elecsun

I am considering selling my Salon. Just wondering how I go about deciding a sell price. Been in business 7 years, very successful. What are the criterias for selling a salon???

sunsally

Typically you set the price based on:

1. NET profitability (including full payroll, rent, utilities,...)

2. Asset value (value of your used equipment).

A "rule of thumb" is 1.5-2x NET profits --- but of course, in the end, the price is just a function of what someone else will agree to pay and what you will agree to take!

elecsun

THANK YOU!!!

Steve Underhill

Sellers almost always believe their business is worth more than it is. An overpriced business will not “get looks” and then creates angst in the negotiation process. Incorrect pricing is the #1 reason a business stays on the market too long. Getting an objective business valuation is an absolute must to determine a sale or purchase price.

If a business is for sale because the owner has lost interest, typically the business will suffer. The business will no longer be properly maintained and marketed. This will result in a steady decline in business as well as the business becoming rundown. When this happens unfortunately the business will also steadily devalue.


The standard in the tanning industry for the value of a tanning salon is as much as 200% of the average net profit of the most recent three years of business if the salon is in good cosmetic condition or where there is little or no net profit an asset purchase is an option. The additional variables are inventory & services owed for prepayment of tanning services. This is determined by the amount of services owed to tanners that have already been paid for. This amount will be subtracted from the value amount of the salon.

__________________
Stephen Underhill
Consultant
steve@smuconsulting.com