So, you’ve found the perfect premises for your new hair salon start-up, but now you need to buy equipment. Especially when you’re starting out, it’s vital to make sure your overheads fit the business cash flow. The most effective way to do that is by spreading the costs with finance.
The question is, which type of finance should you choose? How does it work, and will you be able to cover the extra costs associated with borrowing? Here, we’ll look at what you need to get your hair salon start-up off the ground and also learn about the best method for financing business equipment.
Choose cash flow-friendly business finance
It can seem like a real dilemma. With any start-up, cash flow is king, and the more you can keep your borrowing costs down, the better. Yet, you absolutely have to buy the right tools for your trade to raise revenue, and that’s why choosing finance is so important. So, what’s the ideal solution?
There are a few factors to consider. The first is probably sticking to fixed-rate deals. That helps you match borrowing costs with your revenue, so know what’s coming each month. It also insulates your salon from what’s going on in the broader economy.
Secondly, consider a loan structure that’s tied to the value of the equipment you need to buy. When a lender secures your borrowing against that, it brings down the interest rate.
Thirdly, depending on your business finances, it might help to minimise your monthly outgoings somewhat. Some asset finance structures let you use a balloon payment, which is a portion of the loan principal you pay right at the end of your finance term.
Lastly, as a newer business, you’ll need to consider qualification requirements. You’ll likely have fewer documents and accounts available than a more well-established salon, which can hurt you when it comes to financing.
The good news is you can use low doc options and still qualify for business equipment finance if that’s the case. Not only that, but you can use a balloon payment, borrow 100 per cent of the cost of your new equipment and even provide security for your loan when using this method.
What do you need, and how much will it cost?
Before you can sort out funding, you need a budget. So, what equipment do you need, and how much money will it take to get your hair salon start-up thriving?
In addition to that, how far are you going to go with décor? Depending on whether this will be an architect-designed salon from the start – the total cost can vary markedly. Depending on your location and clientele, the required budget may vary widely, meaning you must make an astute decision as to what are “must haves” versus “nice to haves”.
Here’s a list of the basics you’re going to need before you can open your hair salon start-up:
- Reception desk and waiting area
- Chairs
- Mirrors
- Specialist shampooing bowls
- Portable hair driers
- Towels, aprons, and gloves
- Professional hair straighteners and curling irons
- Combs and hairbrushes
- Scissors, trimmers, and shears
- Specialist hair salon chairs
- Salon-grade hood driers
- Hairstyling stations
Every hair salon out there is unique, and the costs will depend on how far you want to go at the start – but you can get off the ground on a tighter budget. Borrow wisely, plan carefully, and you’ll soon start building up customers and revenue.
Remember to check out any available grants
Don’t forget; it’s well worth doing some research online when you’re planning to buy new equipment. Every Australian state government provides help for new ventures. Here are some links to get you started:
- Government grants in New South Wales
- State assistance in Victoria
- Grants available in Queensland
- Tasmanian government schemes
- Help in Western Australia
- Grants for Northern Territory small businesses
- Help in the ACT
When financing your new hair salon start-up there are expenses that can be minimised and those that are necessities. Rather than hoping, creating a budget, writing a business plan and seeking business equipment finance are all actions that will positively impact your likelihood of success.
