Case Study of the Month

August 2020

Case Study #1 – Roshan’s Salons

Roshan is a small salon owner in Delhi, India. He comes from humble beginnings and started as a hairdresser at a local salon 6 years ago. He now owns 6 salons, all in the same city.

The Indian government imposed a nationwide lockdown on March 22nd, 2020. Since then his salons remained shut. A few weeks ago, they opened again (in mid-June) from 7.30 am to 9 pm per day, although he believes if allowed to open beyond 9 pm, he can get more customers. However, people are still scared to step out and avoid going to salons. To cut down his costs, he had to permanently shut down 4 stores out of six. Only 2 stores are operational now – both in the same city. To maximise revenue, he runs them 7 days a week.

Roshan’s Distress

Roshan says he’s extremely worried about his staff, their families and his own family. He has accrued rent on the 2 operational stores since March; pressure from the landlord keeps increasing with every passing month. Daily operations since June barely allow him to meet weekly expenses. He had to lay off staff, leaving only 2 people per store, each of whom is paid on a daily-wage basis. This trough in business is attributable to a drop in footfall per salon – which has fallen from 50 people per day to barely 5-10 people per day. Most of these are his loyal customers – people he knew personally or those who had been his customers for years. 

Steps taken so far

He has tried recording videos of the post-COVID precautionary measures taken at the salon and circulated using WhatsApp to attract new customers but in vain. He also started calling people from his log register to book mobile haircut and shaving services, since these were the only services in demand. However, people have been very sceptical of welcoming strangers to their homes. He feels people feel safer coming down to the salon than availing mobile services and hence stopped them. 

Financial Data Available

How can Roshan sustain daily operations and pay back his debt?

AUGUST 2020