Spa owners, like any other business owners, must know how to obtain access to the financial capital needed to position their businesses for growth and ultimately for success and profitability. With unexpected opportunities constantly arising, spa owners do not want to struggle with cash-flow when business is on the rise. Working with a financial provider can be safer, easier and more straightforward. Having a clear financial plan in order to prepare for steady growth is a necessity and requires that owners consider financing options in advance.
How to Secure Access to Needed Capital
Present a solid business plan. Financial providers look for candidates who have a passion for their field, but also for mastery of business and industry principles; they expect candidates for funding to be talented and savvy. When presenting your business plan, make sure to highlight your successes and also acknowledge the challenges of running a business. Position yourself as a problem-solver by demonstrating how you overcame obstacles and how you will tackle future issues. Demonstrate a strong understanding of your cash flow, cost and revenue projections, and expected return on investment. Explain exactly how you will use the capital and show that you understand your market, including local competitors.
Explore all types of financial providers and products. It is imperative to seek the appropriate financial provider for your needs – whether it is a local bank, an individual investor, or an alternative capital provider – and to understand how that provider operates. What documentation is required, and who will review those materials and make decisions? How long will the process take? Vet the financial provider: Is the company financially stable and does it have a positive track record with similar businesses?
Additionally, spa owners should consider what type of financial product is best. A conventional loan may work, or you might prefer a merchant cash advance (MCA), which allows a spa to sell a portion of its future credit and debit card sales to the financial provider. Some providers will allow spas to remit more money on busy days and less on slow days. One advantage of an MCA is that it is quicker to obtain than a conventional bank loan, with funding sometimes available in days. Always make sure to carefully consider the cost over time.
Find a trusted financial provider that understands your industry. An industry-savvy financial provider is invaluable as a partner, advisor and advocate. One that understands the spa industry and market conditions will have a better grasp of your business plan, be a more proactive advisor, and be able to offer advice about the best financial product. Also, remember that your funding relationship manager is your personal advocate and representative, making the case for your business within the financial organization.
Be organized and forthcoming. Trust is important in any financial relationship, and mistakes, sloppiness, or incomplete information can cause a provider to lose confidence in a business. Have all pertinent financial documents in order, and check credit reports for accuracy. Make any corrections in advance of submitting an application. In addition, be truthful and provide complete, accurate information.
If the time and conditions are right, a spa is likely to find a financial provider that is interested in making a capital investment. While taking out a loan or obtaining an MCA is a big decision, spa owners can position themselves properly by doing their research and preparing in advance to present a capital provider with the information they need to say yes.