How to fund your first salon business
Owning and operating a beauty salon is a rewarding venture, but there are challenges that you will face along the way, with funding being the biggest hurdle.
One initial challenge is calculating the finances needed to open your salon. You’ll have to fork out money for upfront and operating costs, and it could still be a few months or even a year before you start making a profit.
The average beauty salon can cost anything up to £35,000 to start up, and if you don’t have decent savings, you may need to consider a loan. The main costs to factor in are rent, business rates, marketing, training, insurance, water and electricity, stock, salaries and equipment.
Some of the struggles first-time salon owners face when applying for loans can include: difficult approval processes, lengthy turnaround on pay-outs, not being approved for the full amount, and hidden set-up and admin fees.
However, banks are not your only option. You could look for investors, apply for a government grant, or look into collateral-free SME loans. With the right SME loan, you can expect a 24-hour application approval and pay-out time, and in most instances, you can borrow anything from £1,000 to £500,000, so you should be able to find a level to suit your start-up.
Whichever route you choose, consider all the costs involved and only apply for loans that don’t tie you in to unrealistic terms, provided by lenders that have your best interests as a business owner at heart.
Alice Farren is a financial journalist and SME specialist at SME Loans, a business credit brokerage that works with start-ups and SMEs.