mstnt

I'm curious how people get their $$ for start-up, including build-out and equipment? I mean it's looking like $300k should cover it. Does anybody have that kind of money just sitting around? We certainly don't. I'm thinking an SBA loan for start-up, build-out costs; a lease to cover equipment and equity line of credit (for our 30% of the project that SBA wants us to put in). However, if we do it this way SBA wants to put a 3rd lein on the house. My husband isn't thrilled about this.

clubtan1

Ouch!, $300k in a loan to start a tanning salon is a little risky. Let me suggest you find a way to do some of the build out yourselves. Think about getting some good, used equipment to start and perhaps reduce the number of beds in the beginning. As your cash flow increases, then maybe think about adding more beds. 3rd lien?

cametotalktan

Oh **** that's how it works.

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When I grown up I want to be Angerfant.....

mstnt

Clubtan: 3rd Lien because we have a 1st Mortgage and a home equity line of credit already. We have enough equity in the house to cover it but that takes it all out.

Cametotalktan: I'm not sure what your post is about.

clubtan1

I'm just a little more cautious about putting my house on the line but that's just me. I don't know your total financial situation. In any case, use care. Even if you do a great Business Plan, it's never a sure bet. Best of luck!!

cametotalktan

Your house isn't really on the line. The sba tagged both of my houses and I am confident nothing will happen/ S-Corp. I feel realativly safe I am not going under. And yes I did the line of credit as well Plus put my 30 up in cash for buildouts. You do what you think is right at the moment to get things going.

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When I grown up I want to be Angerfant.....

SunSplash-HI

If you have a really solid business plan and shop it around then there's a pretty good chance a bank will loan you the money (with SBA backing) without requiring a lien on your house. They will, however, almost certainly ask for a personal guarantee, which helps them get to you regardless of your company structure. That means it doesn't matter if you have an S-corp or any other type of company. The bank will reason that they shouldn't take the risk if you aren't willing to.

I agree with clubtan1 though in that $300k sounds like a lot more than you might need to spend to start with. The first few years are rough and so building a super salon is going to mostly be under-used. If you have that much, you might be better off buying an existing salon and upgrading it to your vision. At least the existing salon will already have a customer base.

mstnt

Good info. I'm thinking of starting w/8 beds (3 levels) and a spray tan. I might be able to forego one or maybe even two beds. I want to buy new equipment and all from the same manufacturer to have a consistent look/feel to the place. That's why I though leasing would be better. Part of $ for my BP includes $50K cash for operating. I also may be able to do something different on build-out to save some $$.

Cametotalktan: When you say your house isn't really on the line, how is that? Did they put a lien on it? I'm thinking the way that you're thinking - you do whatever you have to to get going, but my husband may pull the plug on everything if he's not comfortable (and he's not as into this as I am). It's a good thing - we balance each other out. It just means that I've got to look at more options to make it work. We are also going to do an S-corp.

I'm also, trying to get into a new strip mall that they are building-out so that should save money on electrical and HVAC. There is one salon for sale in my town, but I really don't like the location. I think the location that's being built-out has a lot going for it.

honey772kids

We started out slow and started building/adding to our equipment and space...It works out better that way..By doing that it jumpstarted us so much that the banks started begging US for the loan.....

Now we own a 10,000 sq ft. building in a Wonderful location....I am currently using only 2,500 sq ft and leasing out the other spaces to help with overhead...Works great by putting in complimentary business' then we all share customers...

tnannie

What they are saying ^^^ Putting together a good plan is where you need to start. Tweek it over and over, check out the area and do tons of research on everything from average wages in the area to bed styles and prices. I'm just thinking with enough prep, you should be able to get this price down some.