Marica Products (Est. 1987) is the Leading Salon Supplier, Wholesaler and Distributor to the professional hair and beauty industry. Marica offers world class products to customers in South Africa and African countries at unbeatable prices, service and quality. We specialize in supplying professional salon interior with variety of Salon Furniture, Equipment, Consumables, Products and Accessories to the stylists, beautician, salon owners and the public.Financing a beauty salon involves maintaining a positive cash flow against high overhead costs and an income that can be slow or inconsistent- especially in the first few years of business. To improve their cash flow, most beauty salon owners seek outside funding, but soon realize that traditional forms of financing, such as bank loans, are difficult to obtain. The answer to this dilemma for many salon owners has been to seek alternative methods of financing. What are the Overhead Costs to run Beauty Salon? Running a beauty salon involves several major overhead costs:
Success with a beauty salon depends to a large extent on location. Real estate expenses will be one of your highest overhead costs.The success of your beauty salon is also heavily dependent on the talent, ability, and attitude of your employees. As front-line representatives, they are your greatest asset. But the investment you will make in them will also be one of your greatest expenses.This consists of all the beauty supplies and products that you must purchase for your beauty salon. Keeping your inventory well-stocked is essential to smooth operation.From blow dryers and curling irons to tanning beds and hot tubs, a beauty salon must be well-equipped. A Beauty Salon is Considered “High Risk” Financing Banks are reluctant to approve financing for beauty salons because they are considered a “high risk” investment. Not only is much of a beauty salon’s capital tied up in overhead, but the income it generates is generally inconsistent. Like any retail or service business, a successful beauty salon needs time to develop a loyal customer base.
Thus, for the first few years revenue can be very unstable. Moreover, in the beginning when sales are slow or inconsistent, it could easily lead to late or missed payments for loans or any other form of debt. The result is a bad credit rating that can negatively effect the chances of receiving traditional financing in the future. For a new or expanding beauty salon to operate effectively, it needs additional sources of financing. When securing traditional financing is difficult, there are several alternative methods of funding that are suitable to a beauty salon.If you are looking for financing for equipment or supplies, then you may be able to get it from your vendor. Vendors can sometimes play a major role in financing a new or growing business. Just keep in mind that you need to shop around for credible companies, and you can expect to pay a higher interest rate on any financing that you receive.Instead of purchasing all of your salon equipment and furniture, try leasing it.
Through equipment leasing, beauty salon owners can free up their working capital which can then be used to operate and grow their businesses. Get an unsecured business cash advance. A business cash advance is a small business finance method that is based solely on future credit card transactions. The company offering the cash advance will purchase these credit card transactions at a discount and provide your beauty salon with a quick injection of cash. The approval process is generally quick, and the money can be received within a week of approval. Since financing is based on future sales, credit and sales history are usually not considerations. Payments are also based on sales volume. Getting the financing you need to run and grow your beauty salon is possible; you just need to know where to look. For the finest salon equipment and beauty supplies, visit our warehouse in Los Angeles, California. With over one acre of inventory, we can provide the absolute best wholesale and retail prices to our customers.
We have been in the business selling quality beauty products, supplies, and equipment for over 25 years. Don’t trust your company’s image to an inexperienced beauty store, let us put our expertise and talent to work for you. – We will beat any advertised price! We Specialize In Professional Beauty Supplies, Barber Supplies, Spa Supplies, Hair Products, Salon Equipment & Furnishings Beauty Salon, Beauty Supply, Barber Shop, Spa & Store Design New & Used Salon Equipment, Spa Equipment And Barber Equipment Rentals For Movie And Television Production Sets. Catering To The Local & International Entertainment Industry Elegante Beauty Discount Center Warehouse, Store & Showroom 3000 S. Grand Ave. Los Angeles, California 90007Cosmetologists who work as employees on a commission basis keep a percentage of the income they bring into the salon through the services they perform, typically 50% of the total amount. Although as an incentive, some salons will pay their stylists on a sliding scale, with the greater the amount of money brought into the salon by the cosmetologist, the higher the percentage she will be allowed to keep, sometimes 55% or even 60%.
Cosmetologists who are paid on a commission basis are also paid a percentage of the total amount of retail products they sell, usually 10% to 15%. The salon owner provides all the products and supplies used by commissioned employees, including shampoo, conditioner, permanent wave rods, hair color, and towels, and also pays the business expenses. The employee usually supplies her own combs, brushes, shears, blow dryer, curling irons, clippers, and other specialty items. Commissioned salon employees normally work a schedule set by the salon owner or manager, use the supplies (such as shampoo and permanent waves) that the salon owner purchases, and sell the retail product lines that the salon owner chooses to offer for sale. Many salon owners will pay all or part of the fees for continuing education for their employees, and some offer fringe benefits such as vacation and sick pay. Other than keeping an appointment book for their clients, the bookwork necessary for a commissioned stylist is usually not extensive or complicated.
Advertising is also the responsibility of the salon owner, although word of mouth is undeniably the best advertisement of all. Individual hairstylists usually have their own business cards and the responsibility of building their own clientele belongs to them. Many cosmetologists who are self-employed own their own salons, but a growing number of the self-employed lease booth space or a chair from the salon’s owner. In this case, workers provide their own supplies, and are responsible for paying their own taxes and benefits. They usually pay a monthly or weekly fee to the salon owner, who is responsible for utilities and maintenance of the building. Booth rental cosmetologists enjoy greater freedom but also have greater responsibilities than commissioned salon employees. In exchange for their rental payment, they usually receive a vanity, mirror, hydraulic salon chair, and access to shampoo bowls, towels, and chair or “hood” dryers, all provided by the salon owner. The independent contractor must purchase all the products she uses on her clients as well as the retail products she chooses to sell, and like the commissioned employee, she furnishes her own shears, combs, brushes, styling tools and numerous other specialty items as well.
Independent contractors pay their own registration fees for continuing education, and do not receive fringe benefits through the salon. Owners of booth rental salons may or may not advertise their business; independent contractors are often responsible for their own marketing. When it comes to taxes, there is a great deal of difference between an employee and an independent contractor. Independent contractors must also hold a state sales tax license, collect sales tax on their services and retail sales, and periodically send the sales tax collected to the state in which they practice, while commissioned employees don’t have to worry about any of that, as it is all the responsibility of the salon owner. Because they are not employees and federal income tax is not withheld from their pay, independent contractors are required to pay self-employment tax and usually file quarterly estimated income tax payments to the Internal Revenue Service to avoid having to pay their total tax bill at one time.
Because their tax returns are more complicated to file than those of a regular salon employee, independent contractors often enlist the help of a bookkeeper or accountant when tax time arrives. It is important that independent contractors keep accurate business records and receipts of all income and expenses, while salon employees have no need for keeping most of these records, although business expenses such as license fees and equipment may be claimed as a deduction by both employees and independent contractors. Independent contractors are free to set their own schedules, can come and go as they please between clients, and maybe even take a second job or a class. They are able to choose the product lines they want to use and to sell. While all this freedom is very appealing to many cosmetologists, most wait to become independent contractors until after they have a steady clientele built up, because whether or not they have any appointments on their books, they must pay their rent and purchase supplies to stay in business.