| Beauty salons are opened in cities all over the United | | | | a business plan. |
| States every year. Many do not have written business | | | | Proof to Lenders |
| plans, but instead open with the entrepreneur's saved | | | | For a business with less upside potential than others, |
| cash, credit lines, and help from family and friends. | | | | like a small beauty salon, raising money through loans |
| However, to raise your chances of long-term success | | | | may be the way to go. Lenders will want to see your |
| and to launch in the first place, a business plan is a | | | | business plan to be convinced that you will expect |
| must-have for most beauty salon entrepreneurs. Here | | | | steady cash flow and, therefore, be able to make |
| are three reasons to write a business plan for your | | | | regular repayments of the loan principal and interest. |
| beauty salon: | | | | The advantage to the entrepreneur is that he or she |
| Investor Dollars | | | | still owns the entire company and will reap all of the |
| Raising investment capital for your beauty salon | | | | benefits after the loan is repaid when and if the |
| means sharing ownership in the company in exchange | | | | business is sold. |
| for the cash you need to startup and get the business | | | | Trying the Numbers |
| running. The important upside of raising cash through | | | | Creating a business plan presents an opportunity for |
| investment (or equity) capital is that it generally comes | | | | you to try out the numbers, specifically the ongoing |
| without strings attached in the form of specific | | | | costs and revenues that you can project from the |
| payments you have to make, or interest that will be | | | | business, to see if they will create a worthwhile |
| owed to the funders on a regular basis. You may | | | | business for you. Not only must the business become |
| never have to pay a cent back to the investors. | | | | profitable after some time in order to make sense, but |
| However, if you achieve a net profit and wish to | | | | that profit must allow you enough compensation to |
| receive your portion as additional compensation, you | | | | make up for the extreme added risk you take on from |
| will owe investors their portion as well. And if you do | | | | being a small business owner. Everyone will have a |
| sell the company or close down, investors will be | | | | different concept of what that compensation should |
| entitled to their share at that time. In any event, | | | | be and creating financial projections is the best way to |
| professional investors won't be able to easily | | | | decide for yourself. |
| understand the entirety of your salon's concept without | | | | |