Having a dream of owning your own business and making it come true are two different things, especially if that dream requires capital to get it off the ground. It can also be a struggle to work out how to find the money to take your business to the next level, but we spoke to two women who made it happen in different ways - and asked them for their advice.

HADY WEHNHAM- FORME SPA AND WELLBEING

Hady Wenham is the owner of Forme Spa and Wellbeing with ten spas all over New Zealand. She bought the first one in 2002 using the equity in her home and since then has expanded to create a well-known and well-loved brand.

>> THE SELF FUNDED MODEL

SMALL BEGINNINGS

“I purchased what was then Forme Beauty Therapy in Ponsonby, Auckland” she says. “I had been there as a client and enjoyed it, but I could see Auckland was ready for something a bit cooler when it came to the spa experience, so we pulled the sunbeds out, modernised the look and brand and turned it into something fresh and exciting.”

DECOR ON A SHOESTRING

Hady’s background in advertising helped make Forme a place women wanted to be. “I was lucky because it didn’t cost a lot to buy the first business so the risk wasn’t huge if it didn’t work out,” she says. ”I renovated the entire place on a shoestring budget, painting at night and creating the look and feel I wanted, spending next to nothing.

BIG PLANS

Most of the industry was single site locations but Hady had plans to build a brand where people knew they could go to any one of several branches and know they would get the same great experience. The business went well, mainly because of the advertising drive - something no one else was really putting thought into at that time.

TO THE BANK

Using her house as security, and obtaining a business overdraft she opened another three sites - Parnell in 2003 followed by Takapuna and Remuera in 2004.

EXPANSION

Hady opened in Albany in 2007 and in Christchurch last year. “Albany was an expensive fit out and afterwards I realised we didn’t need to spend that kind of money,” she says. “It’s easy to get caught up and not think about whether something will actually pay for itself in the end. A definite learning curve, that one.”

HADY’S ADVICE FOR ANYONE NEEDING TO FIND CAPITAL TO GROW THEIR BUSINESS:

As much as possible, know your business is going to succeed first. Do the numbers thoroughly and be sure it’s worth putting money into. Of course, nothing is guaranteed, but before you go out looking for investors, applying for loans or putting your house down as security, you need to know there’s a need for your product or service.

Always ensure you have enough cashflow to cover a number of costs hitting at once. Things like GST and Provisional Tax can be unexpected surprises for a small business, so in addition to covering day to day operating costs, wages and PAYE always ensure that you include these in your cashflow forecast.

Have your debt at a comfortable level before you push for further expansion. I could have grown the business faster and taken more risk, but the way I did it meant it was within my comfort zone. There’s an opportunity cost there sometimes in that you could miss the market, but it needs to be something you are comfortable with as everyone has a different level of risk.

Refine the model before you expand and ensure the business can be profitable. It’s all too easy to get caught up in topline sales and all the publicity that a shooting star can get, but make sure this is translating to a profit now - or in the near future - before you expand further.

"I wanted to retain ownership so having investors didn’t appeal to me,” she says. “The amount secured vs the amount of equity didn’t put the house at risk and if everything did go pear-shaped we had enough fixed assets to sell off to cover any liability."