Most salon owners don’t sell their business for a profit.
The beauty industry has this magical thing going on – people stick around for ages, especially salon owners. 🪄
What’s really cool (and challenging) about owning a salon is that it’s not a walk in the park. It can be tough emotionally and financially. But hey, what business isn’t, right? I’ve been in the industry for 22 years, but for 15 of those I’ve worked with salons across North America as an educator and consultant, and here is what I’ve seen. The challenges can wear down owners, leading to a sort of “eh,” attitude. Aka: Complacency. (and I’ve been 100% guilty of this myself as a salon owner so hear me out, I’m not pointing fingers.)
Complacency basically means you’re just coasting along without much drive or ambition. But we have to narrow this because salon owners have drive and ambition, you’re one of the hardest working groups of people I know. You are also all insanely passionate by nature and that rarely goes with complacency either. The common place I see complacency is in the willingness to evolve.
So why are so many salon owners complacent when it comes to scaling their business? If I had to guess it’s because you’ve been beaten down a few times mentally and you keep hoping you’ll just get the growth you need. But it doesn’t happen magically and what got you here won’t get you where you’re trying to go. (hopefully a successful and profitable exit in the future)
Now, everyone’s got their own dream for their business, and that’s awesome. But here’s the thing – ever thought about what your salon could be worth if you ever wanted to sell it? To make that happen, you need some serious profit in your pocket. A salon that isn’t profiting, no matter how big the top line, isn’t worth much. Don’t learn that the hard way when you are at the time you want to sell and the price people are willing to pay isn’t anywhere close to what you “think” it’s worth.
Let me tell you a little story. I started, built, scaled, and eventually sold a salon. And you know what helped me nail that sale? Hiring smart.
Hiring lets you become a master at something called economies of scale. Now what’s this fancy term “economies of scale” all about? It’s basically when things get more efficient as you grow. Think about it like this: it costs nearly the same to have a trainer work with two people together as it does with just one. Once your salon covers its basic costs, every new employee brings in more profit because your expenses are spread out.
But here’s the kicker – a bunch of salon owners are over 50, and the mess from Covid didn’t help anyone’s business. So, even if selling your salon isn’t on the cards for a while, it’s smart to start planning now.
Here’s a simple roadmap:
- Cut the Fluff: Take a good look at your expenses. Maybe you’re paying too much for credit card processing, or your internet bill’s a bit steep. Time to trim the fat.
- Figure Out Your Money Goals: Calculate how much cash you need to bring in to feel good about your profits. Then, work backward to see how many clients you need to serve or how much your team needs to bring in to make that happen.
- Dream Big: Set some growth targets for your salon. Then, figure out how many new hires you need to hit those targets. It’s all about building up that dream team.
So, what’s the takeaway? Building a successful and sustainable business takes time. Planning for a successful sale takes time and effort. But trust me, you don’t want to just hand over your business for peanuts after years of hard work. You deserve better. So, let’s get to work and make that exit plan a reality! Review the steps above and make it happen. I’m cheering you on.
