How to Sell a Hair Salon

Are you thinking about selling your hair salon? The process of selling a small business is always a complicated one, especially in a niche market such as the hair salon industry.

If you want to sell your hair salon, you will want to get the best possible price. Selling your salon starts with identifying and working on certain key factors for presentation to potential buyers. In other words, you will need to design a flawless exit strategy to get the maximum profit out of your sale. Further, planning for an eventual sale will create less work when the time comes. Here we mention the step-by-step process of selling your hair salon with the highest possible price along with a smooth transaction:

Develop an exit plan

The first step involves developing a plan that will help ensure that your business is thriving and will remain successful in the future. Moreover, a well-planned exit strategy will make the selling process less overwhelming. When developing your exit plan, you need to focus on these questions:

• Why are you selling your hair salon in the first place?
• When do you want to sell the hair salon?
• What sale price you need to support your future investments/plans?
• How will the transfer of ownership take place?
• What will be the future employee contracts after the sale?

Answering these questions will simplify the process of selling. You should consider building a team of an attorney, a broker, and an accountant to help you formulate a thorough exit plan.

Get the paperwork organized

Before selling your salon, it is crucial to focus on your documentation. Organize your salon's financial details – profit and loss statement, tax returns, and other transactions – of the past three years and professionally present them. A prospective buyer will always want to see these financials to evaluate your business. Also, provide a copy of your lease if you are renting your premises. However, make sure that the buyer signs a non-disclosure agreement to keep the salon's financials confidential.

Upgrade the appearance

The first thing that the buyer will observe when he visits your salon is its physical appearance. First impressions do count, and they tend to last long. So, you need to put an effort to make improvements to attract the right buyers. You can take into account the following considerations:

• Check the condition of equipment, furniture, and fixtures, and fix them if required. Also, consider investing in modern equipment and technology.
• Expand your services, particularly with organic and inorganic products.
• Keep the premises as clean as possible.
• Use modern procedures to ensure customer safety.
• Get the wall painted and the shelves cleaned.
• Repair all the non-functional appliances, e.g., bulbs, fans, etc.
• Do landscaping to add aesthetic value.
• Add new signage even if the prospective buyer wills to change the name in the future.

Business valuation

Determining your business's worth is one of the most important things an owner can do before marketing his/her business for sale. Business valuation is a natural step before negotiating your salon's price as it ensures that you do not lose money and agree to an unprofitable deal. However, keep in mind that the business valuation you calculate and your buyer calculates will always be different figures depending upon the factors and the type of valuation method. When calculating your salon's value, consider the following factors:

• Assets
• Years of operation
• Streams of profit
• Revenue

If you do doubt your ability to assess an accurate estimate of your salon's worth, we recommend you hire a business valuation expert. Further, you can also take the assistance of online valuation calculators.

Focus on reputation

The reputation of any business is its most vital intangible asset. It is your salon's reputation that decides the number of customers entering your salon. During due diligence, your potential buyer will do his best to assess your salon's reputation. Therefore, focus on satisfying your customers with trendy styles and techniques, and ensure to be in their good books.

Another important aspect of reputation is to keep an excellent online presence. It is one of the first checks the buyer will make before visiting your salon. Therefore, try to keep your website and social media pages updated. Combat any negative reviews with positive feedback to demonstrate that you are committed to the highest quality services.

Market your salon

After you feel confident in your preparations, it is time for you to market your salon for sale. You can advertise your salon for sale in newspapers and through a word-of-mouth strategy. You can also advertise your salon on internationalbusiness.com. However, hiring a business broker is considered the best option in this regard. Business brokers help put buyers and sellers together, and they also help during negotiations. Visit internationalbusinesses.com to find brokers in your area.

Keep the business running smoothly

One of the most common mistakes the business owners commit before selling their business is that they lost passion in running their business. As a result, profit and revenue go down, and this scenario jeopardizes a potential deal. Here we mention a few tips to help you avoid such a haunting situation:

• Hire a broker so that you can focus more on your business rather than finding buyers.
• Keep the selling of your salon confidential from your staff until the negotiations are not underway. In this way, they will keep working without losing interest.
• When marketing your business, do not include the salon's name in your ads to prevent your customers from getting nervous.

Negotiate the terms and close the deal

Once you find the right buyer, take the invaluable help of your broker to negotiate a fair price for your sale. You should consult a CPA or an attorney to discuss the deal structure.

Consult the attorney to draft the final purchase agreement. Get the agreement signed by the buyer. Usually, the bill of sale is proof that the transaction has been completed.