The Profitability of Hair Weaves

pick it. We're not gonna pick on anybody. It could be a lot of laughter and a lot of jokes for this this segment that we wanted to including my own. I used to have a shag. I had a hair extension when I was nineteen years old. I think I had long hair back in the day. The Jerry curls were that and I wanted I wanted the hair extensions. I had it down to my collar right. It was two inches or whatever, but I got it done. Yeah,

So I'm not hating non it. Members of my family growing up part took in the consumer product called hair waves, and so it's all good. I just want you to benefit from it. I want you to benefit from the business model. I want to break down what's going on in our communities. So the name of this, the topic of this week's podcast is do you know how the profitable hair weaves store business model actually works and who's

working in it? And here's the answer. I'm going to break it down for you and take you from the streets to the suites and then return you back to the streets as in the consumer market, with you in mind, so that you can take control of your in your destiny. Before I get into this, why did I do this? I'm going to break down a range of store business models or business models that affect our community that we see all the time and we walk pot basted, drive by it, par take in it, pay it no mind,

don't think about it. But it has everything to do with our quality of life and the lack of wealth creation maybe that we could be participating in because some of this stuff is almost market bulletproof, like hair care products. But before I get there, let me tell you how I've been thinking about doing this topic for years now and why I was in Africa had to be ten years ago. I was in Uganda, I believe it was

I was giving a speech on economic empowerment. And on the way back to the airport, the hosts, We're trying to get to the airport, and there was no real traffic coordination or traffic laws. It appears that I could discern there and this is more than ten years ago. They might have gotten better since. But on the way there that my life was flashing in front of me from cars zipping in every direction. I noticed to the

right there was a fruit and vegetable stand. And in the middle of this African country, this fruit and vegetable stand was run by an Asian family or an Asian group. They look Chinese to me. Now let me start by saying, I'm gonna mention Asians a couple of times in this podcast. I'm not hating on them. I think that this is brilliant that they found a way to take advantage of. My question was, how in the heck did my Chinese

brothers and sisters. And I'm gonna do a whole podcast on China and Africa, by the way, so hold on for that one. But how in the heck did my Chinese brothers and sisters find a way to sell you your own fruits and vegetables? On a street corner in Uganda. I think it's brilliant. I just and know if people walked her was walking by them like it was normal and clearly taking advantage of the opportunity to buy from them, and no one said a word. I did, I asked

my driver, who seemed quite befuddled. And I had come there to talk about economic development, economic empowerment, so I was a little I'm choking on. I'm choking myself because this is such a fascinating topic for me, and so coming closer to home, how many hair weave stores now we all know, I mean you see them everywhere you see. Sisters are sisters? Why am I picking on sisters? No? They look beautiful and it's it's some of this. I mean,

this is true art form. So this is this is I'm just simply asking a question of how big do you think this market is for harroweave stores? And let me see if I can unpack where the customers are for these stores. Number one Atlanta, Georgia, the Black Mecca they call it. Number two Houston, Texas, Number three Los Angeles, California, Number four in New York City, five Chicago, Illinois, six Detroit Michigan seven, Dallas, Texas eight, Washington, d C. Now

I've already given this away a little bit. I've already mentioned that Atlanta was a black mecca known for its vibrant cultural scene, and it has of course numerous beauty so lines and beauty supply stores and yes, Harroweve specialty stores, et cetera, and most notably in places like Decatur in southwest Atlanta. But all over the city you have Houston, which has a large black population, and LA with a diverse but notably most of the stories are in South

LA at Inglewood in Los Angeles. So wherever you are, Hello the third ward by the way in Houston, Texas and other inner city neighborhoods and hubs for beauty supply stores. New York City, Harlem, Brooklyn, Queens and notable areas with high concentration of beauty supply stores. And South Side and West Side of Chicago. Same my yeah, my family actually is in that business. In Chicago, East Detroit in neighborhoods

like Midtown have significant numbers of beauty supply stores. Give me shout outs for these places where you live, and you know where I'm talking about, Dallas, Texas. South Dallas and oak Cliff are prominent areas for beauty supply stores. Washington, d C. Anacostia in Northeast d C of numerous beauty supply stores. What's consistent about all of these places? Black people? We are several billion dollar market billion with a B for hairweave stores. I didn't say beauty supply. I didn't

say the beauty industry. Just to give you some context the beauty industry. The American economy is twenty six twenty seven trillion dollar a year economy. The whole economy, they call it GDP gross domestic product, largest economy in the world. The haircare beauty broader segment is about ninety three billion big several billion, at least two and a half the three billion alone is this submarket I'm about to tell you about, and of hair weave stores, most of which

we don't own. So we're buying it, but we don't own it. The fact that we don't own it is my issue, not the fact that we're buying it. And so be very clear on what I'm talking about and why I've decided to focus on this area. The target audience are primarily women of various age groups who are interested in the hair, weaves, extensions, and related hair care products, although men partaking this as well. I tell you I had a hair extension when I was nineteen twenty years

of age. Bill shag in the back. I've already mentioned that. So I'm owning my piece. Location of high traffic areas near other couple of businesses like beauty salons, barber shops, fashion stores, accessible and highly visible. Now, one of the reasons why Black communities are targeted is because we have such value for culture and cultural looks, and we put

a high index. We underscore the different fabulous looks that we can can create, and that includes hair texture, and we changed up our looks and we're as a result of that a pop culture. We are, you know, interesting as relates to look, feel, fashion, music all around the world. Again, are we owning it? Is the question I'm asking here now? Who owns these businesses? Many Asian immigrants, particularly Koreans, have established strong networks and business knowledge and the busy beauty

supply industry, including sourcing and distribution. Over time, these businesses have developed a deep understanding of the preferences and needs of Black consumers, which help in tailoring their offering. They started in the sixties and the seventies actually coming into these neighborhoods and specializing and God bless them again. They've done a brilliant job. And I'm going to talk to you about how we can potentially join them in dominating

this industry within ten years. Sharing in the industry or dominating it, I mean, I mean it's we are the customers. For God's sakes, we should haven't shot it at least having a share of the market, if not owning the market. One of the reasons that Asians have done such a great job up until now is that they have a great network to source the product from the factory, particularly the synthetic product, all the way through the upward distribution change.

So let me talk about some of the structural issues. The imports come from places like China, India, and South Korea. They again, these are long time relationships where they get preferred pricing bulk orders at low per unit costs, enabling competitive pricing and high profit margins. I'm gonna get to highrofit. I'm gonna get to the profit margins in a minute, and make sure you sit down when I tell you

what the profit margins are. Leveraging their low cost base from direct imports, they can offer competitive prices while maintaining good profit margins. Stocking a wide range of products in various price points caters to different customer budgets, from affordable synthetic hair to premium human hair extensions. High turnover frequent demand for hair products combined with a high customer base, and sure is steady cash flow and high turnover rates.

Turnover rates meaning that the that the inventory keeps turning over quickly, right, they don't have to hold it for long. It comes in, It doesn't shit on the shelf for long. It's come in. They buy it and they don't need lines of credit and bank loans all that stuff because it turns over. It moves really quickly. Large stores or chain chains benefit also from economies of scale, reducing the costs even further. And again I'm gonna get to that

in just a second family run businesses. Many of these stores are family operated, reducing labor costs even more than not paying their family members for some of the labor. I'm not gonna deal with the labor law issues there, but you know, folks work their stuff out the way they work it out. They tend to have built, you know, build strong relationships in the community. That's really smart. Now let's talk about the profit margins. Gross margins hair weaves

and extensions. These products often have gross margins ranging from So we get this out. Keep in mind the grocery stores have a margin profit margin of three to you know, three to four five percent on average or some of the stuff on their on their shelves grocery stores. Okay, so hold on. The profit margins range from fifty to one hundred percent or more. For instance, a human hair weave that costs fifty dollars wholesale might sell for one

hundred fifty dollars synthetic hair. Generally these have lower margins than human hair, but they can still offer forty to seventy percent gross profit margins. Then they have other products that they, you know, sell ancillary to the hair weaves in these stores. That includes combes brushes, styling tools, which can of margins between forty and sixty percent. Now let's get into the actual revenues again. There are thousands of

these stores across the country. As you're listening to this podcast, you might draw I buy some of these stores. You're like, oh there, right there, right, don't go in chastising to people about their business model. You could have done it, and you still could do it. Just you know, salute them, God bless them, and don't go and asking them all the details about their business. They're not going to tell you. And they ever you know, they're they're not give you

their special sauce. But I'm going to give it to you so that you can compete on a fair basis. Right, maybe even partner with them even better. I love joint ventures. I'll get to that in a minute. Revenue small stores annual revenue can range between one hundred thousand to five hundred thousand dollars. This is a small store one store, medium to large stores. These stores can generate between five hundred thousand over one million dollars in annual revenue. Did

you hear me per store. I've already told you. The turnover rate of the inventory is expeditious, is quick, quick, quick, so they don't even have to hold inventories for long periods of time. Chains and franchises. Large chains or franchise stores can be can see revenues in the millions. Net profit net profit margin typically ranges between ten to twenty percent after accounting for all expenses rents, utilities, payroll, employees, inventory, marketing,

et cetera. For a store with say five hundred thousand dollars in annual revenue, a net profit margin of say fifteen percent, would result in about seventy five thousand dollars in profit. And if you wanted to have one hundred and fifty thousand dollars annual net profit for your family in this example, you'd have to have two of those small to medium size stores. Here's some of the cost structures. And I'm gonna get into some different business models between

small stores, medium sized stores, and large stories. And I'm gonna get into some other fun facts about this business. Fixed costs rent can vary significantly buy location, but it typically ranges between a thousand and five thousand dollars per month for you know, a retail storefront. You see them in the strip centers, the corner malls. Sometimes even what's going on with commercial real estate. You can get very good deals in even prominent shopping centers these days, right,

so shop around. No pun intended utilities generally between two hundred and five hundred dollars per month. I hope you're taking notes on everything I'm saying, and pick up my book, Financial Literacy for All, which is now a national bestseller in economics and business finance, number one for the last three and a half months on Amazon. You can also find it in black bookstores. You can find it at Walmart,

Barnes and Nobles, etc. It's number one. They had to reprint it already, and I thank my publisher and all those who sought it, supported the book when it came out, and all of you who've now giving it almost five star reviews online. Get the book, underline it and began to put notes like this as a fold in to what becomes a business manual for your life. You know, how are you going to build wealth? Is you make money during the day, you build wealth in your sleep.

Maybe you're making money by having a job. You're nine to five, Maybe financis you're five to nine. Maybe this is your five to nine hustle. Maybe this is your dream to build generational wealth and have some fun at the same time. Because maybe you're a lady listening to this and you love hair. Maybe you're a guide listening to this and you love the science of hair. Are you you know or or you love the hair business. My brother Lands Triggs, my brother and friend Lands Triggs.

Not my brother brother, but my brother brother, who runs the program division at Operation Hope. He was in the haircare business. That's where I met him actually years ago, when he and I both danced on Soul Train in American Bandsage. Yes, I dam on Soul Train and American Bandstand me and or Lance and I did that, which is where I needed the brooch on my scarf and my big leather jacket and my little hair extension, my hair, my hair situation for my my shag. You know that's

back in the day. Yeah, you can go and try and find the episodes if you like. Good luck. I'm not going to help you. But so, the haircut business is a big is a big business, and I'm breaking it down to small bite size consumable business plan for you. So rant between one thousand and five thousand dollars per month on average, General utilities about two hundred to five hundred dollars per month. Insurance and licenses can range between

five hundred to two thousand dollars annually. Okay, you are to check on any licenses that you might need, and insurance. You definitely want to have insurance you would have a business like this or any business. Variable costs. Inventory. The largest variable costs, comprising fifty percent of the revenue, is the you know, the inventory itself, which is both the

synthetic and the real hair. Labor employees can variable. For a small store, labor costs might range you, you know, two thousand dollars to maximum of about ten thousand dollars per month, depending on the number of employees and local wage rates. Marketing costs, you know, that'll range from a few hundred dollars to several thousand dollars depending on how

you do it. But social media. You do a lot of your marketing through social media and through community, your clubs, you know, organizations you're part of, et cetera, et cetera, et cetera. I will get to that before we finish on how you can possibly dominate this industry. Examples for financials for a small store. This is a medium small store, Okay, about three hundred thousand dollars in revenue. Again, I hope

you guys are writing this down. You can always go back and take some notes, you know, and write it down later. Costs of good solds COEGS, COG, cost of good sold on a three hundred thousand dollars store. What did I tell you? It's a fifty percent profit margin? Okay? So the cost of goo good sold is going to be about one hundred and fifty thousand dollars in this example. Okay,

gross profit? What's that going to be? About one hundred and fifty thousand dollars fifty percent operating expenses a total of about one hundred and five thousand dollars in this example. Let me break this down. Rent thirty six thousand dollars in this example, Utilities three thousand dollars in this example, Labor forty eight thousand dollars in this example, marketing five thousand dollars in this example, miscellaneous insurance licenses, et cetera

thirteen thousand dollars in this example. And so in this particular example, you're going to make a profit, a net profit of forty five thousand dollars. You see how that worked. So you had your cost of good sold, which is the product itself, right, that's half of your revenue. So now you get one hundred and fifty thousand dollars left.

And of that you have operating expenses of about one hundred and five thousand dollars in this example, and so you have a net profit of about forty five thousand dollars. And this is not a very efficient business model. This is one of the least efficient. It's a small, single soul standing store they call it. But it's still not bad. That's still even paying really the highest you know, in

each segment. You're still making you know, forty five thousand dollars a year, call it fifty thousand dollars a year before taxes. And you should have a reasonable tax ride Austin if you're running a business like this. And so if you want to make you know, two hundred and fifty thousand dollars a year with this model, you need five stores and you want to have it in your local areas. You can drive around and visit them all.

Scalability and growth. Successful stores can expand by opening additional locations or franchising. Of course, online sales. I'm a big booster for that. You should go to our one million Black Business one MBB platform, our partnership with shopify and open an e commerce business. As an example, it's a low cost way you want to have rent and all that stuff in the traditional model I talked about. So your profit margin should go up one mbb one million

Black Business Initiative Again. I'll come back to that in more detail before we finish. Product diversification is introducing new product lines, exclusive brands, our customized services can enhance customer loyalty, increase your sales. This is a really profitable business models that we are not taking advantage of. And I'm not gonna say people are taking advantage of us. I think that people are just targeting a great customer base that has one point five, give or take trillion dollars an

annual consumer spending. And we over index on beauty and health. So we already talked about the biggest the biggest cities. Now let's talk about real hair versus synthetic. Now. I don't know anything about the science of this, lady, so don't get down on me. I'm talking about just the economics. Right, you don't know what you're talking about. I only like it human hair, Okay, cool. I have no opinion here other than I want you to own what you own.

If you can parse that message, maybe I shouldn't have done this episode. I could have found an easier topic, less culturally sensitive. Of course I'm gonna do it. Synthetic hair affordability. Synthetic hair is generally more affordable than real hair, making it accessible to a wider range of customers. This affordability contributes to its popularity amongst individuals who are cost effective, are cost sensitive, and they're looking for, you know, a

cheaper option. Now you'll find a lot of these stories. Now, these stores are everywhere you find black people. Black people are the number one. If I didn't mention it, we are the number one customer for hair weave, for the hairwaf sector of hair weave extensions wigs in the country. Isn't that crazy? Number one? Uh? Number one customer uh. And we don't own it. And a lot of these stores you're gonna find in five hundred, six hundred credit

score neighborhoods. And it doesn't mean they're targeting you because you know of your of your credit score. I'm just saying that for some reason, they there's a super concentration, probably just because there's a super concentration of African Americans in these neighborhoods. There's a there's a super concentration of these stores. There are some stores that I think are predatory. Check cashiers paid some of some check cashers, payday loan lenders,

rental own stores, title lenders, liquor stores. I do believe a praying on certain neighborhoods and communities. I don't think that hair web store is a predatory. I think they're targeting it very smartly. So the synthetic is just less expensive. Synthetic hair comes in a wide variety of colors, styles, and textures, allowing for more versatility and styling. It also is more readily available than real hair. Uh low maintenance. Synthetic hair requires less maintenance than real hair and retains

its style better in various weather conditions. Again, ladies, don't start arguing with me on this or guys right, I'm just telling you. You know, from a marketing perspective and a buying perspective, you know, if you want lower cost product that you know is more flexible quotation marks, and you do synthetic that more people buy, and it's cheaper real hair, you know, natural it has more of a natural appearance. Real human hair is often prefer preferred for

its natural look and it's feel. It can be styled, colored, and treated just like a regular natural hair, making it a popular choice for those seeking a more authentic appearance. Translation, those who got some money are not so price sensitive and want to have a more authentic look will spend more money for natural hair. Real hair extensions tend to last longer than synthetic ones, especially with proper care. This durability appeal to customers looking for a longer term investment

seat investment. Real hair can be heat styled and permed, offering more styling options compared to synthetic hair, which can be limited in terms of heat tolerance. Profitability. My favorite topic, higher markups for synthetic hair. Despite the lower price points, synthetic hair can be sold at a higher or high markup. Retailers benefit from high volume sales and relatively low hosts sale costs. So there you are right there like that, you can just stop right now at minute of twenty eight.

If you want to know why this business has taken off off, You've got the synthetic hair, which is high turnover. It comes in and sits on the shelf very short pair of time and it is gone. It's low costs you can mark it up to bijeebers and back and sell it pretty quickly. It's pretty dependable as a sales product. And then you have repeat purchasers who because you have dedicated this sort of dedicated customer base. Real hair is a higher price point, it's soda, a significantly higher price

point than synthetic hair, resulting in higher revenue per unit sold. Okay, so quality over quantity and of course benefits from also this loyal customer base who says I want only to get human hair. There is a noticable shift in demand and customer demand towards real hair due to the natural appearance and durability. However, synthetic hair remains popular. It's affordability and variety, so it's never the there's a flight to quality,

so to speak. Right when investment community starts having trouble on stocks and bonds, all the flicky stocks go away. People and companies tend to investors tend to go to do a flight to quality, to go to to the standard bearers, the most dependable companies and invest there. And so there is a shift by some consumers to higher quality or natural hair. But this low cost option is not in my opinion going to ever go away because

it's lower cost period. And there's also advances and technology has led to the production of higher quality synthetic hair that more closely mimics the look and feel of real hair of real hair. Do you know this is going to be just for black folks? A ten billion dollar industry? I mean, this is crazy now. Sourcing is one of the reasons why our Asians brothers and sisters have been able to control this market, and they've been sourcing it

primarily from traditional Asia like China. You can just say China basically and stop there. But I want you to think now about India in Brazil, Okay, expand your mind. You've got temple hair donations in India. India is one of the largest exporters of human hair. This is natural hair primarily sourced from temple donations. Devotees of Hindu temples, especially in South India, donate their hair as an offering. This hair often referred to as as Remi hair. I

hope I'm saying that right. Remi here remy hair or eat and why it is highly valued because the cuticles are aligned, making easier to manage and style. After collecting the hair is process cleaned and sort it before being exported in Glad is clean. Indian hair is popular for its texture and quality, and it is used extensively in the global hair extension market. Now, Brazil. Do you know that one of the large its populations of Africans outside

of Africa is Brazil. Slaves stopped there or they were laid let off there, and it unfortunately became a huge slave trading place all the Caribbean islands, by the way, but Brazil in particular, so there is a there's a real exotic sort of blend of hair in Brazil. Brazilian hair is also highly sought after for its texture durability. It is known for its thickness and ability to blend well with various hair types. I was just talking about the diversity that sort of emerged in Brazil because of

all the mixing of of of the racist with with Africans. Uh, get this one. Russia and Eastern Europe. Hair from Russia and Eastern Europe is often considered premium due to its fine texture and natural light color, which are in high demand in certain markets. China. We know that story, Indonesia and the Philippines, and there are other places that are emerging.

But I want you to think about if you think about going into this business, I want you to think about going into markets and building relationships with manufacturers and manufacturing sources that are not controlled by those who already control the market. So what I'm saying is going outside of China and maybe Brazil is an option, maybe India is an option for you. And the business is extraordinarily lucrative, and we don't own it because we don't have the

historical context and market entrenchment. Because I mentioned that our Asian brothers and sisters started this business in the nineteen sixties and nineteen seventies, they're able to build very strong supply chain change create, meaning that from the manufacturer all the way through through shipping to in this case the US, they created an intense can create loyal community, can networks established these distribution channels that have remained robust over decades.

And I'm going to give you a suggestion of how you can work with them in a moment to supply chain control. Just sort of touched on that. Already capital and financing barriers, you know, starting a business can be capital intensive, and African Americans have been discriminated against in lending practices. We all know that, so we've not really

had access to capital. The Freeman's Bank, as you've heard me talk about extensively, Abraham loin Get created after the Civil War to teach free slaves about money, and the Freeman's Bank was upended. We never were taught financial literacy, never given the memo and how money, capitalism and free

enterprise works. That was my fourth book, the memo, uh number Love Leadership and Banking on Future of my book of Leadership, How the Poor Can Save Capitalism, the Memo yet number four up from nothing, number five, and now this book Financial Literacy for All. Go and read all of them. But in this example, I talk about the memo and how we never got the memo. We're not

done and we're not stupid. It's what we don't know that we don't know this killing is but we think we know, and no one ever taught us about free enterprise and capitalism and how it works. Which is why this podcast is so important. It's not for just black people, it's for everybody. But I super index, I over index, I overemphasize how African Americans need to come up and gain our rifle position on the economic stage because we are breed and wherever the rules of published and the

playing fielders level, we absolutely kill it. What did we do recently to break the mode of a misperception because we were the rules of published and the playing fielders level, Arts, professional sports, government service, faith community, we absolutely dominate. And even in sports, we've got professional tennis and f one

race singing all this stuff. Now we've just won a leg, our first leg in the Twitter France cycling brother just one first time ever Afghan person of African descent and one won his won a leg of the race they call it well in the Twitter France overall race. He just won what's called a stage. So this is a new stage that we can perform on. It's the stage of business and capitalism and free enterprise, and we can

find ways Operation Hope can help you. We've directed four point seven four point five billion dollars in capital to people to start businesses and own and build wealthy home ownership and other mechanisms. So go to one MBB one million Black business get your in kind grant that's worth up to twenty five thousand dollars, which includes a shopify e commerce account for free, a website, a domain name, a business plan, all this stuff to help you start

your business. You can start this business as an example of you like or a range of others that I will unpack on this podcast. Network or you can do. You can research on your own. So number four for the barriers and why we haven't done this community and network support. We we you know Asian entrepreneurs have benefit from a strong community and network amongst their own for business advice and financial backing and logistical support. And we can do the same thing again. I'll get to that

in a minute. Business practices, UH and relationships. Over the years, Asian business owners have developed strong relationships with manufacturers and wholesalers, securing better pricing and exclusive deals. These long term business relationships create a competitive edge it's difficult for new entrants to overcome. Now, don't be mad at them for one to keep you out. I'm going to suggest to you a way to get you in, But don't be mad at them for trying to keep you out. Business is

a is a gladiator. Capitalism is a gladiator sport. They're not not trying to be your best friend, are trying to sell your product and take home a profit. They don't want you to be a salesperson competing with them, but that doesn't mean you shouldn't do it. You know, market perceptions and consumer behavior. Consumers often associate certain stores with quality and reliability based on their long standing presence

in the community. As owned business, beauty supply stores have built reputations over time, which can influence consumer behavior and loyalty. So some people look at that come into a store or a beauty supply store or a hairwave specific store, and if it's Asian owned, oddly enough, we trust it more.

I think that we need to reimagine that and think that, well, clearly, if somebody, if if there's a black owned business serving a market that is dominated by black people and we're running it with excellence, which I'm convinced we can and we will, that that should now become a new standard.

There are ongoing efforts to increase American ownership in the beauty supply chain, which I'm going to end the podcast with, But I really want you to sort of focus on the fact that you drive by these stores all the time and you don't notice that they're not owned by you, and you're the customer and the industry's bulletproof. I mean, we're going to always want to look good as we should, right, So then why wouldn't we partake in this business as

an owner? So what if I said to you that African American Americans could dominate the hairwave market in ten years? What have I said that to you? Right? So, here's some things that we would need to do. We need to have a multifaceted strategy, not emotions, not anger, not protesting, not drama. Don't go protesting the Asian businesses because they

were smart enough to buy in your neighborhood. You know, if you see some if you see some white folks peddling through your neighborhood with T shirts and short pants and flip flops on, that's not a tourist. That's an owner. And don't be mad at them. Because they were smart enough to buy a house in the hood, which is typically near transportation, near places of work, near economic activity, and low costs. And they like a shoot. I love

hanging around, good food and good people. So they bought it at low costs, much lower than they could have bought in their own neighborhood, which they would have to drive an hour in the suburbs to get to They bought it, rehabbed it, and lived in it. And we, you know, we call that gentrification, but in reality, all gentrification really means is a movement to middle class values. That is the Dictionary definition of it. So we could do that same thing. We could own our own homes,

and we could own our own businesses. So don't hate on somebody who was smart enough to see your our community as valuable and we didn't. Hello, I mean the clues of clans not running through the neighborhood with torches and saying good all the neighborhoods. You know, we're voluntarily moving out, are letting grandma's house fall into disrepair. I'm going to do a whole podcast on tax uh defaults and how that's both a major problem and a major opportunity.

Tax defaults, property tax defaults on real estate, and what it is and how to do it. It's a business, but in this particular example, I don't want you negatively approaching Asian owned businesses who've been smart enough to come in our neighborhoods. And it's not just business, just this business, you know, it's nail salons, it's let me think about it, it's quite fascinating, and they've done a really good job and they provide great value, and you know they should

be supported. Now you can compete with them and create your own strategy, but it has to be non emotional and it has to be serious business. A multifaceted strategy focuses on ownership, community support, education, and innovation. And here

are some pieces. Write this down number one. So if somebody's listening to this podcast, they only want to know the business approach of how African Americans can approach this, this multi billion dollar soon ten billion dollar industry where the number one customer is and are black folks is or depending on how we're talking about the singular person as a customer type or the group the community that

the customers that are being targeted or black folks. Why would we not want to see this as a major opportunity. They have a strategy whatever you make it. Whenever you make a decision emotionally, it's a bad decision. So make this intelligently from the neck up, knock the shoulders down. I mean, don't fight, don't get angry, get smart and create a business plan. One increase ownership and control over

the supply chain. Invest in manufacturing and distribution, established manufacturing facilities. By investing in or establishing hair manufacturing facilities, African Americans can control the quality and pricing of products that can reduce reliance on Asian suppliers and create jobs within the community. Building robust distribution channels will ensure products are widely available in competitively priced Now you can think about doing synthetic hair right here in the US, or in Africa or

in Brazil. Be creative. You can also go and go to India and cut deals with your Indian brothers and sisters, or go to Brazil and cut deals with your Brazilian brothers and sisters around their menu manufacturing to either do a preferred deal with them based on volume and consistency, or have them co to partner with you joint venture

to manufacture with you. You provide the customers and they provide the capital to start manufacturing, and maybe you have an earn out over time when you buy them out

of the manufacturing over time. There are a number of ways for you to go about this, but in all these examples, you want to go to Operation Hope are the Urban League or whoever has a training program or one million Black Business program at Operation Hope, it will help get you trained up to do this business plan if you're interested so investing manufacturing and support black owned businesses.

I've already said that this does not mean. I don't mean put a black owned business sign in your window. I mean because that may turn customers away, who may feel that you don't want a black customer. You want everybody. The color of currency is green. You want everybody to come in your business, but you might if you want to support black hairweave and beauty supply stores. Look at your business chambers. The Black Business Chamber here in Atlanta

is a great example. They do a great job. And there are other organizations and the Russell Center here, and there's all these organizations around the country, but most cities have a Black chamber. See who's a member. If there's any black owned haircare businesses that are members of the chamber, If there's a black beauty salon or a barbershop, start there and ask them if they know anybody who's black owned, and support those businesses or their dollars. Recycle number two.

Access to capital and financial resources, leverage community banks and credit unions. If you're a member of a credit union, then you have a preferred access to the capital of that credit union. Did you know that you actually own part of the credit union. If you're a member of a credit union, Community banks also reinvest in their local community. Operation Hope can help you find the bank that will most likely get you access to capital and will help

you get bank qualified. Most of these loans are going to be tied to your personal credit profile because most black businesses are sole proprietorships, and when you get started, the business does not have a credit profile. You have a credit profile, it is probably your credit score, so I want you to get your credit score up. You can also do crowd funding and try to get grants,

try to get an SBA guarantee. Look for SBA eight a business Development Program offices, and there's a whole range of options, options and opportunities to try to raise capital. I raised capital with my credit cards. I put my I started my first businesses on credit cards when I first started. So it's everything from the unsophisticated to the sophisticated, and my team at Operation Hope can help you do

that financial education. As you know, I'm big on that financial literacy is what we do at Operation Hope, the one MBB program once again, innovation and product development. This is someplace where African Americans can absolutely lutely i'd you know, like be stars because we're we're the most creative people on the planet. Uh So innovate new products that cater specifically to the needs and preferences of African American consumers. Underscore, underscore, underline, underline.

Maybe our Asian brothers and sisters can outdo you on you know, uh, manufacturing in China and the prices for this and all that, and yes, you can't compete with that very easily. But but if you come up with a different style or a different approach or a different way or different you know, manufacturing style for synthetic hair or or making synthetic here look like more human hair, or or different kind of human here. I mean again, maybe you specialize in brazil fashions or Brazil Brazilian here,

maybe it's Brazilian in India. I'm just riffing here. I'm just saying, come up with your niche and and then just innovate around it and then tied into e commerce that's selling online digital whatever business you have, you should have an e commerce system. You have a restaurant should be an e commerce restaurant. You have a beauty salon and e commerce beauty salons. You can sell online twenty four hours a day. You make money during the day,

you build wealth and your sleep. Artificial intelligence and data analytics AI is going to be big, and this can help you get a leg up on the local hairwe business that probably is not using any technology at all, and I'm sure they're not using any artificial intelligence, and that gives you some market understanding and data analytics to understand customer preferences, predict trends, personalized marketing strategies, and maybe just outsmart somebody who's been doing business for ten years.

And by the way, maybe just go buy their business from them, Like, don't protest them, buy them right, just make a proper offer. Pay them. They've already done all the work for you. They've already done the market of research, they've already created a customer base. Don't hate on them. Joint venture with them. By the way, another option opportunity is to joint venture with the businesses that are there

so you bring in new customers. Maybe you bring in a different Maybe you start so if there's a beauty supply shop that doesn't do hair weaves, then maybe you start the hair weaves department of the beauty supply stop shop. Or if there's a beauty supply shop there that doesn't do maybe there's a hair weave shop but doesn't do hair styling, maybe you start that as a joint venture with them, with the little some of the real estate they are unusing, they're not using unusing, they're not using

there on site. Or maybe you they're doing all synthetic hair. Maybe you propose to do natural hair. And you have now pioneered, in this example, relationships in Brazil, in India that they don't have because their relationships are just in China. And so you're bringing in value add it. And as my friend Robert Grew would say, ten to one is equal ten. So if they're doing, you know, five hundred

thousand dollars in business, you don't want. You're not trying to take their business, but you're saying, look, if I can raise revenue to seven fifty seven fifty thousand dollars a year in business, can I join venture with you and you give me half of the profits above five hundred thousand dollars has called a joint venture or strategic alliance in this example, and that's in this example, you're using your hustle and your your your game, your ability

to talk and to sell, and your network of women's clubs and churches and nonprofits and community groups that you are connected to to bring in more business, new kinds of business to this existing store. So a strategic alliance, a joint venture, or purchase the shop. And because the shop already has existing revenue, you can get bank financing and traditional financing because it's not based on you as a person or your credit score. It's based on the

revenue of that business. So in some a big way for us to start businesses actually is to buy businesses. R and D, research and development, innovate again new products, eco friendly and ethnically source products UH to attract a broader customer base concerned with sustainability. I've already mentioned e commerce UH in an artificial intelligence UH, professional training cosmatology schools established and I don't use you know, I don't.

I don't use controlled notes. I'm just riffing here. I'm talking about heart establish and support cosmatology schools that focus on African American hair care, training professionals who can innovate and lead in the industry. You create a strategic alliance with them, UH workshops and seminars, conduct workshops and seminars to educate consumers and entrepreneurs about the hair care industry and specifically do workshops and seminars on hairstyling and all

that stuff. And you can get customers by doing that. And partner with churches, big big I would I would do a whole network partnering with with churches. And the churches have an economic development department or the housing department. They've already shown them to go beyond church on Sunday. They want to be a seven day a week experience

for the black community. Imagine parting with you know, some of the church denominations or some of the megachurches or and bringing this piece again is another joint venture strategic alliance example where they bear the cost of products and all that stuff, and the leases and all that stuff, and you just bring in your ability to hustle and

innovate to the game. Leverage cultural influences, highlight the cultural significance of hair and the africaaer community through marketing and branding efforts, use media and influencers to celebrate and promote black beauty standards, encouraging pride and support of black owned hair care brands. And I mean think about the Essence Festival.

I mean imagine if you could get all the black owned hair weave businesses to come together and sponsor some boosts at the Essence Festival as an example, isn't more than it becomes more than a party, becomes a huge revenue source once a year for you. But think about all the conferences and events that happen. You know, maybe I'm going too far, Maybe women are not going to buy here we use at the Gallas and not maybe going maybe going a bit too far, but you get

my point. Build strong community ties, a host community events, hair shows, and exposed to engage with consumers directly and build brand loyalty. An influencer strategy there you go right. Partner with influencers and celebrities to reach a broader audience and create buzz around black owned haircare products. Why aren't

these celebrities? I think if you want to get a partner in this business, and I'm not telling you to do this, right, I'm just saying, it's just if you're a new ballplayer at a new basketball player, football player, money is burning a hole in your pocket, right, they wasted on nothing. Maybe you can convince one of these guys, you know, to invest in your business. Or if you see some celebrities or singers or whatever, they understand the value of this product, right, so maybe you can convince

one of them to partner with you. And if they don't put any money in it, maybe they just agree for a percentage of the business to promote it. I mean, how valuable could that be? I mean that that has to be extraordinarily valuable just to have them promote the business. So we've we've covered a lot, a lot of ground in this podcast. I hope it's been helpful. I hope

it's been inspiring. I want you to be positive. I want you to understand that it is not racism or you know, sexism or whatever else that you know has us buying this product from somebody else. It's that they saw market benefit and emotionalism from us that we were just so excited we're going to go buy this product, and they invested time, energy, resources to sell it to

us at a price point that we would embrace. You know, again, Black communities have a very strong cultural and esthetic emphasis on hairstyling, including weaves, extensions, and wigs, creating a consistent and lucrative market for what has been up until now Asian mostly Asian entrepreneurs, and these underserved markets. Historically, mainstream beauty supply chains did not cater adequately to the specific hair needs of Black consumers, creating an opportunity for specialized stores.

And these specialized stores up to now have been Asian immigrants, particularly Koreans, who have again these strong networks and business knowledge and the beauty supply industry including sources and distribution and contacts back at home, and are willing to work long hours and sacrifice and not get paid right up front, and have a humble spirit and build trust in our relationships. And they again a low barrier of entry, meaning that the stores are not that expensive to start. I've already

talked about that. You can, you know, you can really start one of these stores with a few thousand dollars online and you know it appears, you know, I mean, my guess is twenty five thousand dollars would get you going on a retail store, and it appears if you if you worked it really, really well, you'd be profitable within a year. It's unheard of for a business profitable within a year. So think about this. Don't be mad

at folks for doing it, Salute them, applaud them. See if you can joint venture with them, See if you can do a strategic alliance with them. See if you can buy their shop, Because maybe they're just tired and ready to get out and there's no excess strategy so that all they've got is to that revenue for the

rest of their life. But if you can buy the store front and give them a check to leave to bounce, and you get evaluation on the store, so you know what you're paying for, or you know you're paying a fair price, and now you're the owner of the store. You don't have to go start from scratch. But make sure if you buy the store, you want a contract which includes an assurance that their suppliers are going to give you a long term contract for the cost of

goods from the same suppliers they're getting it from. So if you want a customer list, you want a supplier list, you want a vendor list. You want longtime contract with those suppliers and those vendors. You want the owner to send notices several to their customer lists letting them know that they should trust the new owner and that you're they're endorsing you. There are certain things. Again, my team at Operation Shop can help you walk through this, not

just Operational. There's tons of other organizations that can help you. But I'm the founder of Operation Hope, so I'm endorsing this as a strategy. Go to our small Business Programming, our entrepreneurship programming, go to our one MBB programming, One Me and Black Businessness Shift. Get the book Financial Literacy for All as a pro and go back and listen to this podcast over and over and write down all the notes and then you can ask my coaches specific

questions if I walked past something too quickly. I hope that you've enjoyed this. This has been John O'Brien and this is a Black Effect Network podcast series. This is John O'Brien on money and wealth. This is my weekly poll pit of finance and my place for the silver rights movement are the third reconstruction opportunity for all. Whether the new color is not black or white or red or blue. It's green as in the color of US currency.

And this is a global movement. And yeah, we shouldn't be asking some We shouldn't be having to go to Uganda and wonder why some Chinese brother, very nice person and selling fruits and vegetables to our own people in Uganda. I mean, I love that that's happening, but we should at least say we don't want to sell fruits and vegetables to our people in Uganda. We've looked at it. It's not profitable enough or whatever the thing is. It's not something we want to do. We want to go

in another business industry. But we shouldn't just be consumers wherever we go. Can I get an amen? All right? This is a church of what's happening now? And what have you done for me lately? This is John O'Brien. I'm out spread the word Money and Wealth with John O'Brien is a production of the Black Effect Podcast Network. For more podcasts from the Black Effect Podcast Network, visit the iHeartRadio app, Apple Podcasts, or wherever you listen to your favorite shows. P