Hi, I thought I could use help from other entrepreneurs here. I'm looking to start a chain of barbershops in partnership with one other person and access to upto $550k (over 20 years) "interest-free" business loan. It's obviously not totally interest free, but it cuts out roughly 70% of the interest I would otherwise pay on it. The first store opens Q1 next year in Dubai. The good news is we only need $100k for the first branch (this includes conservative start up costs + 1 year's operations) and we have that without needing to take a loan. Should we borrow the money? The reason I ask is everyone keeps saying to me I should take advantage of the facility as its a huge discount over any other kind of debt I'd have to acquire (possibly for expansion) in the future. What do you think? I could use my own money to pay off my personal loan. The other thing I wanted to ask is if you have any ideas for things you think the barber should have, things you really like, things you really dislike, essentially your opinion about the service offered at barbershops. Your posts would be extremely helpful, thanks!
$100k sounds like a lot for one branch, considering the plethora of barbershops near Bur Dubai charging 15 dirhams ($4). I assume you'll be setting it up in a more upscale area? Marina, JBR?
No other than the fact that I go to the barber twice a week since I was 18. However, my partner has a little bit of experience as a previous part owner of a barbershop and my lead barber is someone I trust he has 5-6 years of experience.
Not quite. More upscale but still casual, probably around Jumeirah. I can't give away much more, but it's a kind of niche barbershop.
Just men, though there may be female store managers. I would like to change that, but I have to listen to what the market wants.
Borrow the money in the name of the incorporated company. if it fails, you dissolve the company and walk away with your savings intact. don't risk your savings if you got someone willing to loan you the money.
It depends on the interest rate. If the cost of borrowing is cheap, it is better to secure additional capital when you don't need it yet. The reason is if you run low on cash, and need the capital later, the cost of borrowing goes up because the risk of lending goes up. The flip side is that you may be paying interest on capital you don't need or getting yourself into debt that you can't get yourself out of.
you don't know anything about the industry, so why do you want to open a barber shop? your lead barber has 5 years experience in what? business? or just cutting someone's hair? what about your barber shop is going to be different than other barber shops? why should someone patron your place instead of the one down the street? not attacking you with these questions. but how you answer them is important.
When you ask, "should we get a loan" - do you already have something solid set up to where you know the bank is going to give you a business loan for this?
