Sustaining a new business is definitely the most difficult task for an entrepreneur in the salon business. Here are some tips and tricks that will help you make the right financial decisions for your business ventures
Running your own salon business is challenging – but once you have got it under control, it can be rewarding too. The first step to kick-starting any business is raising the capital and there are many ways to do it depending on your business model, projections, and how well you can sell it to potential financial partners.
Bangalore-based Suman Chaudhary – Owner, Liwa Spa & Salon shares a few tips on how to raise capital for your salon business through various sources.
Bootstrap your business
Many start-ups and small-business owners rely on self-funding their projects for a significant amount of time until formal funding opportunities come along. Pooling in from your savings has its benefits too – especially as potential investors will find it reassuring in the future. While the opportunity is flexible, do keep profitability in mind.
Kith and Kin
Seeking help from friends and family is yet another obvious means of raising capital in entrepreneurship. However, to avoid risking personal relationships due to any disputes that may arise, it is recommended to treat this type of funding as a high-interest loan for a year or more.
Banks offer business loans for all types and sizes of business. Women entrepreneurs are mostly offered extra benefits with attractive schemes – make sure you discuss and understand the bank’s rules and policies before committing.
Government Schemes & Subsidies
They provide added advantages designed to empower small business owners, start-ups, and women entrepreneurs. Make sure you are aware of the opportunities available and keep updated on special schemes that could be launched.
Angel Investors or Venture Capitalists
These are a staple to the start-up culture and many successful brands have them to thank for that initial financial backing. For small businesses, it could be family and friends too, or a mentor who is keen to help grow your idea in exchange for a percentage of the net income.
Angel investors could or may not get involved in the day-to-day running of business and decision-making process. Venture Capitalists, on the other hand, are organisations that could have an interest in a promising start-up and they would have a say in the critical decision-making processes. Know your business plan, be transparent, back up your valuations with real projections, and build relations based on trust.
Things to Avoid in Money Matters
Take loans only for the amount you need and check the offers from different banks, so that your repayment in minimal. Start in a small way and slowly increase the budget of your business.