Like many backpackers, Paul Gerrard first stopped off in Hong Kong on the London to Australia route, never intending to stay. It was 1993 and the British hairdresser decided to pause here briefly to earn some money. His scissor skills soon enabled him to swap Chungking Mansions for a small studio flat, which doubled as a one-man salon. The phone wouldn't stop ringing and he couldn't take calls and cut hair at the same time, so he hired an assistant - and then another. Booked solid, he found he was working all hours. 'There was no real decision, there was no time, I just did it,' is how he describes hiring his first stylist. Fears that 1997 would see his expatriate clients dwindle proved groundless. They kept coming, so he took a bigger leap of faith. He switched from a sole proprietorship to a limited company, with himself as an employee and put the business on a proper footing with more staff. External funding was not needed and to help cash flow during expansion, Mr Gerrard did not pay himself. Going from cutting hair to hiring several people was a big jump. 'I had no training except in hairdressing. I just did it,' he said. Now, seven years on, Paul Gerrard Hair and Beauty in Pottinger Street, Central employs 12 staff catering to both sexes and has expanded to two floors with a beauty salon. Hairdressing in Hong Kong is about as tough as it gets. Competition is stiff in both the local and expatriate markets. Although he employs both western and local stylists, most of Mr Gerrard's business comes from the smaller expatriate pool. The market split comes down to clients wanting to be confident of being understood, he believes. 'It's a language thing. To do good hairdressing you must be able to communicate.' The drawback is that expatriate turnover is high. Unlike cities such as Sydney or London, where crimpers build up a loyal following, here they come and go every week, he said. 'So you can't let your guard down, you need to attract new clients all the time. You need to keep up to date, read hair magazines and go to hair shows in the UK and Australia.' The challenge of client turnover is compounded by the difficulty of hiring and keeping the right staff. Hairdressers are a transient bunch and most good stylists are artists who need creative stimulation, or they won't stay, said Mr Gerrard. Despite having no management training, Mr Gerrard has evolved a strategy to keep his best staff. He finds out what makes each stylist tick. 'Some people want money and will work all hours to get it. Some are motivated by free time and prefer to start and leave early, while others want the chance to go on courses, enter competitions and do photo shoots.' He invests heavily in staff, and is currently paying for a local junior stylist to study overseas at a Vidal Sassoon academy and later this month he will take all the staff on a trip to a major hair event in London. 'It's worth it as a team-building exercise,' he said. 'Keeping standards up, that's the hardest part,' he said. 'You need eyes in the back of your head to notice everything from popped light bulbs to whether people are saying the right thing when they answer the phone.' The business relies heavily on the salon's three networked computer terminals, which track sales, orders and take appointments. Details of every client's previous treatments are also logged to ensure an exact match no matter who attends to them. First and foremost, hairdressing is a service industry, he said, and clients are paying for good feelings. If they don't get them, they go elsewhere. If a junior can't manage the basic service requirement of a cheerful greeting, they can expect a short career with Mr Gerrard. He rarely advertises. Word of mouth may be a double-edged sword but he believes it is still the best way to attract clients. As the boss, he admits his job is complicated by the fact he still cuts and colours hair all day. 'My problem is I can't tell staff what's what when I'm too busy.' The solution has been to employ a stylist who is officially the manager, but Mr Gerrard hasn't found that easy either. 'The hardest part has been having no previous dealings with managing or hiring - but passing it on and delegating is even harder,' he admits. He doesn't want to be cut off from the staff. 'They can come to me with anything, I'm quite flexible. As a hairdressing salon I'm under no illusions that if all my staff walk out I won't have a business.' Stories of some Hong Kong hairdressers charging as much as $3,500 for a haircut make Mr Gerrard smile - he charges a fraction of that amount. 'We just try to have the best service and happy staff. I don't believe in overcharging,' he said. He admits he has had to learn to focus on profit margins. 'The business side has been a big learning curve for me. As it's grown I've learned from my mistakes.' The beauty side, he conceded, is less profitable than the hairdressing. 'I could make the beauty therapists retail and sell with targets. But I'm not a salesman and I don't believe in forcing products down the clients' throats. I always say if it doesn't work, bring it back - probably not a good business decision but the beauty side complements the hairdressing and the clients like it. That's what's important.'