Start by asking what the current owner is willing to sell it for… you may find out new details about the situation that will help you decide on the value of the current situation like the lease term or if other chairs are being vacated etc. things that you may find less favourable or more favourable.
With salons, the majority of the value is in the assets (chairs/mirrors/Lease hold improvements), current stylists renting chairs, and if the salon is well known, the name brand.
Understanding the monthly costs of rent, insurance, supplies, cleaning as well as what you can rent a chair to a stylists in your market is important to build out a forecasted monthly profit and loss. This will also help you decide if you want to do it, if it’s worth it.
If the salon is currently in a S Corp or LLC you don’t want to buy that legal entity. You would form your own before buying but this is like step 5 or 6.
Get as much info as you can and if you don’t have any background in finance, talk to a CPA to help you roughly establish some idea of value.
Once you know sellers $ and have some idea of profitability and value, you would start a dance of negotiating…
Also, spending on these services is down right now compared to last few years so keep that in mind and understand value is down now compared to anytime over last 5 years.
I am a CPA and my sister in law bough a salon this time last year.
Start by asking what the current owner is willing to sell it for… you may find out new details about the situation that will help you decide on the value of the current situation like the lease term or if other chairs are being vacated etc. things that you may find less favourable or more favourable.
With salons, the majority of the value is in the assets (chairs/mirrors/Lease hold improvements), current stylists renting chairs, and if the salon is well known, the name brand.
Understanding the monthly costs of rent, insurance, supplies, cleaning as well as what you can rent a chair to a stylists in your market is important to build out a forecasted monthly profit and loss. This will also help you decide if you want to do it, if it’s worth it.
If the salon is currently in a S Corp or LLC you don’t want to buy that legal entity. You would form your own before buying but this is like step 5 or 6.
Get as much info as you can and if you don’t have any background in finance, talk to a CPA to help you roughly establish some idea of value.
Once you know sellers $ and have some idea of profitability and value, you would start a dance of negotiating…
Also, spending on these services is down right now compared to last few years so keep that in mind and understand value is down now compared to anytime over last 5 years.
I am a CPA and my sister in law bough a salon this time last year.