7A - Testing the Hypothesis, Part 1

7A – Testing the Hypothesis Part 1

1) Cutting the hair of my fellow Marines while we are on deployment here in Australia.

2) Haircuts are very expensive for us Marines to get here in Australia. It is also very inconvenient having to go out in town to get a haircut. I could begin to cut the hair of my fellow Marines and make a rather significant amount of additional income daily as a result of this entrepreneurial venture. My service as a barber will be convenient for them, save them money, and make me money.

3) In Assignment 4A (Forming an Opportunity Belief), I interviewed three of my fellow Marines to test my above hypothesis. I decided to begin pushing the boundaries of my hypothesis by interviewing three people on base with us whom are in the Australian Army. I was curious to see if perhaps my services would also meet their “unmet need.” I also interviewed two Marines from a different company than myself.

4) The five people, whom I interviewed were all Australian Soldiers, whom are on the same military base as us. I interviewed them all separately and began by asking the five of them some of the same questions that I asked in Assignment 4A. I asked questions such as the following:

“How often must you get a haircut and how do you go about this?”

“What are the costs associated with getting a haircut every week?”

“How do you feel about having to go through this process every time you have to get a haircut?”

“If I were able to cut your hair to standards that would pass inspection for a cheaper price than you typically pay, would you be interested in my services?”

The responses that I got from all five of my interviews were very helpful in determining the boundaries of my hypothesis.

They are not required to get haircuts every week. Their requirements are simply that their hair cannot touch their ears and it must be gradually faded. The length of their hair on top cannot exceed four inches. Their hair must look professional (this is a matter of personal opinion; however, if their chain of command deems that their hair doesn’t look professional, they will be told to go get a haircut).

During my interviews, I noticed that two of the five soldiers did not have their hair within the regulations that they are required to have it. I asked them, “I notice that your hair is pushing the regulations a little bit. Is this something that you can get in trouble for?” They both responded by telling me that their chain of command is relatively relaxed and is unlikely to reprimand them if their hair is just a little bit out of regulations.

Similarly to us Marines, the Australians must go out in town every time they want to get a haircut, and they typically pay an average of $30-40 per haircut. Unlike us, they have their own vehicles, so they do not have to pay for taxis; however, they still have the expensive of the gas that they use to go get a haircut. On average, going out in town to get a haircut typically costs them a total of $40-45 and takes an average of two hours of their time.

5) Four out of the five of them told me that my services would be of interest to them; however, they probably would only want me to cut their hair every two to three weeks. I was able to conclude that I can expand my prototypical customer to include Australian Soldiers; however, U.S. Marines will be my more regular customers.

When asking my fellow Marines how much they would be willing to pay for haircuts, the consensus was $10-20 for a haircut each week. When I asked the Australian soldiers this same question, the four whom were interested in my services responded $15-20, $20, $25, and $25. Doing more interviews/collecting more data would likely lead me to the conclusion that Marines may be more regular customers of mine, but the Australians are willing to pay more for my services that the Marines are.

My interviews (with 5 Australian Soldiers and 3 U.S. Marines) have led me to conclude that I will be unable to meet the large demand for my services. Although I may not be able to meet the needs of every single Soldier and Marine (without recruiting others to help me cut hair), I presume that charging a sum of $20 per haircut will lower the demand for my services to the perfect amount. Charging $20 per haircut is the best way for me to exploit this opportunity. Should I find that I do not have enough customers, I will experiment with lowering the charge for my services. Should I find that I have too many customers, I will raise the prices of my services to increase my profits.