New beauty/massage business - how to start up a small business?

hazysunshine

Hello,

My wife wants to start up a beauty salon, doing all the treatments herself (i.e. she'll be the only employee). She has agreed with a hair salon to use some unoccupied space they have available on a income-sharing basis. She is qualified and will be covered by public liability insurance. This will be a small business venture, fitting around her part-time studies. She'll want to be able to take card payments for treatments.

I need some help regarding what to actually do to set up a business? Which type of business is best? Sole Trader?

I've read around these forums but the advice differs on a per-business basis (obviously) so I wondered if anyone could help me with the next steps? Possibly anyone who owns/works/is knowledgeable in the beauty industry?

Her personal credit rating may be affected by a few late payments, but there are no CCJ's, defaults, etc... She does NOT need a bank loan or even an overdraft, but DOES need an account capable of accepting card payments - so I need help with this area too.

All help/advice appreciated.

Many thanks

ESKIMO

I don't have any personal experience within the beauty industry (despite my charming and youthful looks *flutters eyelids*) but what you mention does sound familiar, something similar to 'rent a chair'. - Like it says on the tin - so to speak, your wife rents a vacant chair in the salon that is other wise 'unoccupied'. This allows the salon to 'recoup' some of its assets that 'aren't working for them' per say.

ST is defo the way to go. Keeps your costs and overheads as low as poss, avoiding all the 'riff raff' that goes with a Ltd. Co.

I would suggest to your wife to look into the income sharing a little closer. Assuming the salon gets 'busy' dring peak hours, they may want to 'commandeer' your wifes rented chair to fullfill their own bookings. I would also suggest your wife get some sort of agreement in writing, coveing use of salon phone/her own personal mobile, her own private clients, discounts, use of credit card facilities etc.

The FSB (Federation of Small Businesses) can facilitate card transactions http://www.fsb.org.uk/card-processing whereby you rent the terminal per month, however, depending upon your wifes revenue i would suggest the aforementioned. Using the salons card machine and negotiating commission on payments, using their own landline. Easier, cheaper and more cost effective.

I'm sure your wife would be able to come to some sort of amicable solution that would be in everyones best interests..

Good look to you both. Keep posted.

BigAunty

Go to the business link website which is very informative and structured and it will take her through everything - business plan, marketing, finance, company structure, basic accounting.

hazysunshine

ESKIMO wrote: »

I don't have any personal experience within the beauty industry (despite my charming and youthful looks *flutters eyelids*) but what you mention does sound familiar, something similar to 'rent a chair'. - Like it says on the tin - so to speak, your wife rents a vacant chair in the salon that is other wise 'unoccupied'. This allows the salon to 'recoup' some of its assets that 'aren't working for them' per say.

ST is defo the way to go. Keeps your costs and overheads as low as poss, avoiding all the 'riff raff' that goes with a Ltd. Co.

I would suggest to your wife to look into the income sharing a little closer. Assuming the salon gets 'busy' dring peak hours, they may want to 'commandeer' your wifes rented chair to fullfill their own bookings. I would also suggest your wife get some sort of agreement in writing, coveing use of salon phone/her own personal mobile, her own private clients, discounts, use of credit card facilities etc.

The FSB (Federation of Small Businesses) can facilitate card transactions http://www.fsb.org.uk/card-processing whereby you rent the terminal per month, however, depending upon your wifes revenue i would suggest the aforementioned. Using the salons card machine and negotiating commission on payments, using their own landline. Easier, cheaper and more cost effective.

I'm sure your wife would be able to come to some sort of amicable solution that would be in everyones best interests..

Good look to you both. Keep posted.

Hi Eskimo,

Thanks for the reply! It should work out well - it's not a chair she'll be using but a completely unused room so no worries about getting the heave-ho when busy!

The card processing option looks good, and possibly a portable terminal as she can use it elsewhere if she's working outside of the salon.

OK so Sole Trader is the way to go. As per BigAunty's post - Business Link has all the info?

Thanks

hazysunshine

Hello,

OK we're getting a little further with the business plan and now onto financing.

Looking to open a business account and would like a loan to help with the initial costs (small renovation works, decorating, salon equipment, etc)

We have very little of our own money to put into this business (aside from every hour in the day!) so this can only work if a loan is offered.

Would a bank offer this or do they expect that we put x% in ourselves?

Without funding will a bank even entertain us? I see some banks offer loans with an initial 6 month payment holiday, which would be ideal and would allow us to build up custom and bring money into the business.

Thanks

hazysunshine

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Savvy_Sue

hazysunshine wrote: »

Hello,

OK we're getting a little further with the business plan and now onto financing.

Looking to open a business account and would like a loan to help with the initial costs (small renovation works, decorating, salon equipment, etc)

We have very little of our own money to put into this business (aside from every hour in the day!) so this can only work if a loan is offered.

Would a bank offer this or do they expect that we put x% in ourselves?

Without funding will a bank even entertain us? I see some banks offer loans with an initial 6 month payment holiday, which would be ideal and would allow us to build up custom and bring money into the business.

Thanks

With no trading history and no security and nothing behind you, then I'd be astonished if you could get a loan. How much are we talking? Could you do it on a 0% credit card? But do your sums very pessimistically, because business may not be as wonderful as you expect.

Otherwise think about what you could be done without a loan, and save every penny towards making the changes you want to make over time.

doublewhammiesallround

Hi
Do you need the loan to buy the goods etc beauty bed, stock etc?

I set my business up with no money whatsoever and got most of my furniture from car boot sales and eBay until. Could afford to replace it. My tools I already had from my training and I just added as and when I could afford it.

What do you need the loan for?

hazysunshine

Savvy_Sue wrote: »

With no trading history and no security and nothing behind you, then I'd be astonished if you could get a loan. How much are we talking? Could you do it on a 0% credit card? But do your sums very pessimistically, because business may not be as wonderful as you expect.

Otherwise think about what you could be done without a loan, and save every penny towards making the changes you want to make over time.

Hi Savvy Sue, there is security (mortgaged property) but indeed no trading history. How many month's contingency do I need set aside? Is 3-6 OK?

hazysunshine

doublewhammiesallround wrote: »

Hi
Do you need the loan to buy the goods etc beauty bed, stock etc?

I set my business up with no money whatsoever and got most of my furniture from car boot sales and eBay until. Could afford to replace it. My tools I already had from my training and I just added as and when I could afford it.

What do you need the loan for?

Hello, the loan is for some minor renovations to the salon space, the equipment and products, and also 3-6 months of rent.

I hope you don't mind me asking but how is your business doing?

Thanks

doublewhammiesallround

Hi

My business is ticking over nicely.

I can give you a bit of background about how I started.

I started off mobile at first for about 12 months and then decided that mobile wasn't for me and worked from my lounge area, clienta really like the homely feel but then my family circumstances changed and my son moved back home and it wasn't working out. I found a little room in a building which I rented for 8 months it was £25 a week and I had access to a kitchen and toilet and the other two rooms in the building where rented by a physiotherapist and a t-shirt company. The room was painted cream but needed a lick of paint, I decorated the room for £50 and got my paint and shelving from a car boot sale and got a hairdressing hair for £10 from eBay. My clients loved coming but found it difficult to find the location of the building as it was off a main road and had no parking.
After 8 months I returned home as my son moved out and I decided to decorate a small bedroom in my home and use this as a home salon. Again I decorated this on a budget and managed to get flooring and paint from a car boot sale and picked up another chair, mirror and shelf for £100. I informed all my clients that I had moved home again and they followed me and I did not lose any custom. After a tear of being in a small bedroom my client base grew and sometimes my client would bring a friend to sit with them while they had their hair done but the room was too small. I moved into another bedroom in my house and with the money I had made from my clients I spent a. It more n doing the. Infer bedroom up, I bought a few new things from Ikea but again I searched eBay and went to car boot sales.

After working from this room for a few years I decided that it was time to move to a smaller house and wanted to move my business away from my home as I found that clients thought they could have their hair done at anytime of the day and night. I moved home and informed my clients that I would be mobile until I could find somewhere. After a few weeks I panicked as I hated mobile and everything seemed to be taking much longer and had no time to myself, I contacted the landlord of the little room I had in the building previously and he said he would let me have the room again. In one sense I was relieved i had fond smewhere and the building has been recently to a beauty therapist who had turned all the rooms I to beauty rooms so it didn't need any decorating. I asked the landlord would he paint the communal stairwell which he did but nothing else needed doing. Again I went to car boot sales and bought a few things just to make the communal areas more appealing as I was the only business in the building at this time, the other two rooms where empty. I was in this building literally five weeks when a little shop became empty near my home. I enquired and the landlord let me have a look at the property, it's a little shop with a big front window and a toilet to the corner of the room. It was decorated beautifully by the previous tenant who never got her business of the ground. The decor wasn't my colour scheme but I thought I could work with this colour until i could afford to change it. The landlord wanted to lease the shop on a three year lease but. Was apprehensive so I bit the bullet and asked him would he rent it to me for three months to see how it would go. The landlord agreed and I signed a three month tenancy agreement and got the keys.
I used the same chairs, mirrors and shelving from previous to use in the shop and got a few things from my house which I took to the shop, I bought some old picture frames from a car boot sale and painted them in a theme to go with the colour scheme in shop. I decided to ring round businesses to see if I could get a deal for window signage which I manage to get for £95. As soon as the sign went up that's when I started to get loads of enquiries as I had my website address, email and telephone number displayed.
I have managed to get a lot of new clients and my clients have remained loyal to me as they have followed me every time I have moved. They love my little shop and said how lovely it is inside.
Six months have passed now and I took the lease on in October 2011 and I have done some alterations and had the salon decorated to my taste, replaced the furniture, had new flooring put down and it looks fantastic. I paid for this from the money I had made from renting the shop. I did it on a budget as I always do. I am now renting a chair to a hairstylist and it has worked out very well for me.
Some weeks are quiet and others are busy but I am glad that I don't have to repay a loan to anyone as that would worry me. My business is only tiny compared to others but it suits me and I have now ventured into selling products and accessories, I am offering training in my salon and I also sell my products on eBay to make extra income.

I can recommend a guy who set me up with a card machine, he came into my salon as he was in my area, he got me a good deal and he did all the work for me and having a card machine has been a little gem as clients tend to spend more on cards than partng with cash.

If you want the guys details I can give them to you.