Forums: Discussions for entrepreneurs and small business.

Good morning everyone, I am new and hopefully this forum can help me. I feel I am ready to start my business, but every time I go to the bank they, say they are not borrowing at this time.  (Little back round) I am trying to build a 6000sq. ft. Salon,(from the ground up) I have been working on this for just over 2 years and here is what I got so far.

I have my LLC

I have the business name and logo which is trade marked

I have my tax ID

I have purchased the property and still paying on it (I have been paying for 2 yr)

I got it re-zoned business property,  over a 1yr ago

I have drawings , that a builder did for me, and he gave me a price to build.

I have a 1/25 scale model built of the building.

I have had the land surveyed and have those drawings.

I have a 1inch thick business plan.

I have my own website page and domain name.

Credit scores are 803, 817, 821

But I can't get a loan, I am asking for $600,000 that is including the balance of the land loan (85,000) and the equipment as well (10,000) I am will to put up, the business land it is going on, I have another piece of land (that is clear and free, I owe nothing on it 1/2 acre with lake access. Plus I have my home as well to put up, still owe on that but I have equity in it about 20,000 and I have a savings account with only $5,000 to put down, I know it's not alot of money, but remember, I have payed for everything mentioned above!!

Can some one help with Ideas, I am all ears!!!!

What is your experience in the salon business?  What type of market research are you providing?  Are you expanding an existing busines?  Lots of blanks to give you a real answer.

Is it a "Green Building"?  You know there are some rregulations to consider.  I would think.

Jim

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Jim Allen III
SKYPE ID: JAllen3D
New Partners Apply Here How Long Is Your Commute?

Number 1 question, why is the bank refusing to give you a loan.  The loan officer must have told you why the bank won’t lend you the money.  Have you addressed those concerns?

Also, how many other similar type businesses are there in the area you will build in? Maybe the bank feels the market base won’t support your type of business. Restaurants for example have a hard time getting funded if there are to many restaurants in a given area.

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very nice idea i loved it!

very nice idea i loved it!

I’m curious as to why you are building your own facility – is there no suitable retail space for lease in the area?

Of the $600,000 you are looking for, only $10,000 is for the equipment needed to run the business – that’s one of the good things about starting a salon – the low cost of entry. That may be one reason for the banks resistance – you are asking for an amount that is not tied to the hair salon’s revenues but rather to the development of the real estate.

Unless you are in a rural area, I don’t see the need to build a brand new building to run that type of business – there should be some affordable retail space nearby. And if you are in a rural area, you may not be able to do the volume of business required to pay off the loan.

Something else to think about – it well be a lot harder to sell your salon if there is real estate involved. I’ve been helping people sell their salons for over 10 years and I can tell you that most salon owners don’t also want to be real estate investors. (I realize that you are just getting started in your business so selling it is probably not a concern right now, but your exit strategy should be part of your overall plan).

I am not trying to talk you out of your dreams but if you leased some high quality retail space you can get into business much quicker, with less overhead and things like you logo, web site and trade mark will still be viable.

If things take off and you develop a huge customer base and name recognition you can always invest in a new facility down the road. And it your business has been around a few years and has a proven track record it will be much easier to get financing.

http://www.thebizseller.com/hairsalons.htm

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HI,

Im also a newbie in this site..

I found it more informative and interesting...And you will learn more new topics...

Thanks for allowing me to be a part of this forum..

The bankers would have certainly told you for what reason they are not excepting the request for the loan, or either your business would seems to be not that fascinating for them, or else you would have lacked behind in convincing them.

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Is it with the one bank or other banks are too refusing you to give loan. Try out some good private banks and be very specific and clear with the concept and ideas of your business plan, so as they are very much convinced with you.

 

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