Buy a beauty salon advice

[LondonEntrep]

I would say probably the latter most of the time. I dare say there is someone out there but you have slim to none chance of finding them.

In the industry everyone capable of running a business has started up on there own mobile or salon.

Just need someone to handle the phone, basic staff management and deal with clients in and out so therapist can move to the next instead being held up at front desk taking payment, re-booking etc.. and then jump in when over booked and assist with treatments.

Handling the books, advertising and all the behind admin stuff which is easier said than done would be handled by me as I currently run two small separate business.

 

[LondonEntrep]

Question for those business savy people here.

Would you evaluate a beauty salon the same as another business or what exceptions and considerations would you take into account for evaluating things.

Other than years profit after expenses, any owed debts, accounts and equipment on hand. Are there anything else that should be considered?

A price may be asked but 50% of the business turnover could be down the owner/therapist that is leaving and a big drop in income is going to be experienced.

 

[Myarka]

Would you evaluate a beauty salon the same as another business or what exceptions and considerations would you take into account for evaluating things.

When buying a business it's essential to do due diligence because you are putting your money at risk. If you are taking on a lease, that's a huge responsibility. Ideally you would do a business plan that if done correctly would tell you if the business is viable or not.

Other than years profit after expenses, any owed debts, accounts and equipment on hand. Are there anything else that should be considered?

You shouldn't take any debts from the business. The books are important, and that's where many acquisitions fall over. As they say the devil is in the detail. Firstly, what is your confidence level that the accounts presented to you are correct? When I bought my salon the equipment was worthless and therefore I didn't pay for it. Is there a building involved? Have you had it surveyed? Is it listed? In a conservation area? How long has the lease left to go? If you are signing a new lease then the business has no value, so don't pay for what you don't get. If you're paying for stock, make sure it's in date, so again don't pay for worthless stock. What is the reputation of the business? I did a lot of asking around to find out what people really thought. I also sat in the café opposite a few times, to see if the number of clients going in supported the books. It was also interesting to see when the staff knocked off.

A price may be asked but 50% of the business turnover could be down the owner/therapist that is leaving and a big drop in income is going to be experienced.

This is the tricky one, but you should see the takings by therapist. I was looking at buying another salon, and when I went through the books I saw that one member of staff accounted for 50% of turnover. I found out that she had moved to a salon up the road. In the end there was no value in that salon, so I didn't buy.

Speak to the landlord, a salon near me has been up for sale for about 4 years, it's now closed. Reason the landlord wasn't going to renew the lease because he wants to redevelop the block.

You have to go through everything with a fine tooth comb, because the sell wants out, and will say anything to get you to buy. Don't believe their reason for selling, either because it might just be that the business is going down the pan.

Sounds cynical I know, but you have to protect yourself and the more work you put into it, the better chance of success.

 

[TheDuchess]

I don't think that a Beauty Business is more difficult than any other business. The problem is that -as with any business- there isn't a business without someone to do the work. You need to be talking to the staff - how do they feel about being sold with the business? What are their plans girls the future? Are they staying? Why aren't they taking over? If they leave when the current owner retires can they set up on their own?

You also need to consider the risk of competition opening on your doorstep. You might be able to take over a business, but are you able to respond to the competition of another salon opening near you? You really need to understand what niche your business occupies and whether you appeal to that sector of the market.

 

[Mobilefone1234]

Hi Charles
As everyone has said do your homework .
My one concern is how are you going to find these amazing beauty therapists , they need to be trade tested insured etc ,but you or your wife do not have any beauty qualifications . I have been in the beauty industry for 30 years , I own a salon and work everyday 10 to 12 hours except Sundays and believe me you have to know the job inside out especially to find the right therapist.
I wish you all the luck