As a business in the personal-services industry considers expanding, what is the best strategy for allocating new capital from investors?
As a business in the personal-services industry considers expanding, what is the best strategy for allocating new capital from investors?
In 2005, Columbia Business School graduate Julie Flakstad and her associates opened Blow, a New York City salon that specialized in shampoo and styling services. Blow next leveraged its customer base by creating a hair-care product line in 2006. After raising additional capital and opening a second salon, Flakstad needed to decide how to allocate the remaining capital: should Blow open more salons or expand its product line? In this case students study the characteristics of the market, Blow's product and salon-service revenue, and the company's income statement to develop a strategy for utilizing the new capital.
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