Purchased a business 3 years ago and vendor poaching clients back

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parkervp

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Nov 24, 2010
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cambs
I was wondering if any one had ever been in the same position as me and what actions did they take and what was the outcome.
Three years ago I bought a dated, ran down salon that was only trading part time.
The salon was in a good location and had only about 50 customers.
However the majority of these were weeklys, had colours and had perms.
There wasnt a huge turnover but it was enough to keep me going whilst I built the business up.
I paid 8 thousand pound for the 'Goodwill' of the business.
The lady had been advertising the business for some time for sale. She was in her 60's and wished to retire.
She had orignially listed the sale for 10-12k
I went in with a lower offer to which she refused.
Two weeks later I received a phone call from her customer saying they had thought about my offer and accepted.
Her brother who resided in America had died of a brain tumour which meant she had to go to her native country Iran for 8 weeks. (which I add I was charged £140 a week rent for the salon and had to pay cleaner £20 per week) The conditions were is that I collected the keys the following day and 'looked' after the business until the transaction went through. Her son was given power of attorney to deal with the transaction.
The vendor asked me to not tell any of her customers that I had purchased the business as she wanted to tell people herself.
So I kept to this promise.
On her return, the sale had already gone through. She came into the salon to take all her equipment and stock that I had put aside for her. She was crying and begging me to pay her money if I could!
Many of the customers who had been booked in for their next appointments failed to show.

She has worked in phases and continues to poach customers.
I have about 78 five star reviews on face book - only 5 star reviews - barr one. Its from her. Its a 1 star review!

She tells the customers that she is now working from home. She tells them their hair is too short, too dark, too light. She says I can't cut hair and that she had to show me how to perm (which is nonsense!) She tells them that I didnt pay what was due to her and I moved all of her stuff and redecorated the salon before I'd even purchased it! God knows what else she is saying to them.
Ive really gone above and beyound for those customers and always done little extras for them to keep them sweet and they have all been very happy.
Shes recently done 'phase 3' of her operation. A chunk of them left in August and shes just done another 4 this month! One actually rang me to tell me! She said she loves me, loves way I do her hair but she fancied a change. She said she had gone to see this woman for a massage as a treat and had her hair cut at the same time. So she wouldnt be attending her next appointment. So I asked her if she was coming and she said no.
I respected her for her honesty.
The majority have just rang and left answer phone messages out of hours to say they would be on holiday on their next appt!!
I know this woman is poisoning people and really seems to be seething with jealously! I'm estimating she has over 25 customers out of the 50. Several customers that remain have informed me that she has approached them yet she claims to them that all the other customers have approached her. She claims her doctor advised she get back into hairdressing. I find this hard to believe.
So, I probably should have sent out a legal letter years ago when she first started doing it.
The contract we had stated no hairdressing within 5 years and 5 miles.
Anyway, I'd really appreciate some advice from maybe someone who has been in a similar situation.
I have rang up a solicitor and been quoted £150 an hour! I think she is banking on it that i wont be able to afford it!!
 
It's a tricky situation.

As there is slander going on you could get a legal letter telling her to cease and desist but not sure how far you can go with it. This is where a solicitor is your best bet.

Regarding the 'within 5 years within 5 miles' these rules are very hard to enforce because it depends if they're deemed reasonable by a court and you'd have to take it all the way to truly knows. If she's working from home and happens to live in that 5 mile radius, then I'm guessing she would be allowed to continue.

The problem with buying a salon where people have been going to the same person for donkey's years is they will follow the owner, not the salon. I always say when you buy a business, don't bank on keeping any clients. It sounds like you've been doing well up until now so I'd focus on just marketing yourself to a new clientele.
 
I am doing well, but I'm so hurt by what she and the the clients have done. I Capped their prices, did little extras like add in olaplex, treatments, lent clients products to try at home. , always did my best. This is about principles now. I just want some sort of revenge on her. I know best sort of revenge would be success. Unfortunately I'm in a small town where people talk. I really want to get it out there what she has done! I think I am reacting emotionally right now lol
 
Unfortunately 'goodwill' doesn't really count for anything when valuing a business whether it be hair, beauty or a grocery store.
You could consult a solicitor but I doubt it will really make much difference in the long run and only cause you a lot of stress.

Ultimately clients can go where they like. Some clients just go where they can get an appointment at very short notice and aren't the loyal type.
It sounds like you have done your best to try to keep the existing clientele but put your energy now into building your own client list.
Take your revenge by becoming really successful!

I've been in beauty since 1989 and I've had clients follow me from one salon to another. Perhaps you've had clients follow you? It's just the way our industry is so don't take it personally.
Try and put this behind you and rise above her little games.
:)
 
I am doing well, but I'm so hurt by what she and the the clients have done. I Capped their prices, did little extras like add in olaplex, treatments, lent clients products to try at home. , always did my best. This is about principles now. I just want some sort of revenge on her. I know best sort of revenge would be success. Unfortunately I'm in a small town where people talk. I really want to get it out there what she has done! I think I am reacting emotionally right now lol

Revenge is not going to work. It WILL backfire in your face, you'll be seen as childish and spiteful. You're best bet is to continue offering great service, do those little extras that make you special and word will get round that no matter what this woman said or did, you rose above it and remained dignified. Don't waste your energy on someone else's issue, concentrate all your energy on making yourself and your business better.

What is the saying??? Anger is like drinking poison and hoping the other person will die - it's pointless.
 
Revenge is not going to work. It WILL backfire in your face, you'll be seen as childish and spiteful. You're best bet is to continue offering great service, do those little extras that make you special and word will get round that no matter what this woman said or did, you rose above it and remained dignified. Don't waste your energy on someone else's issue, concentrate all your energy on making yourself and your business better.

What is the saying??? Anger is like drinking poison and hoping the other person will die - it's pointless.


So true :) I did let it get me down previously but then focused on being more positive and then things improved. It just seems that my success really winds her up to the point where she has to,sabotage things for me. I'd just taken on a full time member of staff and it's really put a lot of stress on me. You're right, I'll let this go and if people want to have crap hair by a well out of touch hairdresser thEn so,be it :) Thankyou for your advice :)
 
Unfortunately 'goodwill' doesn't really count for anything when valuing a business whether it be hair, beauty or a grocery store.
You could consult a solicitor but I doubt it will really make much difference in the long run and only cause you a lot of stress.

Ultimately clients can go where they like. Some clients just go where they can get an appointment at very short notice and aren't the loyal type.
It sounds like you have done your best to try to keep the existing clientele but put your energy now into building your own client list.
Take your revenge by becoming really successful!

I've been in beauty since 1989 and I've had clients follow me from one salon to another. Perhaps you've had clients follow you? It's just the way our industry is so don't take it personally.
Try and put this behind you and rise above her little games.
:)

Yup I understand clients can go,where they like but she really encouraged them to,come back to,her. I hadn't experienced people follow me as I've never been anywhere long enough before I worked for myself. I've only ever had it done to me :( you are right though...I will be successful and she'll hate that :) thanks for your advice :)
 
If she's telling outright lies then I think it might be worth sending her a solicitors letter threatening legal action if she carries on doing it.

Otherwise, focus on building up your new clientele and actively market your services to the types of client who are happy to pay for a high quality service. Focus your energy on each client as an individual and never ever gossip or talk about your own personal issues.

Some clients really don't care and just want a cheap 'do' with all the latest village gossip thrown in for free! Let them all go to her.
 
I might just make a comment which could get me booted off this forum but I wouldn't do business with someone like that or that country it's kind of pathetic that she is behaving like this. Almost scammed you in a way , if she collected her stock and her equipment and you paying the rent what exactly were you buying if you had to renovate the place?
I seen this happen often in many places and I am sorry you had to go through this.
In future only offer price that your accountant would work out , as mentioned goodwill is very much a gamble as clients go to where they are most comfortable.

Good luck
Just set yourself apart and attract new client is your best best at this stage.
 
Almost scammed you in a way , if she collected her stock and her equipment and you paying the rent what exactly were you buying if you had to renovate the place?

Here, many shops are initially let with a fixed term lease e.g. 99years and so the upfront cost includes purchasing the remaining years left on the lease of the salon as well as a monthly rent. When the lease expires, the ownership of the salon will revert back to the building owner unless a new lease is negotiated.

Some businesses will include within the price a value for 'goodwill' (average maintainable earnings) but as you say, never agree to pay for goodwill in a beauty or hair salon business as clients often follow their hairdresser/therapist when they leave.
 

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