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Getting Ready For Growth

Ready to grow your business but don't have the funds?  As most salon owners know, obtaining financing for your business can be a challenge; however it is a fundamental part of the success of any business venture - and the good news is, it's not impossible! 

Our Spring issue of Business Edge will launch a three-part series designed to help you figure out what you need to do in order to raise the funds you need to launch or grow your business.  In this article, we tell you how to lay the groundwork to getting financed.

Do Your Homework!

If you are considering starting up or growing your salon business and you need financial assistance, there are some important things you should know.  First, there is plenty of money available out there, but investors and lenders are looking for good opportunities that are submitted in clearly written and detailed applications.  Second, both lenders and funders are most likely to help people who are committed to helping themselves.  So what does this mean for you?  It means that having a great idea is simply not enough.  Before you go and ask for financial assistance, you must do some homework.  The key to a successful application lies in careful planning, research, and preparation.  Don't rush.  Take your time, and make sure you've got all the facts at your fingertips.

Know Thy Market!

Take the time to research your business idea and understand the market in which you want to operate.  If you are seeking financing to develop a specific product, say, your own brand of hair care treatments, you must be able to explain to your lender why the market needs your product - answer these questions:

• is it unique?
• does it perform better than an existing product? 
• can you prove this? 
• how are you planning to market your product?

Or, if you are proposing to open a salon, spa, barbershop or nail bar, you need to know how many other similar businesses are near you and if there is a sufficient potential client base to support your business as well.  It is critically important to your success - both in securing funding and for the long term - for you to know your market.

In the mid-to-late 90s when the nail bar industry in London was booming, many entrepreneurs hesitated to open shops, fearing that the market would become saturated.  Those who understood they would be on the growth side of the curve, however, opened shops and prospered.  When the market eventually became saturated those who had failed to track market trends launched salons that were doomed to fail.

If you've studied your market well enough you'll have monitored trends and be able to make reasonable assumptions on the potential of your business idea. 

Test Your Assumptions

Along with your market research, it is also important to get feedback and to have your assumptions challenged.  Present your idea to people whose business sense you respect, and ask them to help you test it.  Be fearless.  Examine and challenge everything from the logistics of the basic idea itself, to specifics such as costing out services and projecting profits.  Doing this exercise not only helps you smooth out rough spots in your plan, but it also serves as a rehearsal for interviews with lending and granting bodies.  You'll feel much more confident if you are able to anticipate and respond to their questions. 

Get Help

If you feel stuck, don't hesitate to get professional help.  Business owners lacking the experience, resources, or knowledge needed to develop winning business plans and applications, often find themselves turned down.  Professional loan and grant writing services are available for low or no fee.  Various business development agencies also offer workshops on the subject, should you chose to learn to do this yourself.

Make A Real Commitment

Above all, commit yourself - take ownership of the idea and the process.  Your demonstrated commitment, as shown by the care with which you do your groundwork and create your business plan, will impress your audience and your enthusiastic yet carefully prepared presentation will help you to get financed!

For information on Salon Strategies and its programmes, or to make an appointment to see a business advisor, call 020 7377 9922.