Selling business?

[Thompson24]

hi guys

I've ran my own successful hair salon now for the past 6 years, however I've received some news that I have to have major surgery on my back and may need to look at options as I'm going to be off work for at least 12mth and have been adviced to give up my career in hair altogether. I was wondering if anyone has sold their salon, and how they went about selling and valuing? I live and work in a small market town so don't really want eeveyone knowing my business?

 

[Tan Eraser]

Generally if you advertise your business for sale online you would just list basic information. The only people that would know the figures in detail would be people who enquire for further info. If you were really keen to keep out nosey locals then I guess you could insist on meeting all interested parties to go over accounts etc. There is also the possibility of making people sign a non disclosure agreement so that things are kept confidential.

I understand why you feel protective over certain things but you'll probably find that the reality is the general public won't have any interest whatsoever. They aren't likely to be browsing business for sale sites.

With regards to valuing your business the main question is whether the business makes a net profit after your own salary has been paid. Personally I would value a one salon business at roughly 3 years net profit plus assets/stock at valuation.

If there is no net profit after your own salary (which isn't unusual) then I would say the business is only worth the cost of the assets/stock at valuation and perhaps a little for goodwill if you expect clients continuing to go to the salon. That is always tricky though as many people go to the hairdresser as opposed to the salon.

That all said there can be many ways to value a business so I would keep an open mind and make sure you think about how much you would be willing to pay for your business.

Good luck with the sale and I hope the surgery goes well too!

Jamie