18 Valuable Things They Don't Tell You
1
. Maintain your credit and finances. Commercial spaces are not easy to obtain. You have to show that you are capable of building out the space and have a cash flow once everything is completed. You will be expected to pay broker's fees and rent/security deposits. Have your banks statements, credit report, tax returns, pay stubs, etc on hand. The landlord's calculation to determine if you can afford a space is (commercial rent x48=last full year's salary/income). This means if the commercial rent is $1000 per month then you should have earned at least $48,000 last year.
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2.
Hire an Architect or General Contractor to develop your floor plans. The construction process is easier, when you've identified where your electricity will run, plumbing and stationary vs interchangeable equipment.
3.
Inspect your commercial space thoroughly before signing your lease. Do you have a boiler? Do you have access to the basement? Check for any outstanding utility bills for the location. A prior tenant may have left a bill and you would be responsible for paying it, if you want it transferred to your business name.
4.
Purchase business insurance, including liability and professional
. If you rent out booths, your independent contractors will be expected to maintain insurance as well.
5.
Identify a monetary reserve in case you run out of money. Build out stages can be very costly especially unanticipated expenses. After a while, everything becomes an unanticipated expense!
6.
Hire a general contractor who will outsource the plumbing, electrical and cleanup. Make sure they start their day early and have a regular reporting schedule. Agree on a final price including material and labor. Get everything in writing. No exceptions.
7.
Micromanage every process until your doors open. Do not designate individuals to oversee tasks on your behalf that may affect your business later on.
8.
Identify your service model prior to purchasing equipment. Independent contractors are responsible for 90% of their hardware, while commission employees are provided with most of their supplies (excluding styling tools).
9.
Avoid a cash and carry business if you plan on expanding or obtaining a bank loan in the future. The more you report to the IRS, the better your loan application looks. The banks don't lend to businesses not turning a profit.
10.
Adjust your business plan as things change. Yes you need a business plan! Your plan becomes a living breathing document. Use it as an infinite guide.
11.
Don't hire friends and family. Even though it seems tempting, dealing with a stranger may prove fruitful. If friends and family are around, let them
volunteer to assist with furniture selection and decorating.
12.
Contractors will usually charge additional fees, for things like, removing old decals from windows or mounting a television. Pay the extras, it will cause less of a headache in the long run.
13.
Have a car handy. You will need to pick up and return items very frequently. Don't let your contractor return items if you're not there. If you have purchased excess items, get a store credit. More than likely you will need to purchase future items.
14.
Purchase your styling products in bulk. This is always cheaper.
15.
If you have intention on becoming an exclusive salon, contact the supplier early. Keep in mind that exclusive products have to be purchased in bulk as well, and can cost thousands of dollars for your initial investment.
16.
Hire an Accountant. While it is always a great idea to manage your own finances, you will need a professional to review your numbers to ensure proper reporting.
17.
Invest in a computer system. While some of us are still fond of the archaic process of writing things down on paper, it's simply easier to report data, utilizing a software.
18.
Hire licensed individuals to work in your salon. It might be tempting to hire a fab stylist with a great track record..who simply didn't "get a chance to take the state board" however it will cost you at the end. If an individual improperly performs a service and you are sued, you will be responsible for damages. As a salon owner, you agree to hire licensed and insured individuals when you apply for your Appearance Enhancement License. Don't take a chance!!
Feel free to add to this list by commenting below. If you have any questions, feel free to email info@vanityhairstudionyc.com
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