Whether you’re looking for a hair salon for sale, or you’re hoping to purchase a full service hair salon as a business investment, there’s a lot to consider. Let’s take a closer look at the details.
What You Will Learn
We’ll go over the basics of what to look for in hair salons for sale, the basic business costs involved when you buy one, and what people looking to sell their hair salons should consider.
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- How To Sell A Hair Salon Quickly?
- How To Value A Hair Salon For Sale?
- How To List Salon For Sale?
- How Much Does It Cost To Sell A Salon?
- How To Find A Hair Salon For Sale?
How To Sell A Hair Salon Quickly?
Hair salons and barber shops are usually small businesses, but a lot of time and effort goes into getting this kind of business established. That’s why it’s equally important to put in the effort (and research) when selling your hair salon business.
You’ll need some expert help for parts of this process, but there’s a lot that you can do to get your business records organized and be ready for the sale.
Let’s take a closer look:
How To Value A Hair Salon For Sale?
There are easy ways to determine the value of most hair salons, but the calculations aren’t straightforward.
Price: A seller should expect to set the salons price at approximately three to six times the cash flow. Of course, a lot depends on factors such as the business location, what the area is like (is it in a busy that’s area developing quickly, or in a quiet, beautiful established neighborhood, for example), and the level of demand.
Valuation: As a seller, it’s in your interest to have an independent valuation done. A third-party agency can give an accurate assessment of a hair salons’ value, and you can present this to anyone looking to buy.
Condition: Make sure that fixtures, chairs and the salons equipment are in good working order and kept clean. You may want to make any small cosmetic repairs to the location at this point- the look of a business can be as important as whether it’s in a great location.
Pro Tip: Keep your salons staff busy in the months before you prepare for the sale. You want the business to be doing as well as possible and look like an attractive opportunity.
Do not miss our post on how to open salon.
How To List Salon For Sale?
There are multiple ways to sell hair salons and barber shops, and you’ll probably want to explore more than one of them.
Newspapers: You can place an ad in your local newspapers to attract potential buyers. You may not want to include the name of the business for sale in the ad to avoid losing clients, but make sure to include the salons details and your contact information.
Word of Mouth: This can be in-person or on social media, including buy and sell pages for your local community or in the sale sections of beauty industry forums.
Brokers: These professionals match sellers with people looking to buy, and can be a good option for anyone looking for someone to help them navigate the process. Some brokers even specialize in small business or salons and barbershops in particular.
We recommend you to check out our post on salon expenses.
How Much Does It Cost To Sell A Salon?
Hair salons and barber shops are not too expensive to sell (because they are usually smaller businesses) but there are still some costs you’ll want to prepare for.
Broker Fees: These professionals usually charge between 5% to 10% of the total sale price for their services, so make sure to shop around before choosing one.
Valuator Fees: A lot depends on the hair salons themselves, and how complex of a report the business owner wants for the sale. A standard valuation can start at about $3000, but this can be more or less depending on the level of detail.
Lawyer Fees: The average lawyer will charge at least $200 per hour for standard services, and you’ll need one to help complete the sale paperwork.
Advertising: This will vary a lot depending on where (and if) you want to place ads to sell your business. Check your local paper’s website for more details.
To learn more about things to consider when creating your strategy plan visit our post on Hair Salon Strategy.
How To Find A Hair Salon For Sale?
People looking to buy hair salons and barber shops have a lot of options. Here are some steps to take to help you find the right opportunity.
Check Online and In Print: Check the business and sales section of your local newspaper- many will contain “Hair Salon for Sale By Owner” ads.
Don’t forget to look in the buy and sell on Facebook and Kijiji. Many business owners will list their salons and barber shops here, along with hair salon equipment for sale, hair salon chairs for sale and other essentials you may want to pick up.
Check Specific Websites: there are purpose-built websites like BizBuySell, BusinessForSale and BizQuest that allow you to search for beauty salons and barber shops for sale by location and filter your results.
Use a Broker: These professionals will help to match you with the kind of established salons you’re looking to buy. Shop around for one in your area or use sales websites like this one to help you find one.
Understand the Costs: Expect to pay anywhere from $40,000 to $250,000 for an existing salon- this number may be higher for beauty salons and barber shops in very in-demand locations., and you’ll still need to pay for things like lawyer fees, licensing and insurance (and buy any additional inventory or hire new staff).
Check Profitability: Of course, you’ll want to buy a shop that’s already making a profit, but you’ll also need to make sure that any salons for sale are likely to stay profitable. You should:
- Ask to see the salons business plan
- Check its cash flow statements
- Research its reputation and read online reviews
- Check out the location and any local competitors
- Ask for an assessment of the business’s assets and any liabilities
- When in doubt, have a business consultant or finance professional give everything a second look before you buy.
Getting ready to sell or buy a salon is a big step, and a little planning will go a long way. Make sure to get to know the local area and understand what the business is worth before proceeding.
Whether you’re getting ready to sell your business, hunting for a mobile hair salon for sale or looking to acquire the first of many locations, it’s always best to be prepared.
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