Any clued up hair salon owners out there?

[bunty197]

I’ve just found out there is a local hair dressing salon for sale in the town next to mine and I’m interested in taking it on. I studied business BTEC at college and passed with a distinction so I have a few ideas about business but no experience, I’ve worked in sales and secretarial work since leaving college. I have no savings as such but I was planning to borrow a deposit if necessary from my parents and get the rest of the cash from a business loan. I’ve got a business plan template from the HSBC website which I need to start filling out and I’ve got very basic details from the estate agent about the company’s assets and turnover etc. As anyone got experience in starting you own business and could you give me any tips or advice. Are there any good books I should read about starting a business you could recommend?
The things I’ve picked up on that I should worry about so far

Leasehold, 3 years remaining – what happens when this runs out. I’ll need to contact the estate agents and find out about this.
Clientele, if I took over this business I would make it young and modern using brand new products and take on a team of young adventurous stylists BUT the clientele at the moment and the local area is full of oldies wanting their regular blue rinse. I don’t know how well the change will go with the locals.
If anyone has got any advice or opinions please let me know. I know it’s being a bit adventurous but everyone has got to start somewhere. There is no point going through life thinking you can’t do something and “what if”. At least if I try and fail at least I know I tried.
Thanks

 

[persianista]

Lets get this straight, you want to buy a traditional hairdressers, paying for the clientele, then add in some young hairdressers and products, and turn it into a funkier salon?
1. will you alienate the clients that you paid for
2 Have you got a couple of good young hairdressers ready? (we are all fighting over good stylists) and will they work in a traditional salon to turn it around?
3 have you had salon experience?
4 would you find it easier to fit out an empty shop to have a contemporary salon?

 

[StudioTracker]

Hi, if your salon is located in an older community a young trendy establishment probably isnt going to allow you to cash in on your readily available market. It might be better to strike a balance between traditional and modern to not alienate the existing client base in your area because these clients will still bring in valuable revenue and would be a good place to start attracting your readily available market, you could then strategize your marketing efforts to bring in newer clients.
Hope this is helpful advice!

 

[bunty197]

Thank you so much for all your comments, I really appreciate all your help.

I have not spoken to the current owners of this business just yet because I want to come across as knowing what I’m doing first and I don’t want to look stupid or naïve.

I have asked the estate agent for information but what they gave me so pretty useless and general. No facts! From ringing up the salon as a potential customer and searching on the internet I think the current owners have purchased and opened up a new salon in the neighbouring town which is bigger, trendier, and full of young people. I guess the want to expand there business and ditch this salon I’m interested in. They will be my competition if I did go ahead.

They don’t even have a good website for this salon which I believe is essential in this day and age, I would put in place a customer database and mail shot the customer every month with promotions, deals, events etc. The current owners do none of this. I am really keen on business so if I did do a hairdressing course I would be very bored and I don’t think I’d do so well at it. I’m not good at art or being creative it that way. I’m better in front of a computer thinking up promotions, planning events, setting up loyalty schemes, generating sales and bring in new customers.

A lot of comments about the “blue rinse brigade” I see now I would need to accommodate the older clientele as well as trying to attract new trendy youngsters. My idea that this salon is full of older people is purely based on my opinions of the local area. I do not know this for fact. If I compromise here and do a bit of both to see how each work out, I can evaluate the situation further down the line and decide which is bring in the most business.

I’m really interested in the “rent a chair” idea, I know a lot of friends who are beauty therapists or nail technicians that work inside salons. By doing this I’m not just limited to hair, I can branch out to all different avenues. Thank you for opening my eye to this concept.

The salon comes with existing equipment and has a fairly modern look it. The shop front is modern and appealing to passing potential customers. I don’t think it will need much renovating. I do think the existing owner’s use of shop space is pretty poor. I would fill up a lot of the gaps with more work stations.

I would be very interested to do a weeks or two work in the salon with the existing owners to see how the business is run on a day to day basis and get to know more about the customers and staff. I’m not afraid to get my hands dirty and if the floor needs sweeping I would be happy to do it! This business would be my main concern and I would be prepared to do whatever it takes to get the place going and become a success.

I think the next step would be to put together a list of questions and ask the estate agent to pass this on to the current owners (sellers of the salon). So far the questions I had in mind were as follows;

1) Accurate stock records and an evaluation of how much the stock is worth.
2) How many staff, their salary, temporary or permanent, do the staff plan to stay with the salon or move on.
3) Business turnover not just an estimate and expenses.
4) Copy of cash flow and balance sheets for the past three years.
5) Copy of VAT returns
6) Any outstanding debt
7) Has there been any significant turnover of employees – if so why?
8) Customer relations – are they loyal, will they be taking the customers with them to the new salon?
9) Is there already a manager in place – will he or she be staying on in this position?
10) Company overheads

Is there anything I’ve missed out?

Anymore comments negivative or postion are all welcome. Thanks once again!

 

[persianista]

The only thing you have missed out, with the risk of sounding negative, is that you have no idea about the trade. Successful salon owners are generally hair pros who understand the business inside out. I have seen hairdressers run rings round an inexperienced boss before.
That said, I know a few non hairdressers who have salons.

 

[-sophisticutz-]

The only thing you have missed out, with the risk of sounding negative, is that you have no idea about the trade. Successful salon owners are generally hair pros who understand the business inside out. I have seen hairdressers run rings round an inexperienced boss before.
That said, I know a few non hairdressers who have salons.

I have to agree with this. Also when just having the one salon, unless you are on the floor yourself kiss goodbye to any wages. When you start from the bottom up you need to be on the floor yourself, as a stylist, no other stylist will work as hard as you. Running a salon as a non-productive manager comes later on, if ever. You'll never be rich in hairdressing I'm afraid
I'm sure Persianista will correct me if I am wrong but she has a chain of shops and still works on the floor.

You seem to be very clued up in business and I am sure you will do well.

 

[persianista]

yes I have a chain of salons, And I still work as a stylist. When people go sick, or on holiday I would struggle if I couldn't step in.
I work full time on my own clientelle. Being a hairdresser myself also gives the staff confidence that I can help them at an expert level plus I know every aspect of the industry. They cannot lie, flannel, or try and bamboozle me

 

[Helen Geerie]

I own a very busy hair and beuaty salon and i am also looking to take on a new business venture too. I think before you look at anything please find yourself a good accountant and engage him or her to look at the accounts for the last 3 years. Anyone selling a going concern will have this ready and be expecting to have to produce it to potential buyers. Also get this accountant to put his price on the good will you are buying (the cleint base). Stock is easy, there so many shampoos at X amount etc, if someone is selling good will (the cleint base) then that's all it is.

Then once you have established this your next question is what is the current owner going to do next and the people that work there. If they are planning to set up elsewhere then that good will is not worth anything! They will take it with them.

This is the first two big hurdles, it will cost you money but you can't go into business without an investment, you may have to do this 3 or 4 times before you find the right business. Once you have established exactly what you are buying for the right amount of money then you can put your business plan together. To get money out of banks is very difficult in this climate, where else can you go? I personally think that if a salon owner is selling up then there's a reason, good successful salons are very hard to come by as either the owners keep them or an employee or self employed person normally takes them on, that's what i did. Keep your eyes peeled and make a trip there at all times of the day on different days to establish the type of client base, busy days etc just sit outside in your car and watch. Look at your immediate competition, go get your hair cut there without identifying yourself and listen to what the staff are saying.

 

[persianista]

salon owners do get sick of salon ownership, even without a specific reason! I would happily sell my salons if the price was right!
In this climate, a salon is unlikely to sell for it's true worth, so we carry on.
I agree that banks are not funding business purchase at the moment. It has pretty much always been that way. My bank has never funded salon purchases, I had to buy mine with my own cash. At best they asked for 50% deposit (thats with a very successful track record as a salon owner)