Buying A Hair Salon
Are you thinking about purchasing an already established salon? Existing salons already have stylists, a reputation and a strong clientbase, which makes purchasing one appear to be a great investment. Although it may be a worthwhile business to buy, there are some possible drawbacks and obstacles the purchaser may have to experience. For example, there could be high turnover with a new owner and some salons may be in need of renovations or new salon equipment to stay operational.
buying a hair salon
Professional products that are sold directly from the salon will have a higher concentration of ingredients, meaning they last longer as you use less with better results. The issue with drugstore products is that they may leave your hair in worse condition due to harmful chemicals that strip your scalp of its natural oils and in turn dry out your hair and cause flaking. They can also create buildup on the hair (which can cause even more issues down the road). Professional products are designed to cleanse and nourish your hair and scalp from the inside out and the ingredients used are much, much better.
As a novice in the industry, Tracey leaves the salon's manager of five years "to do the technical stuff". But she has draws on her considerable management experience to streamline other areas of the business.
"The previous owner had been there for about 25-30 years and the majority of the team for about four to six - which is unusual in hairdressing as far as I understand because the turnover's really high due to poor salaries.
She also appointed a solicitor, from the firm Cleggs, with expertise in buying businesses. They were "really helpful", she says, as were the Business Partnership, despite the fact that they represented the seller as well.
"I consider myself to relatively bright, but there are so many real subtleties that if you've not got experience in that field you could really get stuck without a solicitor. Especially for me, because I was not only buying a business, I was entering into a 15-year lease arrangement, which brings other stuff with it.
To obtain the products, companies go to extreme lengths: theft, liquidation, fraud, or breach of distribution contract. In some cases, companies actually solicit salons to buy products and pay a premium (20-30 percent) over salon cost, usually in cash, she explains. They then resell them to drugstores and the like in attempt to offer "brand names" at a lesser quality.
Sadly, we expect to see more salons up for sale in the coming months. It has been an incredibly difficult year for salon owners, and we expect to see more people looking for buyers as we head into the new year.
For example, most salons should be able to quickly determine stock levels, even if they might not be 100% accurate. Once you have an idea of exactly what you are buying, you can start to see the bigger picture.
You should never buy a salon without first looking over the accounts. And if the owner is reluctant or offers an abbreviated set of accounts, this should make you a little wary. The accounts will allow you to see if the salon is really performing as advertised. Obviously, the past year is an anomaly, so look back to 2018 and 2019 to find out how the salon has performed under more usual circumstances.
A financial professional will be able to help you read between the lines of the accounts and spot any potential risks or opportunities. If the salon uses reliable salon software, it should be easy for you to see how many of the customers are new and returning, how much they spend per visit, and how much the salon makes from retail sales.
You should also find out if the existing staff are included. Find out the terms of their employment, and how much revenue they generate. It could be that the staff are the reason that the salon failed, or they could be an excellent and well-bonded team that is ready to hit the ground running under new management.
Is the owner retiring, moving to a new area, or changing professions? The reason for the sale can give you some indication if the salon can be a success under new management. If the salon owner or key staff are moving on to another salon in the local area, you can expect a percentage of the salon customers to go with them.
If the salon has simply run into financial difficulties, work with an accountant to find out what went wrong and why. This will allow you to learn from past mistakes and prevent new management from making the same mistakes twice.
Unless you have a large sum of money available to you, you may need to think about approaching a bank for the funds. In this case, you would also need to factor your loan repayments into your monthly operating costs. Most lenders will ask to see a business plan that outlines your plans for the salon.
The good news is that you will be able to use the existing salon accounts for your application. If you plan to make drastic changes to the way the salon is run, you should reflect your projected earnings in a cash flow forecast. Creating a business plan and cash flow forecast is often one of the best ways to determine if a business is viable.
Amazon Business, brings together hundreds of thousands of sellers in one place to offer everything you may need to setup a new hair salon and features top brands including MorrocanOil, R+Co, amika as well as an assortment of hair tools recommended for professional stylists. In addition, online retailers like Amazon Business provide business owners with access to convenient and time-saving benefits including product reviews and a personalized shopping experience. Based on your search and purchase history, online stores offer recommendations to assist you in finding what you need and can introduce you to new products that may offer a better value.
We also offers a premium shopping experience to licensed professional stylists through the Amazon Professional Beauty Store that provides a curated selection of over ten thousand professional beauty products. The tailored selection available through the Amazon Professional Beauty Store makes it easy for licensed beauty professionals to source the essential supplies they need for their salon or booth space while utilizing business features including free shipping, wholesale pricing and no order minimums. To get started, visit the Amazon Professional Beauty Store to sign up for an Amazon Business account and submit your beauty license!
Hair salon owners should budget somewhere between $3,000 - $8,000 for purchasing, depending on the size of their salon. It is also possible to negotiate better prices when buying in bulk from wholesalers.
With every business model, one must consider their target customers. What is the demographic of people you are trying to serve, and what are their spending habits and preferences? The vibe and atmosphere you create with your salon should match the audience you are trying to serve.
Additionally, franchised salons can leverage increased brand recognition, and also are often able to acquire products at a cheaper rate. So you will need to find unique ways of differentiating your salon from local competitors in order to keep your business sustainable over the long run.
Some owners want to expand the customer base they serve by choosing many brands of different price range and quality. However, be careful not to clutter your salon with an overwhelming amount of hair products. This can cause confusion for your stylists as well as your customers, and excess inventory can cost your business a lot of money in the long run.
Here are some common brands that range from low to high end in price range. Our list includes some well-loved and trusted brands. However, you might also wish to consult with your stylists to find out which hair care products they prefer and are comfortable with.
The German company with a history that dates back to 1850s, the Wella brand has won numerous awards for its hair coloring products. From highlights to balayage to full head dyes, Wella also offers a rather affordable range of hair products for salon owners.
Davines reach into higher price ranged products and is definitely for customers with more luxurious tastes. The Italian-owned company creates designs and products that are both high quality and classic in appearance, great for owners who are trying to brand themselves as a high-end salon.
Distributors are by far the most common source of hair salon products. Most brands sell their products to distributors, the middleman, for salon owners and professionals to purchase from. The most common way to find a local distributor is to ask the brand directly if they have any distributors in your area.
Some things that you can ask yourself when you are looking for the right salon to buy is whether you will be able to find the right staff in the area, whether your customers will be happy to go to that salon, and will it fit into the kind of budget that you have planned for?
Consider the kind of salon that you want to open. There are a lot of businesses that are opening up across Canada that offer a variety of services. Along with haircuts and styling, customers can get other beauty treatments.
Remember that fitting out your salon will cost money. Look closely at what you are getting with the business that you buy because if there are a lot of changes that you need to make, you will need extra capital in order to do that.
Having the right training in this industry can count for a lot. There is nothing quite like experience. Hire experienced stylists to work in your hair salon. Your customers will be expecting a certain kind of standard from the stylists at the salon. So, make sure that your stylists can provide this.
Your stylist has a deep understanding of the hair care products they carry and can answer any questions you may have about the products. They can provide information on the ingredients, how to use the products, and what results you can expect. This can help you make an informed decision about which products are right for you. 041b061a72