Thinking of buying an established salon or have you already made the buy existing salon move? Inheriting an established salon can be a godsend, but it can also come with issues you may not have seen coming.
Salonspa Connection works with both salon buyers and salon industry sellers– it’s safe to say we know the salon business! Get tips on how to nurture your new salon and the team that comes with it to success!
You are about to read the truth- owning salons, spas and barbershops is not easy. This is a people business, and with people come issues.
The goal IS to make it easier when you buy an existing salon by preparing you for what can happen, and how to handle the issues as they come to light.
Before you buy and existing salon, here are 6 things to think through before purchasing this salon’s location. You won’t get these tips from your accountant or business broker- these come from real salon buyer experiences in our Salon Businesses for Sale program.
Can you manage the type of salon you are considering buying? Owning a salon can be amazing, it can also take over your life. Ask the soon to be previous owners about how much time and energy they are spending on the salon, and what they would do differently to lessen the management of the business.
Financial information. Get tax records, ask about debts such as back rent and ask for bank statements and where cash sales & tips go. A messy bank account or accountant can spell trouble for your profit goals. Protect yourself- it’s worth what you pay your accountant and attorney!
Employees or Booth Rental turnover. Unless you are a one person salon, hiring and recruiting salon professionals should be a top consideration point. A salon with a bad reputation with salon pros is hard to overcome. Learn how to hire & recruit hair stylists by studying salon hiring data and with salon recruitment education.
Physical assets. How updated is the salon? Will you need to purchase new furniture and equipment or is the salon ready to profitable? Budgeting in these immediate and future expenses is key to a successful salon business plan.
Digital assets. Salon clientele often come from digital marketing tools like a social media presence or a salon website. Salons without great digital assets can cause a lot more work for new salon owners. Great digital assets should not be overlooked- a lot of time, money and energy go into these resources.
Sustainability. Franchises, fads and niche salon concepts are great finds! However, think through the long term market and services this salon offers. Protect your initial investment by planning for the future if a specialty salon will require ongoing costs to stay relevant.
There is no guarantee on people in the sale of a salon! If a new salon owner will come as a surprise, this can directly impact your established financial plan.
For example, here are situations where surprises about new owners are usually not impactful:
Independent contractors or a booth rental salon. This largely depends on how involved the owner is with the booth renters. The less involved, the better!
Salon suites. Suites tend to have an advantage, as ownership of suites are typically hands off.
Franchise businesses. Since the process and relationship with ownership and employees differs from a traditional salon, salon pros tend to be far less attached to the owner.
85% of independently owned commission salons are owner operated, single location salons. This means employees report and deal directly with the owner or manager. They are often are in that salon because of the owner.
We coach our salon seller clients on our website, to distance themselves from the staff, long before the selling process begins. This helps the business become independent of the relationship between the owner and the people who work in the salon.
Every salon is different, most of the time the team is aware new management will disrupt things in the salon. While this may be the best thing that happens to the business, it places a crack in the sense of community.
It is typical to lose staff in the sale of a salon, if it is not handled correctly. Secondly, stylists have loyal clients that will follow them to a new location, this can be devastating to a business.
Our best advice is to get integrated with the salon team, long before the previous salon owner leaves. While this isn’t possible in every situation, it is a reality in most.
Do not expect stylists to assume you are a better salon owner. Or, that they will believe they will benefit from the sale, unless they are familiar with you and they TRUST you.
Believe it or not, salon ownership can be a lot like parenting. How would you feel if you were suddenly given away to new parents? Same goes for salon staff.
This is especially true for established stylists. The newer salon’s employees have not fully decided on what their career path will be in the business.
When the time comes to introduce your purchase of the space to the salon’s staff, consider a fun, paid outing to break the news. Existing salon, barbershop and spa purchases should be delivered lightly.
Plan on sending a follow up email with a personalized message to everyone’s inbox, with an invitation to privately connect with you.
DON’T make big promises. Instead, offer up ideas on new marketing initiatives, a new equipment purchase (if that is in your plans), and tread lightly.
DO promise you are dedicated to review the existing salon policies and express that you want to improve the space. Encourage the staff to contact you by having an open door policy.
A new owner is not privy to past problems, outside of what the previous salon owner has conveyed. I once worked in a salon that always had laundry room issues.
Employees never stepped in to help, the salon was always dirty and we got so many state board violations, the owner had to hire an attorney! The salon was bought out and the new owner asked for my advice on how to improve morale, and grow the business.
Of course she asked everyone who worked in the business what they thought, (including clients). This was such a great gesture…
A true example of someone purchasing more than a business, this new owner was invested in the people that made a room full of chairs, a salon.
Did you know hiring and finding booth renters is one of the most difficult tasks for salon owners? While we do a great job in assisting with salon recruiting, is is largely up to you to create an environment that will sell.
Yes, you heard me right. You will need to polish your employment or booth rental opportunities to entice salon pros at every stage in your business.
One of the biggest mistakes I see in buying an existing salon, is a lack of understanding in how to get people to work in your salon. It all has to do with the reputation and relationships you nurture- inside and out of your business.
Watch our TikTok on this subject to learn more about reptation & relationships in the salon business.
Community centered businesses often have a great clientele. Data shows, these salons are not all that common.
Be prepared for great marketing by purchasing tools like a website overhaul, or plan events to get your reputation known. Do not underestimate the power of spending money on ads for clients.
This blog is just one of the many resources that are out there, when you buy an existing salon. Salonspa Connection is a non-brand affiliated resource, with a ton of free tricks and ideas found in our blog for salon owners.
We also house a free and comprehensive list of all salon consultants, coaches and mentors to suit ANY salon owner’s needs. Stay in touch with us and see what we do for the salon industry on Facebook or Instagram.
Wishing you the best of luck in all of your future saloning endeavors!