When patrons visit a salon or barbershop, they expect quality service, not broken equipment or lackluster interiors. If the establishment is not up to standards, customers will likely move on to competitors. Because of the costs of updating a salon or barber shop, many business owners look to merchant cash advances.
What Is A Merchant Cash Advance?
A merchant cash advance (MCA) is not a loan but the purchase and sale of future receivables in exchange for upfront cash. An MCA might be the right financing option if your establishment frequently accepts credit card payments. You will receive a lump sum from the MCA provider and then remit a percentage of your business’s daily credit card transactions.
How An MCA Can Improve Your Salon or Barbershop
Staying with your current offerings is tempting, but you may lose business to a trendier, more up-to-date establishment. An MCA allows you to:
Replace Outdated Equipment
As a hair-dressing professional, you know that worn equipment is a turn-off. No one wants grungy manicure equipment, dull buzzers, or hair dryers that barely work. The tools and equipment you use to serve customers must be top-notch. A merchant cash advance can help to purchase or lease new tools if your equipment is outdated.
Give Your Establishment a Makeover
Owning a salon or barbershop is primarily about customer makeovers. But you should also periodically give your premises a makeover by:
- Purchasing new chairs, cabinets, and mirrors
- Updating existing decorations
- Replacing peeling wallpaper
- Redoing the color scheme
Using the funds from a merchant cash advance to give your store a makeover will attract additional customers as you enjoy working in an elegant space.
Overhaul Your Marketing Plan
An MCA will provide you with working capital to invest in a comprehensive marketing plan that includes:
- Updating your website with a new design and an online store where you can sell beauty and hair care products
- Posting social media content on Twitter, Facebook, Instagram, Tik Tok, and other channels
- Placing ads in local newspapers and trade journals
- Distributing and posting eye-catching fliers in populated areas
You need to get the word out about your salon’s or barbershop’s services to attract new patrons.
Build Your Team
Every successful small business needs motivated workers. If you’re short-staffed, avoid driving your current employees away by overworking them. Using an MCA to hire new associates will help improve your customer service and alleviate stress.
Offer More Services
You can’t expect patrons to frequent your establishment if your services are limited. Basic manicures, pedicures, and haircuts won’t cut it for long. Patrons want plenty of options to choose from, such as facials, quick massages, waxing, and gray blending. You can use a merchant cash advance to add more services.
Expand Your Space
Social distancing may be fading in our rear-view mirror, but patrons will not be comfortable if your space is cramped. With a merchant cash advance, you can expand your space to serve more customers and, therefore, increase sales.
A merchant cash advance will give you access to additional cash flow if your salon or barbershop faces unexpected expenses, Suppose a dryer suddenly breaks or you need to pay for a large inventory order. An MCA will allow you to afford these expenses without cutting other costs.
What Are The Risks Of A Merchant Cash Advance?
A merchant cash advance can help you grow your salon or barbershop, but there are risks. If you experience a downturn in business, you may not have enough sales to pay back the advance. This will place your business and personal assets at risk.
MCA agreements typically include a confession of judgment whereby you acknowledge liability for the advance and waive any legal defenses. This allows the funder to quickly obtain a court judgment and levy your business assets if you cannot repay the advance. Moreover, the MCA provider may require you to sign a personal guarantee, which means they can seize your home, car, and bank accounts in the event of default.
But there is a way out. A properly structured MCA agreement will include a reconciliation clause requiring the funder to restructure the repayment plan if your salon or barbershop experiences a receivables shortfall. That’s where ReconcileMyMCA.com comes in.
Our debt relief specialists provide merchant cash advance assistance to small businesses around the country. If you are struggling under the terms of an MCA agreement, we will negotiate a new payment plan with the funder and protect the beauty or hair establishment you’ve worked so hard to build.
Contact ReconcileMyMCA.com Today
A merchant cash advance provides hair salon and barbershop owners with working capital to achieve their goals. But the business may be forced to close if it cannot repay the advance. Whether you are considering financing options for your establishment or at risk of defaulting on a merchant cash advance, our debt relief specialists can help. Contact us today by completing the convenient intake form.