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Old 8th August 2008, 09:19 PM   #11 (permalink)
sunsally
Leasing VP
 
Join Date: Jan 2005
Location: Ohio
Posts: 1,926
Default Re: Need Additional Capital

I cannot stress this enough.................

BEFORE you open your salon - before you sign a property lease, before you buy equipment....

Make SURE you have enough money!!!!!!

ANY new business generally takes 1-2 years to really "hit the mark" and be profitable. SOME are faster - but assume the worst case and that yours will not be.

ANY tanning business generally is seasonal. SOME are not - but generally only after time or with superior salesmenship and a membership based pricing strategy. Assume the worst case and that YOURS will be seasonal.

Assume the build out will take longer and cost more than even the WORST you can imagine.

Assume it takes more advertising than you think.

I advise 6-12 months in working capital put aside. That means if your average monthly costs are 10K, you need 60-120K just laying around, waiting for you to tap it.

If they are 15K/mo - plan on more like 90-180K!

Squirrel away EVERY dollar you make in the first year! Don't go out to dinner, don't go out to lunch, don't buy expensive coffee drinks on the way to work everyday.

Do NOT use credit cards as part of your "start up expense". Save these for desparation, I-have-no-place-else-to-turn $$.

I see and hear too many of these kinds of stories over the years (not Highline leasees necessarily - I give them this lecture up front! ).

The bottom line - once you are open - finding sources of additional capital, if you can't show a profit (and if you can, you probably don't need the additional sources) - is darn near impossible.

Good luck - hope you find something.
__________________
Ann Wiggins Noe

Highline Capital
877-422-4100 x 250
anoe@highlinecapital.com
www.highlinecapital.com
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