20 tips to add value to your salon, even if you are not quite ready to sell yet:
1. One or more of the Owners of the business may wish to stay on, especially if the business is acquired by a larger chain. Nevertheless, your business will be more valuable if it can be run unaffected by your staff and management team. If you can prove the business can operate without you, it makes your exit quicker.
2. GET A VALUATION DONE: this will at least give you a starting point to know where you are. A good Broker will be able to explain a valuation to you, and where you can improve the value of your business. You can book a free telephone meeting with our consultant to establish a realistic valuation at www.ets-corporate.com.
3. Look at the financials well before a sale and clean up the balance sheet. Get rid of unnecessary costs and assets and make the business look as profitable as you can. Also, understand the true profitability of your business.
4. Put together a realistic financial forecast for the future financial performance of the business.
5. Speak to your tax specialist, so that you understand fully your tax position on a sale and try and establish the net proceeds of a potential sale.
6. Regularly review all supplier prices and ensure you have the best deal you can get. Also try and maximise retail sales through training and offering staff incentives.
7. Ensure that the client base is retained after a sale, so getting the staff to buy into a sale, either before or during the process is important. Buyers are always wary of staff and clients leaving after a sale.
"Make sure that you have a solid and realistic plan for the future of the business and that you can articulate that to a Buyer."
8. Can you offer more services if so try and introduce them, so that a Buyer can see potential.
9. Make sure that you have a solid and realistic plan for the future of the business and that you can articulate that to a Buyer.
10. Review all your business systems and ensure any flaws are ironed out.
11. If computer systems are outdated, update them. Ensure as much of your business is as automated as possible. It may be worth exploring available software which may help your business become more efficient.
12. Have an effective and proveable sales and marketing strategy in place to retain and find new clients including a good website and social media presence.
13. Try and establish a niche and know your USP’s over your competitors. It may be useful to do a SWOT analysis, which we do for you during our free telephone consultation.
14. Ensure your business is complaint with all new legislation and regulations within your industry.
15. Deal with any personal issues you may have between Partners, or any other stakeholders as well as any staffing issues. Ensure you know what it is you want to do in your life and that you are able to make the best choices for yourself. Sometimes, the interests of each Owner may be different and these need to be aired and spoken about.
16. Carefully inspect all aspects of your business from a Buyers eyes, trying to be as objective as possible. Outside help and advice can help with this.
17. Be clear about your reasons for selling when you are ready.
18. Understand the type of acquirer that you will want to aim your business at. Then ask, “what would they like to see in place to acquire me for maximum value?”
19. Ensure that you understand the sales process and the documents and information you need to have ready. A useful resource is our eBook entitled “Selling Your Salon” which can be requested free from https://www.ets-corporate.com/sell-hair-and-beauty-salon
20. Seek professional help, and design an exit strategy. We can help you analyse where your business is at the moment and construct a plan to help you achieve your goals.
Book your free consultation with the author of this post Zach Dogar. Zach, has over 20 years experience as a business broker and has helped hundreds of business owners prepare and sell their businesses.