Three friends sought to transform a Chelmsford store into one of the best salons in the region. Equipment, however, is expensive in this line of work. Johnson Reed became a crucial partner for alternative finance. Just ask Paul, Sean and Sheema…
Not all business is underpinned by a lifelong dream. Paul, for instance, hatched the idea of Total Tanning and Beauty when he noticed a sunbed proprietor had opened down the street from his home.
He wandered over, spoke to a few of the staff, and began to learn how lucrative such a venture can be. Then it only took a night with friends Sean and Sheema to mention, casually, that they should follow suit, but do it better. A shop became vacant in September 2017. They bought it and got the keys on New Year’s Day.
Set-up costs, of course, are an issue for salons. Paul, Sean and Sheema quickly realised this. For the reception desk, beauty chairs, teeth whitening tools and other parts of the re-fit, the trio would need an extra £100,000 – £40,000 more than they’d prepared for. The sunbeds alone were valued at £44,000 (plus VAT).
Paul heard about Johnson Reed through a recommendation from Cyrano, a sunbed supplier. Not many lenders are willing to fund more than £25,000 for a startup, even though the three directors each had their own successful businesses. To get around this, we found one lender willing to finance £30,000 of the costs, and another to plug the gap. As such, they were able to invest in a pair of standing and lay-down sunbeds.
All of this was approved in a matter of days. During the lead time to delivery, Johnson Reed kept Total Tanning and Beauty updated on their progress with Cyrano. By the end of spring 2018, the salon was ready for launch.
Since opening, the salon has already built a passionate customer base, which means comfortably meeting payments on the lease. In the space of just a few months, the owners have broken even – an impressive feat for a new salon in the highly competitive area of Chelmsford. Paul, Sean and Sheema are now mulling future investments over, as profits climb and the idea of a chain comes knocking…
Sure, we’ve had a couple of chats about more funding, but we’re focusing on this single branch for the next 18 months. If that goes well – reaching 650 customers from our current 380 – then we can expand. But from start to finish, already, Johnson Reed have been fantastic. I couldn’t rate them any better!