Questions to Ask When Buying a Hair or Nail Salon
Buying an established hair salon can give you a head start if you do your homework
Buying an Existing Salon? Here Are 6 Questions to Ask First
Are you thinking about purchasing an already established hair or nail salon? Existing salons already have stylists, technicians, a reputation and a strong client base, which makes purchasing one appear to be a great investment. Although an established salon may be a worthwhile business to buy, there are some possible drawbacks and obstacles for the purchaser. 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.
But don’t worry! At Minerva Beauty, we are all about making sure you feel supported — whether you are purchasing an existing salon or renovating your own. That’s why we have assembled this guide that will uncover the benefits of purchasing an established beauty salon, as well as some of the steps you will need to take to ensure your investment pays off.
Questions to Ask When Buying a Salon
Purchasing an existing hair or nail salon isn’t cheap because of the many benefits the transaction comes with. But it’s important to enter into your talks with salon owners with a list of questions that will provide insight into exactly what you’re getting with your purchase. Here are six must-ask questions to prepare for your meetings with salon owners.
- What equipment will be included with the purchase of the salon? It’s important to know whether or not you will need to invest in salon furniture or if your purchase includes everything in the salon — as is. Compare the offer against your salon supply checklist to get an idea of how much you'll need to purchase.
- How do the employees feel about the salon being sold? When you buy an existing salon, it’s important to show that you care about the people who work there in order to avoid high turnover rates. By asking this question, you will also get a glimpse into the company culture.
- Are there any outstanding debts or other liabilities that I will be responsible for? You will want to make sure you understand the full financial scope of the business you are buying so you can develop a suitable business plan without getting surprised by any financial issues.
- What is the neighborhood and community like? It’s important to know how your future community regards the salon you're purchasing. Is there a collaborative spirit or do businesses operate in silos? Is the neighborhood walkable, and is there convenient parking in the area?
- What is the salon’s current clientele? You should know the kinds of clients the salon you’re interested in serves so you can continue meeting their demands as you plan to take over the salon. You also want to make sure this type of clientele aligns with your target market, too.
- What is the salon’s social media and website like? Establishing an online presence can be just as difficult as starting a salon from scratch, so it’s important to make sure you are getting your money’s worth from a digital aspect as well.
With due diligence an existing salon can be a profitable investment
Finding Answers to Your Questions
Don't just ask the current salon owner your list of questions and stop there. You'll need to thoroughly vet the business before you invest your hard-earned money, and that means putting in the legwork.
Search online for competing salons in your area, and read reviews of your potential new business as well as competitors. Talk to a realtor or business broker who knows the area well and ask about local trends. If possible, speak with the current employees (including support staff) and get their read on things.
Unless you're comfortable analyzing income statements, balance sheets, and cash flow statements, hire an accountant to help you understand the established salon's financial position and estimate ongoing costs. It's also wise to work with an attorney to help you minimize risk and protect your investment.
Unless the salon was recently renovated, you'll likely want to make some updates
Benefits of Buying an Established Salon
Buying an established salon comes with many upsides as opposed to starting a salon from scratch. Here is what a purchaser can expect to benefit from when purchasing an existing salon:
- Established and loyal client list
- A committed staff, from stylists to receptionists and more
- A turnkey salon with equipment like high quality salon stations and décor
- Strong branding and reputation
- Existing relationships with other community businesses
- Strong inventory levels
Buying an Existing Salon Checklist: Assets You Need to Buy
While the salon you’re about to purchase may come with all the necessary resources to remain operational, you will need to make a few purchases to freshen up the business and make the salon your own. At Minerva, we offer salon equipment financing options to help offset the initial investment. Here is your official checklist for salon tools, equipment and supplies to start your new ownership off right:
- Salon Equipment – You may find that some salon seating, styling stations, pedicure chairs, manicure tables, or other furniture need to be replaced.
- New Signage and Branding Materials – Are you changing the name of the salon you're purchasing? If so, you may need new signage and branding materials like business cards.
- New Tools and Supplies – Show your new team that you want to empower and support them by purchasing new tools for them. Salon staff and customers alike will appreciate updated supplies like salon towels, anti-fatigue mats, task lamps and waxing supplies.
- Marketing Services – If the previous salon owner didn’t handle digital marketing very well, you may find it beneficial to invest in a marketing professional to elevate the salon’s website and social media presence. A marketing professional can also help you plan and execute a strategy for announcing the change of ownership.
- Salon Software: — Make sure it’s easy for clients to book or change an appointment from a smartphone, and that it’s also efficient to train staff on your booking app.
Keep reading: How to update your salon