buying a hair salon?

glitter_fairy

I have found a hair salon I am interested in buying. I have a lot of experience as a hairdresser and running a salon but never owning one.

Any suggestions on how to find a good solister?

Any general advice on buying businesses?

somethingcorporate

Is there any reason you cannot start your own?

You will not be shelling out for "goodwill" which would probably be quite low for a hairdressed (I am not an expert in these things thought) but setting up your own salon would likely be considerably cheaper.

Why not have a chat to your local business link?

glitter_fairy

somethingcorporate wrote: »

Is there any reason you cannot start your own?

You will not be shelling out for "goodwill" which would probably be quite low for a hairdressed (I am not an expert in these things thought) but setting up your own salon would likely be considerably cheaper.

Why not have a chat to your local business link?

while setting up may at first look a better solution, this is something I have spent a long time looking into.

bris

somethingcorporate wrote: »

Is there any reason you cannot start your own?

You will not be shelling out for "goodwill" which would probably be quite low for a hairdressed (I am not an expert in these things thought) but setting up your own salon would likely be considerably cheaper.

Why not have a chat to your local business link?

Buying an existing business is not a bad way to do it, you take out one of the competition this way. Starting a new business means the existing one will still be there keeping it's existing clients that you inherit when you buy it over, hence less competition.

somethingcorporate

It's a basic service that does not inspire much customer loyalty as far as I can tell (just my male, laymans view). If you take over an existing salon and things change you will find yourself in the same place as having to attract new customers except having overpaid for a brand and a bunch of secondhand equipment.
You may pay over the odds for a brand and customer base that retains no longer term value.

It really depends on how much it would cost to set up a new salon vs what this established business is charging.

I suggest you have a chat to an accountant to see whether the existing business is fairly priced. If you can provide the turnover, gross margin and net margin figures I can give you a guide as to what I would expect it to be valued at.

paulwf

somethingcorporate wrote: »

It's a basic service that does not inspire much customer loyalty as far as I can tell

In my also male and also laymans view I think it attracts a very high degree of customer loyalty...to the hairdresser not the shop though! Proceed with extreme caution, I've come across the situation several times where a salon owner leaves to go and work from home and takes all their clients with them.

Do you also want the current staff? There may be TUPE obligations, personally I would want to pick my staff not inherit someone elses.

Do you want the current stock and equipment? This can be good if you are paying a very low price for it but otherwise I'm sure you'd rather select your own products.

Taking on existing premises will save a lot of money but I'd try and find one without any associated "baggage". Presumably you already have a client base you can take with you.

Savvy_Sue

somethingcorporate wrote: »

It's a basic service that does not inspire much customer loyalty as far as I can tell (just my male, laymans view).

In my female layman's view, there is a great deal of customer loyalty, BUT as paul says

paulwf wrote: »

to the hairdresser not the shop though!

paulwf wrote: »

Do you also want the current staff? There may be TUPE obligations, personally I would want to pick my staff not inherit someone elses.

This is something to be very careful about: if the staff are employed directly by the current business there will almost certainly be TUPE obligations, which in simple terms mean that you, as the new business owner, will have to pay redundancy for any staff you don't wish to keep on, and to negotiate changed terms and conditions if you want staff to work different hours or at a different rate of pay. If you're not aware of these obligations, your business plan will be badly flawed if you have to work them in later.

However, in some salons the hairdressers rent a chair rather than being employed. I suspect that system is easier to change if you want to, but it's not something I know anything about.

Advice on finding a good solicitor: you want a commercial solicitor, not one who spends most of their time doing probate or divorce. It won't be cheap, but it will be cheaper than getting it badly wrong because you didn't realise x, y or z.

oldoakey

You could stipulate in the sales agreement that the person you are buying from has a 10 mile + 10 year clause which states they cant set up in competition with you. This is common practice in retail but not sure how it could pan out in hairdressing, how would you know if they were etc etc

Also there is one direct advantage of buying into a trading business, you get instant cash flow.

YoungBusinessman

The loyalty is to the hairdresser not the shop. You do eliminate competition by buying.

You however take on any bad reviews the business has got before yet customers wont be so quick to give good ones if they know theres been a change in ownership....unless theres staff there being kept on upto change of ownership?

Owain_Moneysaver

oldoakey wrote: »

You could stipulate in the sales agreement that the person you are buying from has a 10 mile + 10 year clause which states they cant set up in competition with you.

You could, but it would be highly likely to be unenforceable. Courts are very reluctant to enforce 'restraint of trade' agreements. 10 miles and 10 years for a hairdresser would be thrown out of court as unreasonable.

3 miles and 1 year and you might have a chance.

Savvy_Sue

Another suggestion I've seen in buying a business with premises is to use an agent to do the negotiations for you. They know what they're doing ...