Thinking of setting up shop, literally? Professional Beauty guest contributor and business expert Rob Chaloner explains your options when it comes to financing your dream.
Australia’s beauty industry has seen modest growth in recent years despite a tough economy, proving that Australians are willing to splurge on a bit of pampering, even when money is tight. If you’re already in the industry, you’ve made a good choice, and if you have plans to open a nail, hair, or beauty salon, now is a smart time to do so. But as we all know, opening up a beauty salon requires much more than a treatment bed and a few bottles of nail polish.
So if you’re like most people, financing that salon dream will be a major concern. Luckily, there are several options when it comes to bringing your beauty business plan to fruition that won’t leave you short-changed.
Equipment rental
Equipment rental involves an agreement between you and a financier, in which the financier buys the equipment on your behalf and rents it back over a fixed period, so it’s ideal for prospective business owners on a budget.
Finance lease
In a finance lease agreement, the financier purchases the equipment on your behalf and you pay them a fixed monthly lease rental for the term of the lease, which may run for a period of months or years, depending on your budget and your business plan. When the lease ends, you can release the equipment, trade it in for something new, return the equipment to the lessor, or make an offer to purchase the goods, making this arrangement an excellent option for businesses wanting to stay on top of the latest cutting edge product developments in their industry.
Chattel mortgage
In a chattel mortgage, the financier advances funds to you to purchase the goods and then you take ownership of those goods (in this case your salon equipment) at the time of purchase. The financier in turn takes a mortgage over the equipment as security for the loan. When the contract is completed, the mortgage is removed, giving you a clear title.
Deciding which option’s right for you
You’ll obviously need to do some more in-depth research before purchasing any business finance product, but one thing is certain; you don’t have to wait to start the beauty-based business of your dreams. With the right financing, you can purchase the equipment you need to get started improving the lives of your customers, and making money, right away. And as with any kind of business financing, you should always talk to your accountant or tax specialist before making any important decisions.
This is a contributor article by Professional Beauty guest contributor and founder and managing director of Stratton, Rob Chaloner.