The most important thing when selling your salon is deciding if a public or confidential campaign is right for you.
In most cases we recommend a confidential campaign because in our experience knowing a salon is for sale can be disruptive to your staff, clients and suppliers and your competition may try to take advantage of this.
In our experience, serious buyers actually prefer salons which are advertised confidentially as they can be more confident competitors aren’t trying to poach your best staff and clients after hearing the salon is for sale.
Whilst the process for selling a salon or hairdressing business is similar to selling any business it’s the subtle differences, like knowing your salon inside out, that makes all the difference.
To maximise the chances of a successful sale you need to think clearly about what is for sale, why
someone would buy your salon, and you need to be prepared.
The truth is, that all salons are saleable “at a price” so even if your salon isn’t ideal for you, has some problems or isn’t very profitable, there is still someone who will want to buy your salon so they can try to turn it around.
In fact, there is an old saying that “a good business should always be for sale at the right price”. However, as you would expect, salons that are more profitable, have a high-quality fit-out with a great reputation will usually sell faster, and at a higher price.
If you are selling due to personal reasons and require a quick sale, then the price you set must represent value for a buyer. Buyers may see value in your assets, your lease, location, market position, brand recognition or trading history.
So how do you sell your own salon?
Preparation is one of the major areas we see private sellers get wrong. Remember the 5P’s: Prior Preparation Prevents Poor Performance.
If your goal is getting your salon sold – not just “listed” then good preparation is a must.
This is why having a checklist of what buyers will ask for is so helpful.
Our team has created the definitive checklist for selling your salon privately in 2021 with all you need to know in an easy to tick off format.
Regardless of the reason you are selling, the fastest way to cause a buyer to lose interest in your salon and walk away is not having the information they need available when they request it.
Once you’ve completed the checklist the rest of the process will be a much more straightforward experience.
Having a really well-written ad is imperative, as your ad is what a buyer will read and respond to so understanding what might interest a buyer is critical, remembering this can be done without disclosing the name or location of your salon.
These sentences not only highlight the benefits of your salon, but make the identity almost impossible to guess, whereas with a quick google search you would be able to find the salon on the main street with 8 car parks that has been trading for 12 years.
You can also write about; your staff, business achievements, the type of customers you service, customers loyalty (focus on their loyalty to the salon rather than their loyalty to you as an individual), what sets you apart from your competition and what you have loved about the salon.
Some other benefits you could mention are a growing population nearby, having cheap rent or a great landlord!
It’s also a great idea to talk about the opportunities for growth. Even the best salons have room for improvements, tell the buyer about ways they could grow the salon. This could be as simple as a new website, adding a product range, extending the trading hours or being more proactive with social media.
As the business owner you know the salon back to front much better than the buyer and definitely better than any broker would. So don’t assume they can see the value and opportunity you see – telling them upfront about the opportunities for improvement in your salon helps the buyer see the value and gives them a head start on taking your salon to the next level.
Read more about How to write the perfect ad when selling your business
By collating the information above and writing your advert you are ready to showcase it to a buyer and are well on the way to a successful sale.
The next step is to work out how much should I sell my Salon for?
The short answer is – it depends.
Typically, salons are sold based on either a multiple of the profit they generate for an owner or the value of the assets included in the sale. The quality and value of a fit-out can also play a role in achieving a higher price.
A good rule of thumb is to multiply your net profit (including your wage) by 1 – 2 times, plus the value of the Stock. Usually, the better the systems used in the salon, the better the fit-out and the less you need to work in the salon to have it perform well, the higher the multiple.
If you work in your salon full time and generate a profit of $60,000 p.a. a typical price would be around $60,000 – $90,000 + stock. (1 – 1.5 times)
If your salon is fully run by a manager and generates a profit of $60,000 p.a. a typical price would be around $105,000 – $120,000 + stock. (1.75 – 2 times)
Don’t forget whilst industry rules of thumb are a very handy guide they don’t take into account the specifics of your area, your team or your salon.
If you’d like our team to complete an appraisal for your salon taking into account the specifics of your salon and get advice on how to get the best price – then give us a call on 1300 SELL BIZ (1300 735 524).
Yes – the truth is, that all salons are saleable “at a price” so even if your salon isn’t ideal for you, has some problems or isn’t very profitable, there is still someone who will want to buy your salon so they can try to turn it around.
If fact, there is an old saying that “a good business should always be for sale at the right price”. However, as you would expect, salons that are more profitable, have a high-quality fit-out with a great reputation will usually sell faster, and at a higher price.
No – As the salon owner you know the salon back to front much better than any broker would. With the right tools and access to genuine buyers, selling your salon yourself is no more difficult then selling your own car.
Getting the right marketing exposure for your salon is our speciality, using our platform allows you to post your advert on all the best business for sale websites with one click. Together, our partner sites receive over 500,000 views from active buyers each month.
Your accountant will be able to provide all the financial information a buyer needs, in fact often salon owners simply forward our checklist to their accountant and ask them to provide the suggested financial information.
There are four main differences – Control, Advertising, Price and Exclusivity.
When selling your salon privately you are in full control, you control who gets to look at your salon and your confidential business information, when they get to come and inspect the premise and all aspects of the sale process.
A good broker would advertise your salon the major business for sale websites, but the good news is with Direct Business Hub so can you!
A typical brokerage would charge a listing fee of $2,200 – $5,500 for a salon plus a selling fee calculated as the higher of $15,000 or 7% – 10% of the sale price inclusive of stock.
Most brokers agency agreements contain a provision appointing them as “exclusive agents” this means that even if you sold the salon to your own sister, friend, or employee, you would still be required to pay their commission.
So, by selling your salon via Direct Business Hub you can advertise your salon on the same business for sale websites, retain full control with No exclusivity and pay just $149 a month or a fixed fee of $1,100 with our “list until sold” package. Oh and, we NEVER charge commission!
Yes – we have a premium support package available where you get access to some of Australia’s most experienced and multi award winning business brokers to answer your questions.
Every salon and every salon owner is different, but our team have seen it all and will be there to support you when you need it, throughout the entire process.
Our team can help you to:
✔️ Price your salon
✔️ Decide if a public of confidential campaign is right for you.
✔️ Write an appealing advert to attract buyers.
✔️ Plan for inspections and highlight key benefits of your salon to point out to a buyer.
Perhaps most importantly, our team will be available to answer questions specific to your salon, and your circumstances, throughout the entire sales process so you can achieve the best possible sale.
If you’ve decided to sell your salon then generally it’s worth going through the process quickly and not keep the salon longer than you’d planned. More often than not, holding on will cause you to get tired, lose interest and may ultimately result in less profits, more stress, and because of that – potentially a lower sale price!
It’s also important to remember that there are buyers in the market right now, that might not be in the market in a couple of months’ time, so if you’re thinking about selling, now could be the ideal time to get the selling process underway.
Whilst it might seem counterintuitive, the number of buyers looking to buy a salon has increased because of COVID. Whilst at the same time the number of salons listed for sale has fallen. This has meant more competition from buyers for the salons which are for sale.
If you are ready to sell your business you need a great ad to attract buyers attention.
Check our guide below or compare our listing packages.
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