pmcnamara

I'm new to the tanning business.. but not new to business. I have run a successful restaurant for 15 years and I'm looking to expand into the space next to mine. I don't know anything really about the tanning business, but I manage people well, have excellent customer skills, know the importance of image and impression, market my business well and have a good reputation in the community. I just want to learn more (this site has been a fountain of good information btw) about the operations side of the tanning industry before sticking my toes in the deep end.

Runnn

Quote:
On 2005-04-25 12:31:00, Neon Beach wrote:
Consultants like stupid people.


I am not sure who this comment was directed at??

Neon Beach

No one in particular, just a general observation.

DWhite6872

I disagree. I do not have a consultant...but I believe in having people smarter than me around me all of the time! If you are secure with yourself you realize asking for help is not a weakness. I think the best business people hire great people that will cover their own weakness. I think if you need help you should ask for it! You are only as strong as your weakest link!

_________________
Any Advice given please consider the size of your market![ This Message was edited by: DWhite6872 on 2005-04-27 18:41 ]

Sol Sister

Ok, I have been reading this board for about 8 months, joined in Dec and have not really posted much... I have corresponded with DWhite (who is a ROCK, BTW!)and keep reading, reading and reading...

I have written my business plan (completely! and it was the BEST to write it myself!)and have recently turned it in to my banker and prospective landlord. The banker has had only a few follow-up questions and points of clarification and I was readily able to provide the answers because I wrote the plan and prepared the financials.

I did check into the tan plan- conceptually it is a wonderful idea, but you will still need to understand how the numbers were compiled and the equations behind the results or you will not be able to answer your banker...

Our loan specialist called us this morning- she has compared our plan to others in her office, numbers/marketing plans and such... she said we were approved for the SBA loan (of course you basically have to sign the deed to your home over to them until your business turns a profit...) and she suggested that our credit is perfect and we can get a much smarter loan with an equity line...

So, I am also wondering, as a small business owner- is it best to pay a higher interest rate (yuck!) to get the relationship with the bank and credit history established, or go with the equity loanand personally loan the money to the business at a more acceptable interest rate? We do have a meeting with our accountant/advisor next week- just curious what others have done and how it worked out for them.

Thanks all.

DWhite6872

First, you have to get the money!
If someone has money for your business to grow then take it!
Once you have the money for your business, you can always payoff any loan or negotiate any interest rate!

If you are underfunded and you do not know how you will make the payments...then this is not a method for you!

Lets assume you have enough money after financing to cover 1 year of lease payments...then I would say go for the lowest interest rate! If you are worried about signing your second child away....welcome to banking and owning your own business!
I know I have signed my life over at least 6 times, plus my teeth, and a child I have not had!

Hopefully someday you are big enough that the banks want you to succeed more than you do !

Runnn

Great thoughts as usual... DWhite6872 & Sol Sister too. I struggle with many of the same issues except with regard to leasing vs. SBA (approved for SBA loan but probably not heading that direction for several reasons). I don't want to use all of my available $$ as a deposit for a loan. I would rather hold on to as much of my available funds as possible to use as Working Capital since I know how critical cashflow can be during the first couple years of business.

DWhite6872

Keep the SBA...and at the same time..secure other financing..go for all of your options, and get creative!
Take the money and get more money, for your bank account and get through the tough times!

BigLeo

I agree with DWhite about at least considering a consultant. Would you do your own income tax return if you had a company? Would you sell your own home without a broker? Why write a business plan on your own when yuo can have a pro do it. I mean a really bright, energetic and knowledgeable person who understand the industry you are in. Personally, I purchased TanPlan, and the financials are a breeze. That's the part that scared me the most. If you want to write it yourself, be my guest, I am too busy for that bs. You might think you know it all, and have a vision about what you want, but having someone advice you, well I find nothing wrong with it. You just might be way off the beaten path and have no idea how ridiculous your idea is. Tanning is just like that. There are a lot of gullible people in this business who think they have all the right answers until Hollywood Tans or Planet Beach comes into town. Let's not forget that the indoor tanning salon industry is saturated and reached maturity and is due for a shakeout. Your business plan may have worked great five years, ago, but not any more. That's my two bits for all you glorified entrepreneurs who are coming into this industry with a huge ego and goal to conquer the salons in your neighborhood.

BigLeo

Wow, I can't believe I said that. I think it was that third glass of vinho.