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Old 05-21-2002, 02:05 PM   #1 (permalink)
 
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I'm just curious how other salon owners place a value on their business. Besides going and getting an appraiser (that would come later) what would be a general formula to use to find an asking price?
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Old 05-23-2002, 10:53 PM   #2 (permalink)
 
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Do you own the buliding? Value??
Machines? Do you own them? Value?
Upgraded electrical? How much?
Computer and misc. items? How much?
Inventory on hand? How Much?
You can not sell really a client base.. no one owns a person..but if youv'e been around along time? How many potential people?

Most business selling take their figures over a three years and go from there.
It's a buyers market now..so you'll have room to bargin..on both sides..
Just my opinion..

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Old 05-24-2002, 01:16 AM   #3 (permalink)
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I guess most of the salons are over priced and the seller feel that it is worth it.
I read a while back on a post where someone stated, "Most salon owners selling their salons, would never pay the amount they would expect to get for theirs."(if they were in the market to purchase a existing salon)

That rings true...blood, sweat, and tears do not have a fixed value..often times they have no value.

What Chris was talking about basically was a good rule of thumb.. ask for the value of your equpiment. Everyone does it differently but this is how I understand it to be so...

Equpiment(NOT NEGOTIATABLE) = your beds,computer, timers,neon signs, pop machines, coolers, ,storage cabinets, washer ,dryer, microwave, UV meters,and everything in your salon. (In other words..room furniture, sationary and non stationary objects such as plants,artwork, and accesseries.)
Good will (Negotiatable)= Clients,Advertising you have prepaid for, somewhat intangable But are an important part of the price...IF the seller can prove the activity of the salon.

PLUS
Inventory(Negotiable)=lotions, misc. merchandise,office and cleaning supplies.(Polishes, paper towels,sanitizer..etc)

I think that a salon should pay for itself in and out side of 3 years.
Or some chose to make it real simple....the salon after ALL expenses are met.. makes $50,000 AND CAN PROVE IT..(IE: TAXES PAPERS ETC.) INCLUDING salaries for the owner and the staff. Now you have consider the number of emplyees. And how many hours the salon owner worked and adjust from there. If the salon owner had little to no employees.. well, I guess you get the picture.

The truth of the matter is very few salon owners actually show everything that they make.. so you often times have to rely on the equipment, goodwill, and inventory method.
Hope this helps..

Mj




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