Sell Hairdressing Business

 

Selling your business can often be exciting but also quite daunting. Just because you have the skills to run the business on a day to day basis, it doesn’t necessarily mean you naturally have the skills to negotiate the best sale price. There may be many reasons as to why you have decided to sell your hairdressing business and navigating the sales process can sometimes be rather complicated. In this article, sell hairdressing business, we look at the process involved.

Free Initial Telephone Discussion

For a free initial discussion on how we can help you to negotiate the sale of your hairdressing business, get in touch with us today. We will review your situation and discuss the options open to you in a clear and approachable manner. Early expert legal assistance can help prevent you making mistakes, saving you money and time and also avoiding the stress of dealing with these issues on your own. Simply call us on 0345 901 0445 or complete our online enquiry form and a member of the team will get back to you.

What Are Options Open To You To Exit The Business?

There are a number of potential options open to you when you are considering selling your hairdressing business. These can include:

  1. Liquidating the business. If you run a small salon or one where you are the main attraction for bringing in and retaining clients, this may well be the only option. In this instance, you would look to close down the business and sell off all the assets.
  2. Sell the business to one of your existing staff. This may be a good option as the employee gets an established business they are familiar with. It may also be possible to arrange a long-term buyout, which can increase loyalty and motivate staff to work hard and make the business succeed. You may also be able to remain in the business in some capacity if this suits you. Additionally, this type of sale should ensure many existing clients remain.
  3. Sell to a family member. This is the ideal scenario for many salon owners, as keeping your business in the family ensures that your legacy lives on and provides a living for your heirs. One of the advantages of this type of sale is that you may well be able to continue to have some involvement in the business. It is worth ensuring, however, that the family member is capable and motivated to run the business.
  4. Sell on the open market. This is often the most popular exit strategy. The business owner puts the salon up for sale for a certain price and ideally receives that amount. A profitable, well-run salon should be attractive to buyers and sell quickly. Assets, database, salon name, and goodwill can be incorporated when valuing the business for sale, maximising the return to the owner. Bear in mind that valuing a business can sometimes be far from straightforward and you should try and manage your expectations with regards to an achievable sales price.

Valuing the business

In valuing a salon, what is known as a multiple is used. This often means whichever is higher of 3 times the annual profit available to an owner working full time or 6 times the annual profit available to an owner who delegated everything. Stock is valued at cost, equipment at a depreciated value and both are added to the guide price. Freehold property is valued and offered for sale or lease. Potential purchasers will ask to see financial information. This will include balance sheets and profit and loss accounts for the past three years (and sometimes longer) so it is advisable to have these documents ready.

 

Preparing the business for sale

Ensure all records are up to date and are kept in an orderly manner. Keep the salon looking immaculate as potential buyers will often walk by unannounced to see how the salon is operating. In terms of financial data, the last 12 month period is the most important but buyers will often delve deeper into your trading history. Remember, there is little you can realistically do in the few months before the sale that is going to affect the value. As such, try and prepare your business well in advance before you actually look to sell it.

How we can help

We have a proven track-record of helping clients sell their hairdressing business no matter the size. We will guide you through all the necessary legal due diligence in a comprehensive and timely manner and support and advise you with all the negotiations. We firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.

How to Contact our Corporate Solicitors

It is important for you to be well informed about the issues and obstacles you are facing. However, expert legal support is crucial in terms of reducing risk, saving you money and ensuring you achieve a positive outcome.

To speak to our Corporate solicitors today, simply call us on 0345 901 0445, or allow a member of the team to get back to you by filling in our online enquiry form. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.

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