Is your salon successful? Are you ready to take the next step and expand operations? Growing a small business can be daunting, with many questions and road blocks ahead. But if you’re ready to take the dive, start gathering information now as you begin to put an action plan in place. To help you get started, let’s look at four factors to consider.
- Timing is everything
So what makes the time appropriate to invest in growth? Perhaps your business has outgrown its location and needs more space for customer services. Or maybe there are additional products and services that your business can begin selling that require an initial investment. It’s important that the timing of your growth coincides with when your salon is regularly seeing profits, as this will help cover the initial investment needed and the interest rates that follow. It’s also beneficial to take into consideration overall industry revenue. According to a recent beauty salon market research report, profits in the salon industry have increased from 1.9 percent in 2009 to 5.7 percent in 2014, and revenue growth is expected to rise at an average annual rate of 3.2 percent to $58.7 billion by 2019. So if industry data shows that now is the time, what’s next?
- Increasing Your Cash-Flow
Cash is king in any small business, and keeping a positive cash flow is crucial to setting the stage for growth. After paying employees, suppliers, and other business expenses, it can be challenging to find enough working capital to invest in expansion. Many salon owners may first consider using their home as collateral to obtain cash, or borrowing money from family and friends. But there are alternative and safer ways to get funding fast. One option to consider is working with alternative finance companies as these providers specialize in smaller amounts of capital. Alternative finance providers are also known for their speed and efficiency with funding available within days, compared to the traditional banking process that often takes many weeks. However your business chooses to increase its cash-flow, be sure to carefully analyze its cost over time to ensure that it’s the best decision for your small business.
- Get creative with marketing
Once you have a plan in place and money in the bank, your business should consider some creative marketing in order to gain new customers, increase sales and lower any debts you may have from investing. Start with the digital basics: build a visually appealing website that’s searchable, create and maintain social media pages, and list your business on social directories like Yelp. Increasing your online presence will generate more visibility for your business, and as you use these social tools to distribute promotions and other content, you will be interacting directly with current and future customers. On each online page, list a call to action to encourage customers to come in the door. Post a coupon on your website that requires the customer to print it out and come into your salon to use it. It may seem contradictory to offer discounts to build more business, but discounts are good for capturing customers who are on the fence and then transitioning them into long-term clients.
- Keep an eye on the competition
Keep your friends close and your enemies closer. It’s important to analyze what your competitors are doing in your marketplace. Why are customers choosing their services over yours? No need to hire a private detective! Just book an appointment yourself. Check out what services they offer and specific prices for each. Is there a niche service your salon isn’t offering? Does their salon have a better look and ambience? Are they offering wine and snacks for customers? Whatever they may be doing, your salon has the potential to do the same and to do it better.
Now get started!
You can analyze numbers, build business plans and read advice all day, but at some point, you have to put your manicured foot down and get started. While taking out a loan and expanding your business may seem like a big decision, salon owners can position themselves for success by doing their research and preparing for the exciting challenges ahead.
James Mendelsohn is Chief Marketing Officer at CAN Capital, Inc., the largest and most-experienced small business finance specialist providing access to capital. Follow the company on Twitter @CANCapital or Facebook.com/CANCapital.