How to Sell Your Salon | A Guide For Salon, Spa and Barber Shop Owners
Find information on how to sell your salon, in this blog post! Grab your accountant, sit back and let’s dive into an article on selling salon businesses!
Sell Salon Guide
Here are the steps you will take to sell your beauty salon:
Get your beauty salon business ready. Find out what you need to do to prepare to sell your salon, here.
Assess what it is you have to sell. Is this an asset sale or do you have a viable business to pass on?
Set a time frame. Allow a minimum of 6 months to sell a salon.
Consult with your accountant and salon selling experts.
Get a free salon valuation, decide on price.
Choose a platform to sell a salon.
List your business for sale and exit salon ownership!
Do I need a business broker to sell my salon?
You do not need a broker to sell a salon, spa or barbershop. Selling a salon industry business is a straightforward process that involves assessing the value of the business, deciding upon a fair selling price, positioning the business to attract the right buyers and reaching ideal buyers.
Once you have found a buyer, you will need legal agreements that can be drawn up by attorneys that are experienced in contract laws. Marketing the business and finding buyers is the most challenging part of selling a salon industry business.
For do it yourself type of owners, there are services to list a salon for sale by owner, that are very effective. Should you choose this route, ensure the listing comes with targeted marketing and ads, specifically to salon industry professionals who are looking to buy salons.
If you would like to explore salon business broker options, request a free consultation to see how we can serve your needs.
Where do you sell a salon business?
You can sell a salon business in a variety of places. The best place to sell salons should be determined by the effort you are willing to put into a sale.
You can sell a salon business through social media, with a salon broker, or list the salon for sale by owner. What needs to be considered is:
1. How much work you want to do, and your role in helping to get the salon sold.
2. If you need to list the salon publicly or privately.
The more involved you are in the sale, the more money you will save.
You can list your salon to be sold and handle everything on your own, work with salon brokerage firms or opt for salon seller consulting & marketing.
The most important things to consider when choosing a platform or company to sell your salon are:
- Who will get the best exposure to salon buyers.
- How much support you need in the salon selling process.
- How much are you willing to spend to get your salon sold.
- Expertise & connectivity within the salon industry.
Salon Owners, Develop an Exit Strategy Before Selling Salons
Salon owners work to grow their own business, manage staff and worry about client retention. Selling your business tends to come with life changes, sometimes before we’ve developed a solid exit strategy.
If you do have an exit strategy in place, you are one step ahead! Understanding who your potential buyer may be is a great start to a salon exit.
Do you see the salon going to a staff member? What about another owner taking over your space for an additional location?
Hairstylists and beauty professionals are looking to become owners, every day. Connecting with the right person is they key to successful salon sales.
Salon buyers come in all shapes and sizes. Think about what are the most appealing aspects of your business and what a buyer is looking for in a salon purchase. Envisioning the exit is half of the process for owners!
How a salon lease affects the sale of your business
A lease with options that is not about to expire, is the best strategy for an exit of business ownership. Even though you may not want a long term lease, locking in the rental price and terms ensures someone can’t come and take over your space and circumvent you in the sale.
If you have a great location and or a salon exclusive agreement with a shopping center, protect your space by signing a longer term lease.
What is a salon exit strategy?
A salon exit strategy is the preparation and plan execution that takes place before the business goes up for sale. Exiting salon ownership means selling the business to a prospective buyer.
Having an exit strategy is not all that common in the hair salon industry. Potential buyers want to see profits if you are selling the “business”, not just an asset sale.
A well developed exit strategy means the salon makes profits that are are near or above a 10% margin. Owners should begin by making the business not solely dependent upon you. When staff is at low risk of leaving with the sale of your salon, this is the most ideal position to be in, as an owner.
Look, we don’t all arrive in this sweet space of selling, and that’s ok! You still probably have a valuable salon for sale in your future.
When you’re done with being a beauty salon owner, you’re done. It’s hard to turn the corner after you have envisioned your future as a former owner. Whether you have your exit strategy mapped out or not, you can sell your beauty salon business! You just need the guidance and exposure for selling salons to the market of potential buyers.
How much should I sell my salon for?
This is the big question! While there is a long list of market variables that contribute to a fair sales price, there are a few guaranteed assets you can include.
Guaranteed value in an asking price are: Buildout, physical assets, online assets, reputation and new client acquisition. To determine the value in these attributes, you will need a salon business valuation.
How much does it cost to sell a salon business?
How much you will spend to sell a salon, spa or barbershop depends on the method and platform you choose to sell. Selling a salon by owner or the DIY method is the most affordable route. This can cost anywhere from $350- $5,000 depending on where you list the business for sale.
Using a salon business seller consultant service starts at $1,000 and can be as much as $8,000. Salon business brokers charge anywhere from 7% up to 30% of the final sales price. Some brokers also collect an upfront marketing fee to list businesses for sale.
Salon Owner Business Valuation
Traditional small business valuations differs from a salon valuation. Taking into account the aforementioned example of a true asset, the beauty biz is a different market.
Working with a salon selling insider who has an investment in the beauty industry, is the best advice when thinking about how to sell your beauty salon. Understand what a hair stylist, buyer or investor deems valuable- contact us today for a free salon seller consultation!
Working with a Salon Business Broker
Someone once told me a business broker is a glorified real estate agent! In my experience, this is true. Selling beauty industry businesses involves marketing. Brokers only work within the confines of their platforms.
Benefits to working with a service like Salonspa Connection are:
We have the clientele! Our typical buyer is a stylist, current owners looking to expand, people who love the beauty services industry & want to get involved and investors seeking their next business venture.
Marketing! Our buyers come through our robust digital marketing efforts. We have the reach, and the audience to suit any owner’s exit strategy.
Innate understanding of the industry. Stylists and people interested in buying salons, spas and barbershops hang out in “our own” spaces. Brokers do not reach the buyers that Salonspa Connection produces, it’s that simple!
Free pricing strategy. Stuck on how to value a salon business? We understand the fair market value for salons and offer free advice & valuations
What is a hair salon business worth?
Your hair salon business is worth what someone is willing to pay for it. We like to think of selling as: create and craft the benefits of the future opportunity- now find the clients with money, who see the value of your hard work.
If you maintain the interior of your business, sell retail products, provide services to regular clients, have a reasonable lease agreement & landlord, have a digital presence and can demonstrate potential profit for a buyer, your brand is valuable.
If your salon is empty, you still may be able to sell it. You may want to sell the furniture, equipment, buildout, brand, remainder of your lease and online presence.
What is YOUR salon worth?
Selling price is the biggest factor to decide upon. Emotional pricing, or overvaluing businesses is common. Undervaluing salons, spas or barber shops also happens with sellers who are uneducated on the value to potential buyers, or are not confident in their business.
If you need an expert salon valuation, this may help to determine what has value and what doesn’t add to a selling price.
Learn how to determine price and set your salon business up for a successful exit,with our 60 minute seminar.
How much do salons sell for?
Salons sell in the range of $3,000,000 to $10,000 and have seen large salon brands fetch over $10M. The average for a salon sale is $250,000. What your salon will sell for is determined by business model, cash flow and your role in the salon.
The less vital you are to day to day salon operations, the higher the value. Salons with effective management, have positive cash flow and are thriving get the most from the sale of the business.
How Sell Salon Online Works
Selling a beauty salon is not like recruiting or selling a house! The process actually combines the principles of both, the key is using the right platform to sell.
We first learn about your business, conduct a valuation and determine a fair sale price. Then, owners choose between or flexible options: salon selling by owner, consulting services or traditional salon business broker packages.
Now it’s time for marketing! The hair, nail and esthetics community lives in certain places online- gaining access to the right buyers in these spaces produces a successful sale.
Selling a Spa or Barber Shop
Our selling service works the same for spas, barber shops and schools! Contact us today about our salon business selling services to see how we can make the years hard work and assets into a successful sale!
This is important, value-adding stuff for Owners
The more assets you have, the more money you will get from the sale of your business. Every little perk for a new owner counts!
If your location is full of potential customers, this adds up to profits! Learn about the value of your salon, spa or barber industry business by working with the experts, Salonspa Connection.
How do salons attract customers?
Marketing efforts for new customer acquisition can be a bit confusing for newer owners. Location has A LOT to do with getting more business.
Google supports small business and makes it easy for clients to find you, based on location. Ensure your Google My Business is properly set up and add services and photos to your profile.
Happy customers like to give referrals! Incentivize customers with free shampoo or hair products to gain more attention. Social media is also a wonderful tool. Ensure your salon website is working to funnel new customers to your appointment booking software.
How can I make my salon popular?
A popular hair salon is a wonderful thing to have! Offering niche services or catering to a specific clientele can help you gain popularity, quickly!
How profitable is owning a salon?
This depends on the model of your salon. Learn the differences between commission, hybrid and booth rental salons in our blog.
Conclusion
I hope you have learned a bit more today about how to sell a salon, spa or barber industry business! We would love to chat with you about selling your business- all consultations are free and we will give you an honest opinion on which is the best route for your situation to get the best results.
All inquiries are handled by yours truly, the leading expert in selling salons, Susan Wos. Make sure to check out our reviews from former owners who we have helped exit salon ownership!
Yours in Service,
Susan Wos
