Financing your idea

Financing the development of your idea can be the hardest challenge that most people starting up in business will face. The most common route to go down is to be in contact with a financial advisor and establish a relationship with your bank so that they can advise you well on taking out a loan or an overdraft. There is also the opportunity to use government grants as they actively seek to encourage entrepreneurs and make support widely available. It is worth bearing in mind that you will probably need different amounts of money at different stages in the development of your business so be careful not to use it all in setting up, as you may find you need to embark on unexpected market research or competitor analysis for example.

As you develop your idea, you may speak to people outside your business interest, therefore openly exposing your idea to others. Once you do this, there is no reason why somebody may not pinch your idea. It is essential therefore that you protect your intellectual property. This can be done in several ways;

• By using a trademark

• Having a copyright

• Patenting your idea

• Using design rights that will protect the appearance of your product

If you have developed a partnership then the idea is likely to have been that of just one person. In this circumstance you should write a contract that determines what, if any, will be the difference of profit to each party.

Essentially, know that you can afford it. Before you start your own business, it is important to assess the start-up costs required and decide if you can physically afford it. The amount of money that you will need to start up a salon varies immensely depending on the type of service you are going to offer, the clientele you wish to target, the quality of your salon, the fixtures and fittings you would like to have, the equipment you will need, the amount of bookings you aim to take, the leasehold agreement you have, the rent you will pay and the opening inventory you will have, to name just a few factors to be considered.

Some of the things that should be considered first	£
Purchase price (or Tenancy, trade fixtures to fittings)
Security deposit
Rent one month - three months in advance
Stock and Decoration and Refit
Professional fees and training costs
Removal costs and sundries
New equipment
Working capital
TOTAL

If you decide that you can meet the necessary start-up costs then it is essential to start to plan effectively. It must be understood that there is more to running a salon than cutting hair, and so it is imperative that you as the owner are educated enough to be able to do things like balance the books, manage supplies, deal with reps, have excellent interpersonal skills, and that is just the start. Simple steps can be taken to ensure that you are a top business owner, as well as a top stylist. For example, go on courses, read books and the most valuable information you will get of all is from talking to people and listening to their experiences. All your employees, and of course yourself, will need to be qualified in hairdressing to NVQ Level 2 at least, which qualifies as a junior stylist.