Case Study: B’Dazzled Hair and Beauty Salon acquired by Indulge Hairdressing Ltd
Background Information
Our Client owned a successful Hair and Beauty Salon in the City Centre of Bedford. It was a profitable business with an excellent location and also benefitted from low rent and overheads. It had to be sold with the utmost CONFIDENTIALITY, as the owner did not want staff to find out and to then lose a good team. She wanted to sell to travel, and recuperate, after having given her all to the business for several years.
ETS Corporate is aligned with the NHF and are able to offer a very specialised service in the sale of Hair and Beauty Salons.
We were able to find a local acquirer, that was already established in Bedford as a Hair Salon. They wanted to relocate their existing business into a better position and with a more favourable lease. Further, the purchase of B’Dazzled allowed Indulge to start offering beauty treatments, and of course, increase their client base.
About the Business
This business is a High Street based Hair and Beauty Salon situated in Bedford. It provides an array of services and was established in 2011. The turnover was well over £85,000 with a profit in excess of £35,000. It has an excellent client base, with trained staff and a full time working owner and would have suited either an Owner/ operator or an investor. The owner was able to consider an earn-out to encourage an established Acquirer that could push the business forward.
The Challenge
The owner initially instructed a national agent and paid upfront fees. She was very disappointed as they produced no interest at all. She decided to sell the business through ETS Corporate because she felt we had more incentive to sell as there were no upfront fees and she was only going to be charged if the business is sold. She wanted a more specialised, effective and personalised approach and felt that using a boutique Business Broker like ETS would bring better results.
If the owner did not sell the business, she was prepared to leave the staff to run it. She felt this was not the best option because she had such a strong client base of her own, which was the main revenue stream for the Salon. In addition to this, she did not feel the staff were able to operate it as effectively. She was determined to take her time out to travel, so, as a last resort was prepared to simply close it down. The owner was initially referred from Daltons Business, with whom ETS Corporate have a long standing relationship.
Our Solution
ETS Corporate first of all, made sure that all advertising was confidential and ensured the business was protected and customers and staff did not find out until the owner was ready.
All advertising was proofed by The owner to ensure she was comfortable with the contents being published. In total, 20 interested parties were generated from the website www.businessesforsale.com, and from www.daltonsbusiness.com, 12 enquiries. All potential Buyers were carefully vetted financially and for suitability and Non-Disclosure Agreement signed before any information was disclosed. Also, local and national competitors were discretely approached without giving away the identity of the business.
The Acquirer, Matt Goodman, from Indulge Hairdressing Ltd Owned a local salon, which they were looking to re-locate and to introduce a beauty service. It was their first acquisition and they therefore needed some expert guidance, which ETS Corporate were able to provide.
Various options were discussed with Matt, and after careful and long deliberated negotiations, an earn-out deal was put together. Although ETS Corporate represents the seller, it is important to broker a deal that is a win-win situation for both parties. In this case, the final sale price was partly determined by the future success of the business, as the deferred payments were to be made over 6 months after completion.
ETS Corporate brokered the whole deal, and were on hand to ensure the deal was completed within 2 weeks after the initial agreement.
Watch the ETS Corporate Review video with the buyer:
Results
ETS Corporate were able to find a suitable Buyer for the Hair and Beauty salon and the owner was able to carry out her plans to travel. The Acquirer Matt Goodman and his team were also very happy to have found a new premise, a strong client base, and to be able to introduce beauty treatments.
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.