08-29-2001, 11:13 PM | #1 (permalink) |
Join Date: Jan 26 2001
Posts: 46
Rep Power: 0 | Would appreciate any experience here! Has anyone started their salon & then gone to the bank for working capitol? After much reasearch, we started our salon - it has turned out very nicely but we are in the slow season with no working capitol. Our lease is soon to be renewed but I don't know whether to throw in the towel or hope to get an "unsecured loan" for monthly cash. Have to decide quickly. |
08-30-2001, 07:15 AM | #3 (permalink) |
Join Date: Jan 27 2000 Location: Topeka Kansas Age: 68
Posts: 564
Rep Power: 25 | Truly the most difficult part of opening any business is the first few years of operating cash. You just never have enough. Ideas are plentiful and money is scarce. If you do not have reserves to draw on during the slow time you may be in for trouble. How long have you been open, how much reserve do you have, any way to get more? |
08-30-2001, 08:16 AM | #4 (permalink) |
Join Date: Jul 25 2001
Posts: 15
Rep Power: 0 | Slow season and no working capitol? Banks are not in the business to make large unsecured loans. Banks want collateral worth at least as much, and preferably more than what they are loaning to you. If I were you, I would re-study and work over my business plan, and go to the bank with home/property deed or car pink slip in hand and tell them how much you need, and how you plan on paying it back. But I am pessimistic that this will yield the desired results. However, if you were seriously making money during peak season, and you overspent - or - mis-spent monies, then that's a different story. That's a planning problem. As a business owner, I maintain an "Open Line of Credit" with a moderate interest rate (12-17%) in the just for this very reason - but if you try to open one now - they may be suspect (as I would be) and deny the line. Next to last resort might be to borrow from family, and the absolute last resort would be to sell more stock in the corporation up to the max state allowed and bring in an investor - but you'll need a solid business plan. IE. if you do the last, be careful, make sure you only sell a minority holding in the corporation, not a 50% stake - I've made that mistake. |
08-30-2001, 10:29 AM | #5 (permalink) |
Join Date: Aug 14 2001
Posts: 38
Rep Power: 0 | Dee,After reading US Solar's post, one more thing you can try is to talk to your landlord about deferring part of the rent for 6 months. Tell them come February you will then be able to pay the back rent plus interest.If there is a will, there is a way!--------------------Viper Jon@phiper.fws1.com |
08-30-2001, 03:08 PM | #7 (permalink) |
Join Date: Apr 19 2001
Posts: 2,262
Rep Power: 24 | how much are you willing to risk?your car your house.......it might be time to cut your losses......can the income and interest of the people in your area keep your salon running in the future?If your clients don't have a large disposable income your in deep trouble.Sun tanning is always going to be on the bottom of their needs list! |
08-30-2001, 08:02 PM | #8 (permalink) |
Join Date: Jan 26 2001
Posts: 46
Rep Power: 0 | I've been in business 8 months. We took out a line of credit for electrical, leasehold improvements and working capital. Now it is due and not enough cash is coming in of course. Mar./Apr. was enough to only break-even. (I know - PATHETIC!) The salon is in a nice plaza but not really seen from the road. 3 paid-off vehicles but not worth enough to last very long! The deferred rent sounds good - I might have to look into that because we've done just about everything else. |
08-31-2001, 07:10 AM | #9 (permalink) |
Join Date: Jan 27 2000 Location: Topeka Kansas Age: 68
Posts: 564
Rep Power: 25 | I would take a couple of days and sit back and think this through. You have invested a lot of money in improvements, equipment etc to open and get this far. It may seem like forever but remember that the season will start up in about 4 months or so. That is a heartbeat away. If it is truly a no win deal and you have gone as far as you can than it might very well be time to get out. Get some advice from someone that knows and you trust before you throw it in though. |
08-31-2001, 09:27 AM | #10 (permalink) |
Join Date: Oct 17 2000
Posts: 905
Rep Power: 24 | The first year is the toughest, by far! It is very easy to unnderestimate expenses and over-estimate income. You have put an awful lot of hard work into this to give up now. Like Rich said, think it through and talk to someone close to you to get an opinion. |
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