Selling A Beauty Business
If the time has come to sell your beauty or hairdressing company, this page provides the key information that will guide you through to a successful exit.
We discuss the reasons why salon owners decide to their sell business, the importance of establishing the correct valuation and the steps you can take to ensure all the vital preparation has been completed.
You will need to decide upon your objectives for the sale, exactly which assets will be included in the valuation and the extent of support you require from an experienced, successful business sales adviser like KBS.
For over 25 years, we have been selling not only individual hair salons, barber shops, nail bars, tanning salons and laser clinics but also chains of multiple establishments.
A perfect example of a sale we oversaw in this sector was The Tanning Cabin which, with six outlets in the Midlands, was sold for an undisclosed sum to The FeelGood Group, for whom The Tanning Cabin stores complemented their existing chain of outlets.
The landscape of selling a salon business
A surge in the number of independent beauticians and hairdressing salons has meant companies increasingly need to innovate to attract and retain customers.
The digital world is key to this objective, by means of not only enabling customers to book appointments online but for clients and potential clients to read and leave positive reviews that will encourage new business. A social media presence is also an important advertising medium.
Companies also need to be aware that the online marketplace provides greater opportunities for customers to purchase products, which leads to DIY beauty and haircare becoming more tempting.
Salon owners should know there is an increasing demand for mobile, in-home services which provide those operators with low overheads and potentially offer greater convenience to customers – many of whom may now work remotely and spend less time in high-street environments.
Yet there is still a strong interest among buyers for beauty businesses, not least due to the rise in popularity of male grooming given the increasing focus on self-image and greater demand for elaborate hairstyles and fashionable skincare products.
Preparing To Sell A Beauty Business
Several boxes need to be ticked to put your company in the best possible place for a successful sale.
This entails collating all the necessary information a potential buyer will need, regarding the financial position of – and outlook for – the business, contractual details relating to the premises and your staff, and an inventory of any goods held. You could conduct your own due diligence to ensure everything is in order on the accounting side and we can help you with arranging this.
Another part of the service we provide is compiling a comprehensive Information Memorandum which reflects every facet of your business, presenting a full picture to potential acquirers.
One aspect which is entirely down to you is ensuring your business looks the part and is functioning to best effect should a buyer call in to make personal observations. Make certain the premises are clean, tidy, everything works as it should and that your employees are happy and motivated.
Valuing Your Beauty Business
Factors that influence the value of a beauty business include:
Stock value: If your business is listed on the stock market, this refers to the price of its shares – an indicator of the company’s financial health and growth potential.
Company assets: Generally, this means the resources your company owns or controls, including cashflow, revenue streams and client base.
Liabilities: Does your business have any outstanding debts, loans or bills? If these are significant, they could affect the company’s valuation.
Inventory: A list of products and goods in stock that your business intends to sell, the value of which is recorded on the balance sheet.
Trading location: Where a business is based can impact its valuation, factoring in accessibility, visibility and competition.
Property type: Are your premises owned or leased? If you own the building, you have the option of renting it to the buyer of your business.
Specialist equipment: Does the company have any tools or machinery in which a sizeable investment has been made?
Fixtures and fittings: The furnishings with which the business occupies its space, including lighting, shelving and display cases.
Operational structure: How is your company managed? Strong communication channels and decision-making processes are a major positive.
Growth potential and future projections: Is the business expanding, and displaying a trajectory of improving financial performance?
We utilise all these factors when calculating the valuation of a beauty business. Contact us if you want to find out how much your company could be worth on the business sales market.
Ensuring A Secure Sale For Your Beauty Business
Confidentiality is critical when selling a beauty business, especially given the personal connection you will have built with your regular clients. The timing of when your exit is disclosed is vital to ensure your customers do not feel disappointed by your decision and seek a different provider.
Particularly important is the discretion deployed by potential buyers, who can be bound by a Non-Disclosure Agreement when they register formal interest in acquiring your company and which means they can access key data and information.
This is a part of any business sale which we take extremely seriously, and we make sure all expressions of interest are legitimate and from parties with both the financial means and the proven acumen to drive your company forward.
Options For Selling A Beauty Business
We have an exhaustive range of contacts in our network across all buyer types, which means we are ideally positioned to find the perfect acquirer for your company.
But owners of beauty businesses often consider selling to a member of their staff who has ambitious plans and is ready to step up, which can result in a Management Buyout. This is one of the alternative business sale routes we suggest to business owners as a matter of course, and in which we have demonstrated a great deal of expertise.
Expert Support Selling A Beauty Business
Whether you find the prospect of selling your business exciting or daunting, one thing is for sure – you don’t need to go it alone.
KBS is a one-stop shop for anyone selling a beauty company and our established pedigree over more than 25 years of experience in the business sales industry is built upon applying a bespoke, personalised service for every company owner.
As well as understanding your targets for the sale, marketing your opportunity and identifying the ideal acquirer, we can put you in contact with providers of the other key services you may need, e.g. legal experts and tax advisers.
By utilising our vast amount of knowledge and contacts and the latest data and technology, we can maximise buyer reach whilst only considering those with the financial means, insight and desire to buy your company and push it forward.
With a proven history of award-winning success, we can guide you along the journey towards achieving a business sale that fulfils all your objectives. Contact us on 0161 258 0118 for a 0confidential initial discussion.
RECENT BUSINESS SALES IN THE BEAUTY SECTOR
The Tanning Cabin
KBS Corporate has successfully completed the sale of The Tanning Cabin, a midlands-based chain of tanning salons, to The Feel Good Group for an undisclosed sum.
The Tanning Cabin, which operates stores in Burton-on-Trent, Derby, Oldbury, Stoke-on-Trent, Swadlincote and Wednesbury, provides great value tanning, beauty and nails services to its loyal customer base.
The acquirer, The Feel Good Group, which operates existing brands such as Sunless UK, a manufacturer and retailer of cutting edge tanning technology, and Blue Tanning & Beauty, a supplier of sunbeds and beauty consumables to a wide range of individual and trade clients, will add The Tanning Cabin stores to their existing chain.
KBS Corporate Deal Executive, Sonia Cottrell, commented, “The acquisition is a great fit for the Feel Good Group as both the buyer and seller shared the same values, which puts The Tanning Cabin in good hands to continue their growth within the market.”
Legal advice was provided by Gateley plc.
The Tanning Cabin
Sector: Health & Beauty
Location: West Midlands
Buyer: The Feel Good Group Limited
Ready to talk about your business requirements?
Give us a call on
+44 (0) 161 258 0118 or contact us now to get started.
The Tanning Cabin
Sector: Health & Beauty
Location: West Midlands
Buyer: The Feel Good Group Limited
Speak to our expert team on 0161 258 0118 to arrange a consultation
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