Buying a Salon? Part Two

Snugglepuss

More on what to look at when buying or renting a salon

Do you want to buy/rent a going concern?

You have found the ideal place for your business. Prime location, busy high street near public transport stops and also with a huge car park just over the road with the added bonus of a pelican crossing just a few feet away from your shop front door. The problem? It is a going concern. So you need to be thinking straight away “Why are the owners selling?”

It may be a genuine reason why they are selling up such as retirement, ill health, moving to another country. Whatever the reason, make sure you ask plenty of questions. For example, they may have heard that a new Super Salon is to be built just down the road with all the top names in the nail and beauty industry working there. Sometimes if the high street is to become a one way system or a pedestrian only centre, this can impact on trade, as it will discourage some traffic into the area.

Perhaps the current owner didn’t put 110% into the business – was it poor performance, couldn’t be bothered with the effort, under staffing, over staffing, under stocking, over stocking, poor choice of stock! Whatever the reason, if possible watch the Salon owner working and definitely go through his accounts with a fine tooth comb.

Other points to consider are things like the fixture and fittings, are they included, are they to your liking? If not how much will it cost you to refit the shop? If you are going to rent, how long has the lease got left to run? Is it renewable? And if so what are those terms?

Another point to think about, is there a client list which can be bought (sometimes called a goodwill payment). Is it worth it? If the business is not performing very well, you wouldn’t want to pay a huge amount and even if it is successful, there are no guarantees that those clients will stay with you.

Do you want to start a new business?

If the premises you are going to use is a completely new build then you you will have to think about all the above, including location etc. However, if it is an empty salon, then again find out why the previous owner sold the business and if it was a used for something other than a nail or beauty salon, then you will have to clear any change with the local council’s planning office. If you decide that you would like to carry out any structural changes, then you also need to submit plans to the planning office, just as you would when adding an extension to a private house.

It is also advisable to contact your local fire safety officer who will advise you of safety aspects for yourself and clients. He will also want to know about the type of chemicals that are used and of course, this is one reason why it is a good idea to have all your MSDS to hand.

What to stock?

At this point you will be really excited, you will have acquired a fantastic salon with a huge window to the world outside. It is fitted out perfectly and now you are eager to stock up on all those lotions and potions, which are going to transform your clients nails and looks no end.

Before, you starting filling that basket, look back at the market research you will have carried out right at the beginning of your journey. What will your potential/current clients want and need? This is an area where you could potentially lose a lot of money with stock that is just sat on your shelves and displays. Any stock that is not used regularly or sold is dead money, it is cash tied up or lost. You should aim for a rapid turnover if possible and try and only buy the products you know the clients want and which you use on a regular basis. Use your common sense and if you have already some experience of working in a salon you hopefully have a reasonable idea of the stock you will need to carry.

You will need to keep proper records of your stock and keep a constant check on what is sold or used in the salon. If possible keep a log on a computer and this will also show which items are most profitable or in demand.

As we all know there can be unforeseen circumstances that impact on our lives. It maybe that your suppliers may not be able to fulfill your order in time and there fore it is imperative that you always have backup stock to carry you over that uncertain period.

Another point to bear in mind is, the way in which you store your stock. You do not want it to deteriorate or for it to end up with that grubby shopworn look. Stock which has failed to sell or is last season can be marked down in price. Don’t wait for the standard sale times, put them on sale at any time, remember, the money you gain from the sale of these items is far better in your pocket even if it only makes a small profit.

If it has been opened and partly used only a few times and isn’t going to be used again, then it is better to get rid of it, in the proper manner. Not only does it look unsightly, but it takes up space and creates a bad impression if it can be seen by the client.

How you will display your stock etc.

Following on nicely from the sale of stock is how to display your stock and premises. Obviously, if you are carrying out a treatment that requires privacy, then it goes without saying that you will require a room out of sight of other clients and the general public. For the front of the salon, it is best to have a window and a display that distinguishes you from other salons. It is vital, as the visual side has a lot to do with attracting clients. It wants to be bright and fresh, not cluttered, well lit and as eye catching as possible.

If you are refitting your salon, then it is best not to cut costs on the standard and quality of your salon fitting as they will have to last some time and fitting your salon out with inferior fittings could prove costly later.
For your retail stock it is best for them to be clearly marked. You will find that clients will prefer to see the prices rather than have to ask about the cost which in turn can make some people feel uncomfortable.

Method of payment.

Of course, before you can do any of the above, you have to consider how you are going to fund your dream. There are grants available to some, however, you will have to meet certain criteria to qualify for any monies. As, each company will have their own requirements, I will leave you to research that area for yourselves.

Obviously, there are other ways to start up a business. Such as applying to the bank, investing your own money, creating a partnership, getting some one to invest in your salon. Each one will need careful thought and investigation before deciding which path to take and of course you will have other things to take into account such as solicitors fees and later accountant fees.

Furthermore, you will have to consider ongoing costs and also the way in which you accept payment from your clients. We are no longer a cash society and many of your clients will want to pay by plastic!

More on money and other points coming in part 3