Buying a hair salon

[SalonSam]

There are 2 hair salons in my neighborhood for sale. Both owner by the same owner and have been in business for 10+ years with stable staff of about 10+ employees in each store etc and making 100k on sales of 1.5 million.

I noted the supplies costs were 12% which is quite a big higher than the industry average of 7%.

is this a good business to purchase from a absentee owner perspective. I dont know much about hair styling, but familiar with running a business. So will keep the existing staff and continue as absentee owner/investor/business marketing person.

Do you guys have any thoughts?

 

[AcidPerm]

Does the current owner actively manage the 2 salons or do they have a full time manager in each salon?

 

[SalonSam]

Does the current owner actively manage the 2 salons or do they have a full time manager in each salon?

Thank you for responding.

There is a manager and assistant manager at each of the salons but owner goes there every night to do books and inventory I am told.

Apparently it can be done remotely with the right technology but the owner is in his late sixties and not comfortable with technology.

 

[SalonSam]

Yelooooooo...

 

[The Geek]

Salons are a service driven, people to people business which IMO makes it seriously tough for an absentee owner to employ others in.

Once a customer finds a professional they trust, they become a customer of the pro, not the salon. This frequently leads to a pro gaining enough popularity whereby they don't need the salon any longer. The pro then seeks out their own place or a booth rent salon (which primarily works when the owner is working in the salon).

Doesn't mean it isn't a good deal or that you cannot make it work. Just pointing out that is can be hard.

Best of luck to you!

 

[SalonSam]

How difficult is it to get good qualified professionals to replace the ones that leave?

This seller has about 12 professionals at each shop.

 

[BannerPenguin]

How difficult is it to get good qualified professionals to replace the ones that leave?

This seller has about 12 professionals at each shop.

Super hard. You can read threads on here how it's one of the biggest industry issues. Some people have been looking for 6-12months+ with no joy.

 

[The Geek]

It largely depends on your area, reputation and package you offer staff. If you pay brilliant and have awesome perks, it may not be a problem at all. But as Penguin said, it is usually very hard.

Perhaps find out how long the current stylists have been there for? What they like, what they dislike? Could put your mind at ease (or not!)

 

[SalonSam]

It largely depends on your area, reputation and package you offer staff. If you pay brilliant and have awesome perks, it may not be a problem at all. But as Penguin said, it is usually very hard.

Perhaps find out how long the current stylists have been there for? What they like, what they dislike? Could put your mind at ease (or not!)

The current staff has been there for 5+ years. Couple has been there for 10+.

Can you give me some idea on what is brilliant pay and perks.. May be couple of different tiers (to die for type compensation and good compensation or average compensation)

 

[The Geek]

Wow. If they have that level of staff retention, then they are already doing it right. Maybe find out what they do now and find a way to incriment the benefit. e.g. If they earn 20% commission on retail, go in at 25%. If they get 23 days holiday - go in with 24 or 25. The marginal increase in benefits buys a lot of goodwill which always gets a little shaky during an ownership change.

Let us know how you progress!

 

[SalonSam]

Wow. If they have that level of staff retention, then they are already doing it right. Maybe find out what they do now and find a way to incriment the benefit. e.g. If they earn 20% commission on retail, go in at 25%. If they get 23 days holiday - go in with 24 or 25. The marginal increase in benefits buys a lot of goodwill which always gets a little shaky during an ownership change.

Let us know how you progress!

Thank you.


1 of the stores does well.
1 of them is bad.

.store A:
700k revenue
14 seats / 12 hair stylists
Profit 85k

Store A has good staff.

store B:
600k revenue
19 seats / 10 hair stylists
Profit 10.k

Shaky staff.

 

[The Geek]

Any insights into the lower staff count in B? Is staff turnover similar to A?

Does the owner currently work in one of the salons? If so, which one?

 

[SalonSam]

No the owner doesn't work at any salon. He only goes therein evening for 15 mins after shop closes to do books.

Owner told me he couldn't get good staff for salon B n he had 3 people quit. He told me it is difficult to get good stylists cz these days they have started working from home for themselves..

 

[AcidPerm]

If you can get hold of them, watch a few episodes of Tabatha’s Salon Takeover. It’s a reality TV showproduced by Bravo and is a US based programme. However, that aside, it might give you more insight into how to run a successful salon and the potential pitfalls to be aware of.
Season 3 episode 2 Christopher Hill, is especially relevant. A young couple with MBA’s decide to invest in a hair salon and can’t underderstand why it’s struggling.

Wow, there’s clearly some serious issues to be tackled with Salon B. I’d be starting with the manager.

 

[SalonSam]

Great thank you for your input AcidPerm

I will check out the tv episode I you d it on YouTube.