What to Consider When Buying a Hair and Beauty Salon
If you’re looking to buy a new business, a hair and beauty salon might be a good fit. Here’s what to consider before going ahead.
If you’re looking to buy a business, the first thing you’ll probably consider is how viable the industry is in the long term. With the UK hair and beauty industry generating £4.6 billion in the year 2020-2021 (and that’s despite a global pandemic), it doesn’t look to be disappearing any time soon.
If buying a hair and beauty salon might be on your agenda, here are a few things to consider first.
1. Is the location right?
When buying a hair or beauty salon, choosing somewhere with the right location is a bit of a Goldilocks situation. If there are no other salons in the area, that might point to a lack of demand, which could hurt your business. If there are too many other salons, the market could be saturated and you might struggle to compete.
When you’re scooping out the salon, it’s a good idea to visit the surrounding area, so you can get a feel for how much footfall you’ll experience. The best location is one near other businesses (but not too many competitors) so that you’ll benefit from organic footfall. It’s also worth considering how convenient the business will be for you to get to.
If you’re unsure of the viability of the business, you can always ask the current owner(s) why they’re selling. If they say footfall is an issue, you might determine that the location isn’t suitable.
2. Terms and conditions
When you’re buying an existing salon, you need to know exactly what you’re getting for your money. Consider, for example, whether any of the existing equipment is included as part of the sale. If so, you could save some serious cash upfront.
It’s equally important to find out whether existing members of staff will be staying with the business or whether you’ll be expected to hire your own team. If the latter, consider the costs of hiring a new team from scratch, as well as the availability of stylists in the surrounding area.
3. Existing accounts
One of the most important things to do in any business purchase is to check the business’s existing accounts. If you’re looking for a challenge and you’re happy to revamp a failing business, fine.
But if you’re in the market for a fully functioning business that’s turning over a profit, you’ll need to have a good look at the business’s accounts to check its financial health and avoid nasty surprises. Look out for existing debts and liabilities, too. If you’d be expected to take these on when you purchase the business, you’ll need to factor those into your ongoing costs.
4. Lease agreements
If you’re buying a rental, you’ll need to know whether the lease is transferrable upon purchase. If that’s the case, find out the terms of the lease and whether they’ll stay the same upon renewal.
Finding out everything there is to know about the lease before negotiating terms is a must. You don’t want to be stuck with payments that you can’t afford. Remember, if you’re not happy with the terms of the lease, try and see if you can negotiate a new one with the landlord, which ties in with the purchase agreement.
5. Management and staff
Some salons are sold without employees, but others come with staff members that are currently working there. If it’s the latter, find out whether the current employees are a help or a hindrance to the success of the salon.
If the stylists come with a loyal customer base of their own, for example, you might decide that’s a benefit to your business. That way, you won’t have to focus as intently on building up your own customer base from scratch.
Buying a hair and beauty salon – your next business move?
One of the perks of buying a hair and beauty salon is that it’s an evergreen business idea. After all, you’re never going to run out of hair to cut!
If you decide to go ahead with this investment, you’ll need to find beauty salons for sale in your area. Keep our considerations in mind, and you’ll discover the right business for your needs.
