How to Sell a Beauty Salon in a More Profitable Way

Sometimes there are business crises or other reasons when it becomes necessary to sell it. However, this is not easy at all. My article is about the issue of selling a beauty salon with the most benefit.

What Are The Reasons For Selling The Beauty Salon?

Among the most common reasons are the following:

Economic reasons:

  1. For a long time, the salon has not brought the expected income.
  2. There was a constant shortage of working capital, and, as a result, the business is working half-heartedly. It is turning into a real black hole, in which all investments disappear without a trace. Related: How to Sell a Business That is Not Profitable

Organizational reasons:

  1. It is not possible to prevent cases of theft of materials and enticement of customers.
  2. Attempts to create a permanent customer base remain unsuccessful, and promotions fail.

Industrial and commercial reasons:

  1. You can not compete in your niche, purchase more modern equipment, and provide the widest possible range of services.
  2. Cosmetics are poorly sold.
  3. The salon is losing its previous occupied positions.

There are other reasons why the owner can decide, to sell their business. The presence of these reasons indicates that you are faced with serious problems in the fields:

  1. administration;
  2. finance;
  3. marketing;
  4. business organization.

How to sell: step by step instructions

Step 1. Preparation

To assure a potential buyer that your business is reliable, it is worth taking care of bringing the documentation into proper form. You must ensure that all the necessary licenses, certificates, permits are available. Often, it is the experts' assessment that plays a decisive role in deciding whether to purchase a beauty salon. In addition, contacting specialists will help save time, because it will save each potential buyer from the need to independently check the reliability of your business.

A winning move will be the preparation of a presentation, built according to the following plan:

  1. an overview of the services provided;
  2. market capacity assessment;
  3. data on the specific gravity of your particular salon on the market;
  4. analysis of competition in the market;
  5. client database;
  6. list of working specialists;
  7. review of promotional events and promotions;
  8. a well-written business plan, which analyzes the potential, advantages, and disadvantages (optional).

As for the services of experts, they are quite expensive - about 13-15% of the beauty salon cost. These costs are quite reasonable: a specialist will save you time and energy and nerves. Ideally, you should contact a company that will be able to go with your transaction at all stages. You should be very careful when choosing a company. Do not forget to ask in advance about its experience, the quality of its services and the qualifications of specialists. You shift your worries onto the shoulders of those who constantly rotate in the circle of investors and entrepreneurs. Remember that each stage of preparation is very important!

Step 2. Drawing up an explanatory note.

To show your business more successful, it is necessary to draw up an explanatory note. It must be noted that the shortcomings are not so critical and it is quite possible to correct them.

Among specialists, this explanatory note is called "Investment Memorandum". To draw it up correctly, you need to have the appropriate competence.

Related: How to Write a Selling Memorandum

Step 3. Price calculation.

There are many ways to calculate the price. In this case, the values ​​of the following indicators are taken as a basis:

  1. market demand;
  2. the amount of profit, the possibility of its growth in the future;
  3. the size of investments in the creation of such a business from the very beginning;
  4. the possibility that the business will cease to be profitable;
  5. level of control and return on assets.

To get the most profit from the sale, you need to approach the solution of several problems at once:

  1. finding a suitable client,
  2. carrying out a comprehensive assessment,
  3. competently conducting negotiations, etc.

Step 4. Negotiations.

Negotiation is the stage where you can judge how well the preliminary preparations have been performed. If everything was done at the highest level, it will be you who will control the transaction. Quality preparation will help you present your salon as a flawless and ideal business, created by a successful and talented entrepreneur.

You should also expect retaliatory actions from the buyer. For example, they could attempt to bring down the price or catch you hiding flaws. You should contact a company that will take full responsibility for the preparation and support of the transaction. Professionals will be able to approach the solution of the task set and achieve maximum benefits, taking into account the specifics.

Related: 12 Factors That Will Make Your Business Harder to Sell

What You Should Take Into Account

Sale in secrecy.

An open sale of a beauty salon can cause serious damage by scaring employees, partners, and investors. It gives competing establishments a chance to harm you and your reputation.

Video: Selling your business discretely with the Pitch-to-Brokers tool

The owners do not know the price of what they are selling.

There is a pattern in which salon owners determine how much they want to get. But they do not know who can become their potential buyer and what price will be acceptable for them.

Buyers don't know what they really want to buy.

At the same time, a similar problem is faced by buyers who have sufficient funds to complete this kind of transaction. But they do not understand what exactly they need. Often the contract is concluded in a rash, especially if it seems that the proposed object has many advantages and is in a good condition. In such a situation, instead of a beauty salon, it is quite possible to buy a club, bar, or something else.

What Mistakes Can Prevent You From Selling The Salon

  • Violation of the preparation rules (or skipping this stage).
  • Misidentifying the types of potential buyers and why they want to buy your business.
  • Long negotiations with unpromising buyers.
  • The cost estimate is given unreasonably.
  • Slowdown or excessive haste.
  • The transaction is carried out non-confidentially.

It is worth paying attention to the reasons why excessive publicity during a sale can lead to some problems:

  • Competitors, possessing detailed information, can scare away or entice customers. As a result, the timing of the transaction can be delayed or even lead to its failure.
  • The open sale will alert your suppliers, who will no longer provide you with deferred payments and will begin to insist on prepayment. This will force you to use additional funds.
  • Also, this information will have a certain impact on your employees, who may show a desire to find a more reliable place. Thus, you can lose one of your main trump cards, which is important for potential buyers - the staff of professional craftsmen.

Please note that information about your intention should be disseminated through proven channels. Also, there is no need to delay the conclusion of the deal, but try to complete it as soon as possible.

More on the topic: Beauty Salons for Sale

Bio: Rebecca Carter works as a Content Writer at StudyEssay company that provides paper help. She has a Bachelor's Degree in Business Administration and during her study developed an enthusiasm for writing about the latest trends in the business world. When she is not writing Rebecca enjoys being in the mountains and volunteering.

Published by ExitAdviser


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