Speaker 1: all the mixing of of of the racist with with Africans. Uh,
30:47
Speaker 1: get this one. Russia and Eastern Europe. Hair from Russia
30:50
Speaker 1: and Eastern Europe is often considered premium due to its
30:53
Speaker 1: fine texture and natural light color, which are in high
30:56
Speaker 1: demand in certain markets. China. We know that story, Indonesia
31:03
Speaker 1: and the Philippines, and there are other places that are emerging.
31:07
Speaker 1: But I want you to think about if you think
31:08
Speaker 1: about going into this business, I want you to think
31:11
Speaker 1: about going into markets and building relationships with manufacturers and
31:18
Speaker 1: manufacturing sources that are not controlled by those who already
31:22
Speaker 1: control the market. So what I'm saying is going outside
31:25
Speaker 1: of China and maybe Brazil is an option, maybe India
31:31
Speaker 1: is an option for you. And the business is extraordinarily lucrative,
31:39
Speaker 1: and we don't own it because we don't have the
31:44
Speaker 1: historical context and market entrenchment. Because I mentioned that our
31:51
Speaker 1: Asian brothers and sisters started this business in the nineteen
31:55
Speaker 1: sixties and nineteen seventies, they're able to build very strong
31:59
Speaker 1: supply chain change create, meaning that from the manufacturer all
32:04
Speaker 1: the way through through shipping to in this case the US,
32:09
Speaker 1: they created an intense can create loyal community, can networks
32:14
Speaker 1: established these distribution channels that have remained robust over decades.
32:19
Speaker 1: And I'm going to give you a suggestion of how
32:23
Speaker 1: you can work with them in a moment to supply
32:25
Speaker 1: chain control. Just sort of touched on that. Already capital
32:29
Speaker 1: and financing barriers, you know, starting a business can be
32:32
Speaker 1: capital intensive, and African Americans have been discriminated against in
32:35
Speaker 1: lending practices. We all know that, so we've not really
32:38
Speaker 1: had access to capital. The Freeman's Bank, as you've heard
32:41
Speaker 1: me talk about extensively, Abraham loin Get created after the
32:46
Speaker 1: Civil War to teach free slaves about money, and the
32:48
Speaker 1: Freeman's Bank was upended. We never were taught financial literacy,
32:51
Speaker 1: never given the memo and how money, capitalism and free
32:53
Speaker 1: enterprise works. That was my fourth book, the memo, uh
32:57
Speaker 1: number Love Leadership and Banking on Future of my book
33:00
Speaker 1: of Leadership, How the Poor Can Save Capitalism, the Memo
33:03
Speaker 1: yet number four up from nothing, number five, and now
33:06
Speaker 1: this book Financial Literacy for All. Go and read all
33:08
Speaker 1: of them. But in this example, I talk about the
33:11
Speaker 1: memo and how we never got the memo. We're not
33:13
Speaker 1: done and we're not stupid. It's what we don't know
33:15
Speaker 1: that we don't know this killing is but we think
33:16
Speaker 1: we know, and no one ever taught us about free
33:18
Speaker 1: enterprise and capitalism and how it works. Which is why
33:21
Speaker 1: this podcast is so important. It's not for just black people,
33:24
Speaker 1: it's for everybody. But I super index, I over index,
33:27
Speaker 1: I overemphasize how African Americans need to come up and
33:30
Speaker 1: gain our rifle position on the economic stage because we
33:34
Speaker 1: are breed and wherever the rules of published and the
33:36
Speaker 1: playing fielders level, we absolutely kill it. What did we
33:40
Speaker 1: do recently to break the mode of a misperception because
33:45
Speaker 1: we were the rules of published and the playing fielders level, Arts,
33:49
Speaker 1: professional sports, government service, faith community, we absolutely dominate. And
33:56
Speaker 1: even in sports, we've got professional tennis and f one
33:59
Speaker 1: race singing all this stuff. Now we've just won a leg,
34:02
Speaker 1: our first leg in the Twitter France cycling brother just
34:06
Speaker 1: one first time ever Afghan person of African descent and
34:10
Speaker 1: one won his won a leg of the race they
34:12
Speaker 1: call it well in the Twitter France overall race. He
34:18
Speaker 1: just won what's called a stage. So this is a
34:21
Speaker 1: new stage that we can perform on. It's the stage
34:25
Speaker 1: of business and capitalism and free enterprise, and we can
34:33
Speaker 1: find ways Operation Hope can help you. We've directed four
34:36
Speaker 1: point seven four point five billion dollars in capital to
34:40
Speaker 1: people to start businesses and own and build wealthy home
34:43
Speaker 1: ownership and other mechanisms. So go to one MBB one
34:46
Speaker 1: million Black business get your in kind grant that's worth
34:50
Speaker 1: up to twenty five thousand dollars, which includes a shopify
34:52
Speaker 1: e commerce account for free, a website, a domain name,
34:56
Speaker 1: a business plan, all this stuff to help you start
34:59
Speaker 1: your business. You can start this business as an example
35:02
Speaker 1: of you like or a range of others that I
35:04
Speaker 1: will unpack on this podcast. Network or you can do.
35:07
Speaker 1: You can research on your own. So number four for
35:11
Speaker 1: the barriers and why we haven't done this community and
35:14
Speaker 1: network support. We we you know Asian entrepreneurs have benefit
35:18
Speaker 1: from a strong community and network amongst their own for
35:21
Speaker 1: business advice and financial backing and logistical support. And we
35:26
Speaker 1: can do the same thing again. I'll get to that
35:27
Speaker 1: in a minute. Business practices, UH and relationships. Over the years,
35:31
Speaker 1: Asian business owners have developed strong relationships with manufacturers and wholesalers,
35:36
Speaker 1: securing better pricing and exclusive deals. These long term business
35:41
Speaker 1: relationships create a competitive edge it's difficult for new entrants
35:46
Speaker 1: to overcome. Now, don't be mad at them for one
35:49
Speaker 1: to keep you out. I'm going to suggest to you
35:51
Speaker 1: a way to get you in, But don't be mad
35:53
Speaker 1: at them for trying to keep you out. Business is
35:55
Speaker 1: a is a gladiator. Capitalism is a gladiator sport. They're
35:58
Speaker 1: not not trying to be your best friend, are trying
36:01
Speaker 1: to sell your product and take home a profit. They
36:04
Speaker 1: don't want you to be a salesperson competing with them,
36:08
Speaker 1: but that doesn't mean you shouldn't do it. You know,
36:11
Speaker 1: market perceptions and consumer behavior. Consumers often associate certain stores
36:16
Speaker 1: with quality and reliability based on their long standing presence
36:19
Speaker 1: in the community. As owned business, beauty supply stores have
36:23
Speaker 1: built reputations over time, which can influence consumer behavior and loyalty.
36:28
Speaker 1: So some people look at that come into a store
36:31
Speaker 1: or a beauty supply store or a hairwave specific store,
36:35
Speaker 1: and if it's Asian owned, oddly enough, we trust it more.
36:38
Speaker 1: I think that we need to reimagine that and think that, well, clearly,
36:43
Speaker 1: if somebody, if if there's a black owned business serving
36:46
Speaker 1: a market that is dominated by black people and we're
36:49
Speaker 1: running it with excellence, which I'm convinced we can and
36:51
Speaker 1: we will, that that should now become a new standard.
36:57
Speaker 1: There are ongoing efforts to increase American ownership in the
37:00
Speaker 1: beauty supply chain, which I'm going to end the podcast with,
37:06
Speaker 1: But I really want you to sort of focus on
37:08
Speaker 1: the fact that you drive by these stores all the
37:12
Speaker 1: time and you don't notice that they're not owned by you,
37:21
Speaker 1: and you're the customer and the industry's bulletproof. I mean,
37:29
Speaker 1: we're going to always want to look good as we should, right,
37:34
Speaker 1: So then why wouldn't we partake in this business as
37:39
Speaker 1: an owner? So what if I said to you that
37:42
Speaker 1: African American Americans could dominate the hairwave market in ten years?
37:49
Speaker 1: What have I said that to you? Right? So, here's
37:51
Speaker 1: some things that we would need to do. We need
37:54
Speaker 1: to have a multifaceted strategy, not emotions, not anger, not protesting,
38:00
Speaker 1: not drama. Don't go protesting the Asian businesses because they
38:04
Speaker 1: were smart enough to buy in your neighborhood. You know,
38:08
Speaker 1: if you see some if you see some white folks
38:12
Speaker 1: peddling through your neighborhood with T shirts and short pants
38:17
Speaker 1: and flip flops on, that's not a tourist. That's an owner.
38:21
Speaker 1: And don't be mad at them. Because they were smart
38:23
Speaker 1: enough to buy a house in the hood, which is
38:28
Speaker 1: typically near transportation, near places of work, near economic activity,
38:37
Speaker 1: and low costs. And they like a shoot. I love
38:41
Speaker 1: hanging around, good food and good people. So they bought
38:43
Speaker 1: it at low costs, much lower than they could have
38:45
Speaker 1: bought in their own neighborhood, which they would have to
38:48
Speaker 1: drive an hour in the suburbs to get to They
38:51
Speaker 1: bought it, rehabbed it, and lived in it. And we,
38:54
Speaker 1: you know, we call that gentrification, but in reality, all
38:59
Speaker 1: gentrification really means is a movement to middle class values.
39:02
Speaker 1: That is the Dictionary definition of it. So we could
39:04
Speaker 1: do that same thing. We could own our own homes,
39:07
Speaker 1: and we could own our own businesses. So don't hate
39:10
Speaker 1: on somebody who was smart enough to see your our
39:13
Speaker 1: community as valuable and we didn't. Hello, I mean the
39:18
Speaker 1: clues of clans not running through the neighborhood with torches
39:21
Speaker 1: and saying good all the neighborhoods. You know, we're voluntarily
39:25
Speaker 1: moving out, are letting grandma's house fall into disrepair. I'm
39:30
Speaker 1: going to do a whole podcast on tax uh defaults
39:34
Speaker 1: and how that's both a major problem and a major opportunity.
39:38
Speaker 1: Tax defaults, property tax defaults on real estate, and what
39:43
Speaker 1: it is and how to do it. It's a business,
39:45
Speaker 1: but in this particular example, I don't want you negatively
39:50
Speaker 1: approaching Asian owned businesses who've been smart enough to come
39:54
Speaker 1: in our neighborhoods. And it's not just business, just this business,
39:57
Speaker 1: you know, it's nail salons, it's let me think about it,
40:00
Speaker 1: it's quite fascinating, and they've done a really good job
40:03
Speaker 1: and they provide great value, and you know they should
40:08
Speaker 1: be supported. Now you can compete with them and create
40:11
Speaker 1: your own strategy, but it has to be non emotional
40:13
Speaker 1: and it has to be serious business. A multifaceted strategy
40:17
Speaker 1: focuses on ownership, community support, education, and innovation. And here
40:23
Speaker 1: are some pieces. Write this down number one. So if
40:27
Speaker 1: somebody's listening to this podcast, they only want to know
40:30
Speaker 1: the business approach of how African Americans can approach this,
40:34
Speaker 1: this multi billion dollar soon ten billion dollar industry where
40:38
Speaker 1: the number one customer is and are black folks is
40:44
Speaker 1: or depending on how we're talking about the singular person
40:48
Speaker 1: as a customer type or the group the community that
40:51
Speaker 1: the customers that are being targeted or black folks. Why
40:56
Speaker 1: would we not want to see this as a major opportunity.
41:00
Speaker 1: They have a strategy whatever you make it. Whenever you
41:02
Speaker 1: make a decision emotionally, it's a bad decision. So make
41:04
Speaker 1: this intelligently from the neck up, knock the shoulders down.
41:08
Speaker 1: I mean, don't fight, don't get angry, get smart and
41:11
Speaker 1: create a business plan. One increase ownership and control over
41:15
Speaker 1: the supply chain. Invest in manufacturing and distribution, established manufacturing facilities.
41:21
Speaker 1: By investing in or establishing hair manufacturing facilities, African Americans
41:26
Speaker 1: can control the quality and pricing of products that can
41:29
Speaker 1: reduce reliance on Asian suppliers and create jobs within the community.
41:34
Speaker 1: Building robust distribution channels will ensure products are widely available
41:38
Speaker 1: in competitively priced Now you can think about doing synthetic
41:42
Speaker 1: hair right here in the US, or in Africa or
41:46
Speaker 1: in Brazil. Be creative. You can also go and go
41:51
Speaker 1: to India and cut deals with your Indian brothers and sisters,
41:55
Speaker 1: or go to Brazil and cut deals with your Brazilian
41:57
Speaker 1: brothers and sisters around their menu manufacturing to either do
42:01
Speaker 1: a preferred deal with them based on volume and consistency,
42:06
Speaker 1: or have them co to partner with you joint venture
42:09
Speaker 1: to manufacture with you. You provide the customers and they
42:13
Speaker 1: provide the capital to start manufacturing, and maybe you have
42:16
Speaker 1: an earn out over time when you buy them out
42:19
Speaker 1: of the manufacturing over time. There are a number of
42:21
Speaker 1: ways for you to go about this, but in all
42:23
Speaker 1: these examples, you want to go to Operation Hope are
42:25
Speaker 1: the Urban League or whoever has a training program or
42:28
Speaker 1: one million Black Business program at Operation Hope, it will
42:30
Speaker 1: help get you trained up to do this business plan
42:34
Speaker 1: if you're interested so investing manufacturing and support black owned businesses.
42:40
Speaker 1: I've already said that this does not mean. I don't
42:43
Speaker 1: mean put a black owned business sign in your window.
42:46
Speaker 1: I mean because that may turn customers away, who may
42:52
Speaker 1: feel that you don't want a black customer. You want everybody.
42:55
Speaker 1: The color of currency is green. You want everybody to
42:57
Speaker 1: come in your business, but you might if you want
43:00
Speaker 1: to support black hairweave and beauty supply stores. Look at
43:05
Speaker 1: your business chambers. The Black Business Chamber here in Atlanta
43:10
Speaker 1: is a great example. They do a great job. And
43:12
Speaker 1: there are other organizations and the Russell Center here, and
43:17
Speaker 1: there's all these organizations around the country, but most cities
43:20
Speaker 1: have a Black chamber. See who's a member. If there's
43:23
Speaker 1: any black owned haircare businesses that are members of the chamber,
43:29
Speaker 1: If there's a black beauty salon or a barbershop, start
43:34
Speaker 1: there and ask them if they know anybody who's black owned,
43:36
Speaker 1: and support those businesses or their dollars. Recycle number two.
43:41
Speaker 1: Access to capital and financial resources, leverage community banks and
43:45
Speaker 1: credit unions. If you're a member of a credit union,
43:47
Speaker 1: then you have a preferred access to the capital of
43:50
Speaker 1: that credit union. Did you know that you actually own
43:52
Speaker 1: part of the credit union. If you're a member of
43:54
Speaker 1: a credit union, Community banks also reinvest in their local community.
43:58
Speaker 1: Operation Hope can help you find the bank that will
44:02
Speaker 1: most likely get you access to capital and will help
44:04
Speaker 1: you get bank qualified. Most of these loans are going
44:07
Speaker 1: to be tied to your personal credit profile because most
44:09
Speaker 1: black businesses are sole proprietorships, and when you get started,
44:12
Speaker 1: the business does not have a credit profile. You have
44:14
Speaker 1: a credit profile, it is probably your credit score, so
44:16
Speaker 1: I want you to get your credit score up. You
44:20
Speaker 1: can also do crowd funding and try to get grants,
44:25
Speaker 1: try to get an SBA guarantee. Look for SBA eight
44:30
Speaker 1: a business Development Program offices, and there's a whole range
44:34
Speaker 1: of options, options and opportunities to try to raise capital.
44:38
Speaker 1: I raised capital with my credit cards. I put my
44:40
Speaker 1: I started my first businesses on credit cards when I
44:42
Speaker 1: first started. So it's everything from the unsophisticated to the sophisticated,
44:46
Speaker 1: and my team at Operation Hope can help you do
44:48
Speaker 1: that financial education. As you know, I'm big on that
44:51
Speaker 1: financial literacy is what we do at Operation Hope, the
44:53
Speaker 1: one MBB program once again, innovation and product development. This
44:57
Speaker 1: is someplace where African Americans can absolutely lutely i'd you know,
45:02
Speaker 1: like be stars because we're we're the most creative people
45:07
Speaker 1: on the planet. Uh So innovate new products that cater
45:10
Speaker 1: specifically to the needs and preferences of African American consumers. Underscore, underscore, underline, underline.
45:17
Speaker 1: Maybe our Asian brothers and sisters can outdo you on
45:20
Speaker 1: you know, uh, manufacturing in China and the prices for
45:23
Speaker 1: this and all that, and yes, you can't compete with
45:26
Speaker 1: that very easily. But but if you come up with
45:28
Speaker 1: a different style or a different approach or a different
45:31
Speaker 1: way or different you know, manufacturing style for synthetic hair
45:34
Speaker 1: or or making synthetic here look like more human hair,
45:37
Speaker 1: or or different kind of human here. I mean again,
45:40
Speaker 1: maybe you specialize in brazil fashions or Brazil Brazilian here,
45:44
Speaker 1: maybe it's Brazilian in India. I'm just riffing here. I'm
45:47
Speaker 1: just saying, come up with your niche and and then
45:51
Speaker 1: just innovate around it and then tied into e commerce
45:56
Speaker 1: that's selling online digital whatever business you have, you should
46:01
Speaker 1: have an e commerce system. You have a restaurant should
46:04
Speaker 1: be an e commerce restaurant. You have a beauty salon
46:06
Speaker 1: and e commerce beauty salons. You can sell online twenty
46:09
Speaker 1: four hours a day. You make money during the day,
46:11
Speaker 1: you build wealth and your sleep. Artificial intelligence and data
46:14
Speaker 1: analytics AI is going to be big, and this can
46:17
Speaker 1: help you get a leg up on the local hairwe
46:22
Speaker 1: business that probably is not using any technology at all,
46:25
Speaker 1: and I'm sure they're not using any artificial intelligence, and
46:28
Speaker 1: that gives you some market understanding and data analytics to
46:33
Speaker 1: understand customer preferences, predict trends, personalized marketing strategies, and maybe
46:38
Speaker 1: just outsmart somebody who's been doing business for ten years.
46:41
Speaker 1: And by the way, maybe just go buy their business
46:43
Speaker 1: from them, Like, don't protest them, buy them right, just
46:46
Speaker 1: make a proper offer. Pay them. They've already done all
46:49
Speaker 1: the work for you. They've already done the market of research,
46:52
Speaker 1: they've already created a customer base. Don't hate on them.
46:55
Speaker 1: Joint venture with them. By the way, another option opportunity
46:58
Speaker 1: is to joint venture with the businesses that are there
47:01
Speaker 1: so you bring in new customers. Maybe you bring in
47:04
Speaker 1: a different Maybe you start so if there's a beauty
47:07
Speaker 1: supply shop that doesn't do hair weaves, then maybe you
47:10
Speaker 1: start the hair weaves department of the beauty supply stop shop.
47:14
Speaker 1: Or if there's a beauty supply shop there that doesn't
47:17
Speaker 1: do maybe there's a hair weave shop but doesn't do
47:24
Speaker 1: hair styling, maybe you start that as a joint venture
47:27
Speaker 1: with them, with the little some of the real estate
47:29
Speaker 1: they are unusing, they're not using unusing, they're not using
47:32
Speaker 1: there on site. Or maybe you they're doing all synthetic hair.
47:35
Speaker 1: Maybe you propose to do natural hair. And you have
47:39
Speaker 1: now pioneered, in this example, relationships in Brazil, in India
47:43
Speaker 1: that they don't have because their relationships are just in China.
47:45
Speaker 1: And so you're bringing in value add it. And as
47:48
Speaker 1: my friend Robert Grew would say, ten to one is
47:50
Speaker 1: equal ten. So if they're doing, you know, five hundred
47:53
Speaker 1: thousand dollars in business, you don't want. You're not trying
47:55
Speaker 1: to take their business, but you're saying, look, if I
47:57
Speaker 1: can raise revenue to seven fifty seven fifty thousand dollars
48:00
Speaker 1: a year in business, can I join venture with you
48:03
Speaker 1: and you give me half of the profits above five
48:06
Speaker 1: hundred thousand dollars has called a joint venture or strategic
48:08
Speaker 1: alliance in this example, and that's in this example, you're
48:11
Speaker 1: using your hustle and your your your game, your ability
48:15
Speaker 1: to talk and to sell, and your network of women's
48:19
Speaker 1: clubs and churches and nonprofits and community groups that you
48:23
Speaker 1: are connected to to bring in more business, new kinds
48:26
Speaker 1: of business to this existing store. So a strategic alliance,
48:30
Speaker 1: a joint venture, or purchase the shop. And because the
48:34
Speaker 1: shop already has existing revenue, you can get bank financing
48:38
Speaker 1: and traditional financing because it's not based on you as
48:41
Speaker 1: a person or your credit score. It's based on the
48:43
Speaker 1: revenue of that business. So in some a big way
48:47
Speaker 1: for us to start businesses actually is to buy businesses.
48:53
Speaker 1: R and D, research and development, innovate again new products,
48:58
Speaker 1: eco friendly and ethnically source products UH to attract a
49:04
Speaker 1: broader customer base concerned with sustainability. I've already mentioned e
49:09
Speaker 1: commerce UH in an artificial intelligence UH, professional training cosmatology
49:15
Speaker 1: schools established and I don't use you know, I don't.
49:18
Speaker 1: I don't use controlled notes. I'm just riffing here. I'm
49:21
Speaker 1: talking about heart establish and support cosmatology schools that focus
49:27
Speaker 1: on African American hair care, training professionals who can innovate
49:30
Speaker 1: and lead in the industry. You create a strategic alliance
49:33
Speaker 1: with them, UH workshops and seminars, conduct workshops and seminars
49:38
Speaker 1: to educate consumers and entrepreneurs about the hair care industry
49:41
Speaker 1: and specifically do workshops and seminars on hairstyling and all
49:44
Speaker 1: that stuff. And you can get customers by doing that.
49:48
Speaker 1: And partner with churches, big big I would I would
49:51
Speaker 1: do a whole network partnering with with churches. And the
49:54
Speaker 1: churches have an economic development department or the housing department.
49:59
Speaker 1: They've already shown them to go beyond church on Sunday.
50:02
Speaker 1: They want to be a seven day a week experience
50:04
Speaker 1: for the black community. Imagine parting with you know, some
50:08
Speaker 1: of the church denominations or some of the megachurches or
50:12
Speaker 1: and bringing this piece again is another joint venture strategic
50:15
Speaker 1: alliance example where they bear the cost of products and
50:20
Speaker 1: all that stuff, and the leases and all that stuff,
50:22
Speaker 1: and you just bring in your ability to hustle and
50:27
Speaker 1: innovate to the game. Leverage cultural influences, highlight the cultural
50:32
Speaker 1: significance of hair and the africaaer community through marketing and
50:36
Speaker 1: branding efforts, use media and influencers to celebrate and promote
50:41
Speaker 1: black beauty standards, encouraging pride and support of black owned
50:45
Speaker 1: hair care brands. And I mean think about the Essence Festival.
50:49
Speaker 1: I mean imagine if you could get all the black
50:52
Speaker 1: owned hair weave businesses to come together and sponsor some
50:56
Speaker 1: boosts at the Essence Festival as an example, isn't more
50:59
Speaker 1: than it becomes more than a party, becomes a huge
51:02
Speaker 1: revenue source once a year for you. But think about
51:06
Speaker 1: all the conferences and events that happen. You know, maybe
51:10
Speaker 1: I'm going too far, Maybe women are not going to
51:12
Speaker 1: buy here we use at the Gallas and not maybe
51:16
Speaker 1: going maybe going a bit too far, but you get
51:19
Speaker 1: my point. Build strong community ties, a host community events,
51:34
Speaker 1: hair shows, and exposed to engage with consumers directly and
51:38
Speaker 1: build brand loyalty. An influencer strategy there you go right.
51:44
Speaker 1: Partner with influencers and celebrities to reach a broader audience
51:47
Speaker 1: and create buzz around black owned haircare products. Why aren't
51:50
Speaker 1: these celebrities? I think if you want to get a
51:53
Speaker 1: partner in this business, and I'm not telling you to
51:55
Speaker 1: do this, right, I'm just saying, it's just if you're
51:58
Speaker 1: a new ballplayer at a new basketball player, football player,
52:02
Speaker 1: money is burning a hole in your pocket, right, they
52:04
Speaker 1: wasted on nothing. Maybe you can convince one of these guys,
52:07
Speaker 1: you know, to invest in your business. Or if you
52:11
Speaker 1: see some celebrities or singers or whatever, they understand the
52:15
Speaker 1: value of this product, right, so maybe you can convince
52:18
Speaker 1: one of them to partner with you. And if they
52:20
Speaker 1: don't put any money in it, maybe they just agree
52:22
Speaker 1: for a percentage of the business to promote it. I mean,
52:24
Speaker 1: how valuable could that be? I mean that that has
52:26
Speaker 1: to be extraordinarily valuable just to have them promote the business.
52:31
Speaker 1: So we've we've covered a lot, a lot of ground
52:36
Speaker 1: in this podcast. I hope it's been helpful. I hope
52:41
Speaker 1: it's been inspiring. I want you to be positive. I
52:47
Speaker 1: want you to understand that it is not racism or
52:53
Speaker 1: you know, sexism or whatever else that you know has
52:58
Speaker 1: us buying this product from somebody else. It's that they
53:02
Speaker 1: saw market benefit and emotionalism from us that we were
53:06
Speaker 1: just so excited we're going to go buy this product,
53:08
Speaker 1: and they invested time, energy, resources to sell it to
53:13
Speaker 1: us at a price point that we would embrace. You know, again,
53:18
Speaker 1: Black communities have a very strong cultural and esthetic emphasis
53:23
Speaker 1: on hairstyling, including weaves, extensions, and wigs, creating a consistent
53:27
Speaker 1: and lucrative market for what has been up until now
53:31
Speaker 1: Asian mostly Asian entrepreneurs, and these underserved markets. Historically, mainstream
53:36
Speaker 1: beauty supply chains did not cater adequately to the specific
53:39
Speaker 1: hair needs of Black consumers, creating an opportunity for specialized stores.
53:43
Speaker 1: And these specialized stores up to now have been Asian immigrants,
53:47
Speaker 1: particularly Koreans, who have again these strong networks and business
53:51
Speaker 1: knowledge and the beauty supply industry including sources and distribution
53:55
Speaker 1: and contacts back at home, and are willing to work
53:57
Speaker 1: long hours and sacrifice and not get paid right up front,
54:01
Speaker 1: and have a humble spirit and build trust in our relationships.
54:05
Speaker 1: And they again a low barrier of entry, meaning that
54:08
Speaker 1: the stores are not that expensive to start. I've already
54:11
Speaker 1: talked about that. You can, you know, you can really
54:13
Speaker 1: start one of these stores with a few thousand dollars
54:17
Speaker 1: online and you know it appears, you know, I mean,
54:22
Speaker 1: my guess is twenty five thousand dollars would get you
54:24
Speaker 1: going on a retail store, and it appears if you
54:28
Speaker 1: if you worked it really, really well, you'd be profitable
54:30
Speaker 1: within a year. It's unheard of for a business profitable
54:33
Speaker 1: within a year. So think about this. Don't be mad
54:37
Speaker 1: at folks for doing it, Salute them, applaud them. See
54:40
Speaker 1: if you can joint venture with them, See if you
54:42
Speaker 1: can do a strategic alliance with them. See if you
54:44
Speaker 1: can buy their shop, Because maybe they're just tired and
54:46
Speaker 1: ready to get out and there's no excess strategy so
54:48
Speaker 1: that all they've got is to that revenue for the
54:51
Speaker 1: rest of their life. But if you can buy the
54:53
Speaker 1: store front and give them a check to leave to bounce,
54:55
Speaker 1: and you get evaluation on the store, so you know
54:59
Speaker 1: what you're paying for, or you know you're paying a
55:01
Speaker 1: fair price, and now you're the owner of the store.
55:03
Speaker 1: You don't have to go start from scratch. But make
55:05
Speaker 1: sure if you buy the store, you want a contract
55:08
Speaker 1: which includes an assurance that their suppliers are going to
55:11
Speaker 1: give you a long term contract for the cost of
55:15
Speaker 1: goods from the same suppliers they're getting it from. So
55:18
Speaker 1: if you want a customer list, you want a supplier list,
55:22
Speaker 1: you want a vendor list. You want longtime contract with
55:26
Speaker 1: those suppliers and those vendors. You want the owner to
55:30
Speaker 1: send notices several to their customer lists letting them know
55:34
Speaker 1: that they should trust the new owner and that you're
55:37
Speaker 1: they're endorsing you. There are certain things. Again, my team
55:41
Speaker 1: at Operation Shop can help you walk through this, not
55:43
Speaker 1: just Operational. There's tons of other organizations that can help you.
55:45
Speaker 1: But I'm the founder of Operation Hope, so I'm endorsing
55:48
Speaker 1: this as a strategy. Go to our small Business Programming,
55:52
Speaker 1: our entrepreneurship programming, go to our one MBB programming, One
55:56
Speaker 1: Me and Black Businessness Shift. Get the book Financial Literacy
55:58
Speaker 1: for All as a pro and go back and listen
56:03
Speaker 1: to this podcast over and over and write down all
56:07
Speaker 1: the notes and then you can ask my coaches specific
56:10
Speaker 1: questions if I walked past something too quickly. I hope
56:15
Speaker 1: that you've enjoyed this. This has been John O'Brien and
56:18
Speaker 1: this is a Black Effect Network podcast series. This is
56:22
Speaker 1: John O'Brien on money and wealth. This is my weekly
56:25
Speaker 1: poll pit of finance and my place for the silver
56:32
Speaker 1: rights movement are the third reconstruction opportunity for all. Whether
56:37
Speaker 1: the new color is not black or white or red
56:39
Speaker 1: or blue. It's green as in the color of US currency.
56:43
Speaker 1: And this is a global movement. And yeah, we shouldn't
56:48
Speaker 1: be asking some We shouldn't be having to go to
56:50
Speaker 1: Uganda and wonder why some Chinese brother, very nice person
56:54
Speaker 1: and selling fruits and vegetables to our own people in Uganda.
56:58
Speaker 1: I mean, I love that that's happening, but we should
57:01
Speaker 1: at least say we don't want to sell fruits and
57:04
Speaker 1: vegetables to our people in Uganda. We've looked at it.
57:06
Speaker 1: It's not profitable enough or whatever the thing is. It's
57:09
Speaker 1: not something we want to do. We want to go
57:10
Speaker 1: in another business industry. But we shouldn't just be consumers
57:13
Speaker 1: wherever we go. Can I get an amen? All right?
57:16
Speaker 1: This is a church of what's happening now? And what
57:18
Speaker 1: have you done for me lately? This is John O'Brien.
57:20
Speaker 1: I'm out spread the word Money and Wealth with John
57:37
Speaker 1: O'Brien is a production of the Black Effect Podcast Network.
57:40
Speaker 1: For more podcasts from the Black Effect Podcast Network, visit
57:44
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57:48
Speaker 1: your favorite shows. P