Even in times of an economic downturn, people like to look their best and even pamper themselves. While they may be more price conscious during those times, their spending continues — so it should be no surprise that the beauty business is booming. According to Salon Builder, the salon and spa service industry is at $35 billion annually — not counting at least $7 billion more from the retail sale of professional beauty products.
According to Franchise Help, haircare is the largest segment of the industry, with skincare coming in a close second. The trends that are driving growth and revenue include organic products and products produced in a sustainable manner, as well as products and services focused on our aging population, babies and young children, and men.
The amount of capital needed to start a salon or spa business will vary depending on the type of services being offered, the salon and spa equipment required, the basic fixtures and administrative equipment required, the opening inventory of products, and deposits for rent and utilities. Ongoing expenses will also vary, but the largest will invariably be payroll, which is typically recommended to be kept within 30 to 35 percent of total revenue. A significant challenge can be retaining staff by being able to compensate them based on skill, experience, overall performance and teamwork without straying too far from that benchmark.
Reasons for Business Loans
There are a number of reasons why a spa or salon owner would consider taking out a business loan. Among the most common are:
- Opening a new branch
- Renovating the salon or spa
- Purchasing new equipment
- Stocking up on beauty supplies
- Hiring more employees
- Sending staff to training sessions, including those that involve learning the latest industry technologies
- Pursuing new marketing strategies, such as specialized campaigns for upcoming holidays
- Evening out cash flow between seasonal peaks in the business
While these are all very appropriate reasons for needing an infusion of cash, many owners may feel stressed at the thought of trying to obtain traditional bank loans — thinking about the time involved to complete an application, the potentially rigid terms and the poor chances of approval without a pristine credit history.
The Alternative Financing Solution
Clear Skies Capital is in the business of helping small businesses like salons and spas overcome the challenges presented by bank financing — offering them options to help them grow and thrive. Why are we the right choice for salon and spa owners? Here are just a few reasons:
- No problem if you have less than perfect credit.
- We offer flexible terms up to 48 months.
- Enjoy a streamlined funding process.
- You can be approved within 24 hours.
- You’ll benefit from excellent customer service.
The bottom line is this: unlike banks, which are often in the business of saying “no,” we’re in the business of saying “yes.” We want to partner with you to support your growth.
The Takeaway
If you own a salon or spa, now is the time to expand or enhance your business to cater to niche markets like seniors, babies and children, and men — as well as the always reliable female demographic. Not having access to capital shouldn’t be an excuse to remain stagnant. CSC has worked with many salons and spas, so we will be delighted to share our expertise while investigating your loan alternatives with you. Why not schedule a free consultation today?