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Salons are essential for a number of reasons, which could explain their regular stream of customers. Now that the world is starting to ease up on its pandemic restrictions, businesses are starting to reopen to welcome these returning patrons.
However, not all salons can enjoy a smooth transition into the new normal. This is why taking out a financing plan can help accelerate the recovery or growth of a beauty establishment. Whether it’s sustaining staff members during the weaker periods or trying to capitalize on this impending boom, here are four ways a salon loan can boost your business.
Immediately cover expenses
One of the most common uses of a business loan for salons is to pay off any immediate expenses–utilities, rent, payroll, and even replenishing inventory. The tradeoff here is that the borrowed amount plus its interest across several months of regular payments is definitely better and a lot more favorable than paying off penalties from late payments of bills, not to mention the missed opportunities that come their way.
If a business owner is uncomfortable making long-term commitments, or borrowing large amounts of money, there are online lending platforms that offer more flexible plans. For example, 1West Finances is an online platform that specializes in financing solutions for small and mid-sized companies. Lenders like these usually offer faster application processes and approval rates.
By taking out a salon loan to meet immediate financing needs, business owners in the beauty industry can ensure that they continue catering to their customers and generating revenue. The only catch is that you should remember taking out a loan as a temporary measure to accelerate growth and that you are looking for your projections to cover the borrowed amount and its interest. Otherwise, it could lead you into a cycle of debt.
Hire additional staff
Entrepreneurs with experience have the ability to see the trend in a market, and the same goes for beauty establishments. However, while the opportunity can be spotted coming from a mile away, the resources can tell an entirely different story. Again, to make sure that the chance doesn’t slip by the owner’s fingers, a salon loan can be used to grow the business even in the middle of its recovery phase.
By boosting the company funds, a business owner now has the option to hire additional staff members and even purchase additional equipment to accommodate your new beautician or hairstylist. With an additional member for your team, there’s another opportunity for more revenue. It essentially increases the salon’s bottom line in terms of revenue and productivity. Another important benefit of hiring additional staff at this time is to prevent overexerting the existing employees. This secures the status quo while opening opportunities for growth.
However, it is important to have a concrete understanding of the details involved in taking loans out for the purpose of hiring new employees. For example, you first have to assess the current state of the business and whether you actually have the capacity to onboard and retain another employee. There is a condition called over-hiring, which could be counterproductive and defeat the purpose of an additional employee in the first place.
Launch a marketing campaign
While most salon owners are taking out loans as a defensive measure to keep the business afloat, salon loans can actually be used to aggressively pursue growth. One way of doing this is by using your salon loan as additional working capital to fund a marketing plan. By marketing your business, you get to extend your current reach and even penetrate new and previously unexplored markets. All of these efforts serve to increase your chances of pulling in new customers to your business.
Here are a few strategies to use your salon loans for marketing purposes:
- Printing posters and flyers. The traditional way of letting people know what you offer even in the digital age. This is particularly useful for businesses located in small towns, and campaigns particularly targeted to the older population. You can print out an updated list of the products and services you offer, or go with flyers that tell people where you’re located.
- Developing a website. A website is a company’s business location in cyberspace. Through this, you can establish a connection with the target market who are digitally savvy and are always on the go. Make sure to develop a website within your means but conveys your objectives.
- Starting social media campaigns. The cheaper alternative to developing and hosting a website, social media campaigns have the potential to reach a large number of people. It can also be customized to target specific locations or age ranges. You can check out Facebook, Instagram, and TikTok to start with.
Generally, taking out a loan for marketing purposes is not encouraged for marketing especially if you can do it within your means. However, it is also important to recognize that not everyone can pull off successful marketing campaigns without the help of professionals. Also, there’s no need to blow an entire loan on marketing, you can use the same loan for other purposes should the funds allow.
Improving the salon
More than the opportunity to hire new employees or pay off immediate expenses, a salon loan can also be used to restore or even improve your place of business. From new hair dryers to shampoo chairs, it might be a good opportunity to show off the new and improved salon especially if you’ve also come from a temporary closure. Consider consulting local shop fitters near me to transform your salon and create a welcoming atmosphere.
Additionally, you can use your loan to invest in health and safety equipment. Aside from getting their hair and nails done, patrons are also becoming keen on their safety. Make sure you don’t fall behind competitors who are already diverting a significant part of their funds to install air purifiers and dividers on the premises or provide their employees with the necessary personal protective equipment (PPE). Not only does it minimize the risks of spreading the disease, but it also increases the confidence of both employees and customers.
Conclusion
To make sure you don’t miss any opportunity as the economy starts reopening, try considering taking out a salon loan to boost your business. When used properly, this can be a temporary financial setback that will accelerate your beauty establishment’s recovery or even growth. Like most entrepreneurial decisions, make sure to do proper research before applying and due diligence when repaying.
