Starting a Salon & Day Spa

[Delinquent]

Ok, my wife will be the one running the business since she's a stylist and knows a helluva lot more than me but I wanted to get some suggestions on where to start.

I have been reading through the SBA's website regarding getting started but I always seem to get overwhelmed by how much I don't know.

I have a general location which I think is a prime location given that there are nothing but $300K+ communities going up plus all the established gold communities and the nearest full service salon is 30 minutes away. I have a pretty good idea of the services and products that will be offered but what gets me overwhelmed is the business plan.

Taken from the SBA site:

I. The Business
A. Description of business
B. Marketing
C. Competition
D. Operating procedures
E. Personnel
F. Business insurance

II. Financial Data
A. Loan applications
B. Capital equipment and supply list
C. Balance sheet
D. Breakeven analysis
E. Pro-forma income projections (profit & loss statements)
Three-year summary
Detail by month, first year
Detail by quarters, second and third years
Assumptions upon which projections were based
F. Pro-forma cash flow

Ok, the financial data info is like greek to me. I have no idea about this kind of stuff. How do people who have no business education or experience do this? I have read about tons of people who had no experience but were successful in their venture.

Should I go to a local SBA office and have them explain it to me? I can definitely see how it's an incredible risk and challenge but it's the only way my wife and I will ever be able to live the way we want so this must happen.

I'm looking for any and all suggestions

 

[ZKaudio]

it's pretty easy to calculate cash flows in a salon... each hairdresser pays a weekly rent to use their station... usually around 2-300/week. Say you have 20 stations.... at 250 you'll be making 5k/month. This needs to cover your rent and utility bills (which it probably won't) You will make your money on product sales, carry a good like of skin care products along with some fine hair care lines. The markup on this stuff is usually around 150-200% so it's pretty easy to turn a good profit. Newer stylists will also opt for a percentage of their check taken out instead of monthly rent... this inevitably ends up being good for you, so look into the average percents salons charge. Remember, your salon is only as good as it's employees. So when looking to recruit stylists, get HIGHLY recommended people that already have a good clientele base. ALso, remember that they need an incentive to leave their current salon... what will it be? Will your facility be nicer? cheaper? Better location? All these things are crucial. Also run some ads in the local pennysaver or whatever for product specials... you can hedge the costs by splitting it w/ a stylist who wants to put an add in as well. I've been involved in 2 of these things so lemme know if you have any other ?'s.

 

[Razorguns]

Stock 'em full of asian ladies who work for $4/hr. There's your recipe for success.

Good Business plans are not overtly complex.

Some of the biggest companies, dot-coms, etc. in this country -- were created with billions of project plans, charts, spreadsheets and complex mathematics -- and guess what .. they flopped.

Your business is pretty simple in structure and service -- so make sure the business plan spends most of it's time focusing on these essentials.

All a business plan does -- is it requires to think through and analyze all facets of a business -- w/o having to run it first. Allows you to think of new things you may have not thought of before.

The structure of the plan, the technical details, the layout, etc. are second nature -- as long as you document, plan, investigate, research, etc. everything you can about this line of business beforehand.

Don't worry about making professional smooth business plans. Your not a professional experienced business author -- so don't fret it if the plan shows that.

Concentrate on learning everythihg about your biz, and how to make it a success -- and somehow write it down in an organized matter. Then sit back and read it again.

That should cover the bases.

 

[bran987]

Stock 'em full of asian ladies who work for $4/hr. There's your recipe for success.

Good Business plans are not overtly complex.

Some of the biggest companies, dot-coms, etc. in this country -- were created with billions of project plans, charts, spreadsheets and complex mathematics -- and guess what .. they flopped.

Your business is pretty simple in structure and service -- so make sure the business plan spends most of it's time focusing on these essentials.

All a business plan does -- is it requires to think through and analyze all facets of a business -- w/o having to run it first. Allows you to think of new things you may have not thought of before.

The structure of the plan, the technical details, the layout, etc. are second nature -- as long as you document, plan, investigate, research, etc. everything you can about this line of business beforehand.

Don't worry about making professional smooth business plans. Your not a professional experienced business author -- so don't fret it if the plan shows that.

Concentrate on learning everythihg about your biz, and how to make it a success -- and somehow write it down in an organized matter. Then sit back and read it again.

That should cover the bases.

Razor if I understood it correctly he is trying to follow the business plan outline on the SBA website in order to obtain financing. I don't think a sketch of a business plan will get that done.

 

[Razorguns]

Razor if I understood it correctly he is trying to follow the business plan outline on the SBA website in order to obtain financing. I don't think a sketch of a business plan will get that done.

Not sure -- his post didn't infer if it was just a guideline or steadfast rules for applications.

I hope it's a guideline. I don't think the SBA can or should clearly set the concrete design for every business plan since every business has different elements, complexities and topics that need to be researched.

They're all so different and so are their plans (for success).

 

[Delinquent]

Not sure -- his post didn't infer if it was just a guideline or steadfast rules for applications.

I hope it's a guideline. I don't think the SBA can or should clearly set the concrete design for every business plan since every business has different elements, complexities and topics that need to be researched.

They're all so different and so are their plans (for success).

Sorry I didn't specify but yea I think we're still gonna have to get some money from the bank even though we have about $60,000 secured in a silent partner. Main reason for the additional financing is so that we can have some sort of supplemental income during the first year or cuople years where we aren't making much of a profit.

 

[Mike LI]

Sorry I didn't specify but yea I think we're still gonna have to get some money from the bank even though we have about $60,000 secured in a silent partner. Main reason for the additional financing is so that we can have some sort of supplemental income during the first year or cuople years where we aren't making much of a profit.

Whats going on Brother? I work for a bank in the commercial lending department so maybe I can give you some information that can help you out. Many banks basically "Partner"up with the SBA. The SBA guarantee allows banks to provide financing to small and developing businesses that may otherwise not qualify for credit. That being said the banks relationship managers and business development officiers should be fluent in SBA critera and procedure and will be able to prepare your SBA application. These people also deal with businesses for a career and should be able to give you some financial guidance as you and your business get started. Do you have any local friends or aquainances that are business owners that can recommend a business banker to you? Best of luck to you and your wife on your future business. The SBA may be a great option for you. Keep us updated and let me know if I can be of any further assistance.

 

[Delinquent]

Whats going on Brother? I work for a bank in the commercial lending department so maybe I can give you some information that can help you out. Many banks basically "Partner"up with the SBA. The SBA guarantee allows banks to provide financing to small and developing businesses that may otherwise not qualify for credit. That being said the banks relationship managers and business development officiers should be fluent in SBA critera and procedure and will be able to prepare your SBA application. These people also deal with businesses for a career and should be able to give you some financial guidance as you and your business get started. Do you have any local friends or aquainances that are business owners that can recommend a business banker to you? Best of luck to you and your wife on your future business. The SBA may be a great option for you. Keep us updated and let me know if I can be of any further assistance.

Wow, i didn't know that. I'll have to ask around to see if I can find one. Thanks for the info!