As an entrepreneur, you understand that in order to get your business off the ground, you need access to funding. But, what many entrepreneurs don’t realize is that there are a number of different options available to them when it comes to securing funding for their businesses – including grants and business loans.
Before Seeking Funding For Your Nail Salon Business
Before obtaining funding for your nail salon business, you’ll need to do some preliminary work. You’ll need to create a business plan and determine how much funding you need.
You should also open a business bank account. This will make it easier to track your expenses and keep your finances separate from your personal assets.
Common Funding Options for Nail Salon Companies
There are numerous business financing and funding options available for a nail salon company. The most common ones are:
Bootstrapping
Bootstrapping a nail salon company is often the best option for new entrepreneurs, as it doesn’t require any outside funding. With this option, you can use your personal savings to cover initial costs such as leasehold improvements, equipment, and inventory.
This option has the advantage of being relatively low-risk since you’re not borrowing money from anyone else. However, it can sometimes be difficult to start and sustain a business without any outside investment.
Debt Financing
Personal Loans from Family & Friends
Another common financing option is loans from family and friends. This can be a good option if you don’t have enough money to cover your start-up costs. However, it’s important to establish a clear repayment schedule and to make payments on time to avoid damaging relationships.
Business Loans from SBA or Local Bank
The Small Business Administration (SBA) offers a variety of loans for nail salon businesses, including start-up loans, new equipment financing, working capital loans, and real estate loans. These loans are issued through local banks, and they come with relatively low-interest rates. There are also traditional bank loans and lines of credit that can be used to fund your nail salon business.
Business Credit Card
A company credit card is a good option for financing nail salon businesses. It allows you to borrow money up to a certain limit, and you can use the card to pay for expenses such as marketing, supplies, and travel.
The advantage of a credit card is that it can help you build your credit history and score as a business. However, you should make sure to pay off your balance each month to avoid accruing interest charges.
Equity Financing
Angel Investors
Angel investors are individuals or groups who invest in early-stage nail salon businesses in exchange for an equity stake in your company. This can be a good option for business owners who want to grow their business quickly, as angel investors can provide financing and mentorship.
However, angel investors often expect a high return on their investment, so you’ll need to be prepared to give up a 10% – 30% share of your nail salon company.
Other Funding Options Such as Grants and Crowdfunding
There are a number of other funding options available for nail salon businesses, including crowdfunding and grants.
Crowdfunding allows you to raise money from individual investors through platforms such as Kickstarter or Indiegogo.
Grants are available from a variety of sources, including the government and private foundations. However, typically grants are only available if they provide a specific purpose and help someone other than your specific nail salon. For example, it might be possible to get a grant for $X to provide nail salon services to X seniors in your community. Getting such a grant would be like getting a check for providing your services. It’s rare to nonexistent for a nail salon to receive a grant (which is essentially a non-payable loan) simply to launch its operations.
Create Your Business Plan
As mentioned above, for many of these options, you will need a solid nail salon business plan to make a strong case to potential investors or lenders. A well-written business plan can help you secure funding and grow your business.
Summary
There are a variety of funding options available for nail salon businesses. The most common ones are loans from family and friends, business loans from the SBA or local bank, equity financing from angel investors, and crowdfunding. To improve your chances of securing funding, create a strong business plan to generate the funding you need.