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Spa Business Plan: Planning for Investment or Loans?
How you write your spa business plan will depend a lot on whether you are using it to seek equity investment in the company or loans which you will pay back over time. While the structure and order of the plan will remain the same, your focus in some areas, and especially the financial section, should be different.
If you are seeking equity investors for your business, you need to show that the company is an investment worth owning, just like a stock or bond. This means that either the shares in the company will pay dividends because of extra cash that the business generates or they will increase in value until a point where they can be sold.
To allow for an equity investor in a small, privately-owned business to sell their shares and realize their growth in value, there generally must be a sale of the company or a second round of funding at which point the business’s value is determined. You should show a plan for how the business can, over time, become a professionally managed spa that another company or a chain would like to purchase.
If you are seeking loans, the ability of the business to operate in the extreme long-term is not as important to funders. Lenders will want to see that the business will achieve a cash-flow positive situation as soon as possible and be able to maintain that profitability in order to pay back the interest and principal. Showing that the team is experienced, the marketing and operations plans are reasonable, and that there is a clear market opportunity for the spa all support what the financials say about how the loan will be repaid. Lenders will also want to know the value of the assets of the company (furniture, equipment, store fixtures, inventory) which they can hold as collateral in case of loan default.
Want more tips? Here's a related article: How to Start a Spa
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