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Buying a beauty salon: a sector guide

At a glance

  • More independent shops opening
  • Monthly costs vary enormously depending on turnover - can be from £15,000 to over £120,000
  • Sophisticated machinery is expensive and requires capital investment
  • Client-customer relationship is crucial
  • Investors may need to employ a skilled manager
How to run a beauty salon

Beauty therapy used to be confined to a few basic treatments carried out by a sole trader operating from home.

Of course, this is still a big part of the industry - but nowadays it is often just the starting point in a therapist's career.

As disposable income has increased, more women - and men - are starting to view beauty treatments as an essential part of their lifestyle.

This has led to the rise of the dedicated beauty salon, catering for everything from manicures and pedicures to complimentary therapies and tanning.

In certain areas of the county, such as the home counties or Cheshire - certainly the more affluent regions, this trend is more pronounced.

However, if you tailor your business to the needs of your market, then it is possible to run such a business almost anywhere. Location is less important - customer relationships are the key.

They are not outlandishly priced businesses and from an investment point of view, people can invest in one big one or two or three small ones, looking for a return

Dave Haward, County Business Sales

Dave Haward, partner at County Business Sales' office near Brighton, explains that it is increasingly common for beauty salons to be sold as going concerns.

Until recently, most of the business "stock" was in the individual relationship between the therapist and the customer.

"Traditionally we found that some people wanted to invest in hair salons and the same is now seen in the beauty field as well.

"They are not outlandishly priced businesses and from an investment point of view, people can invest in one big one or two or three small ones, looking for a return," he says.

Price-profitability relationship

Price, as with any business, is related to profitability.

Haward adds: "You see salons that could be taking anything from a few hundreds a week through to several thousands. The business valuation will be commensurate with that.

"Beauty businesses are on the market for anything between £15k and £120k - sometimes even more.

"It is one thing having a business where you're selling floor space with a couch. But some businesses can have thousands of pounds of equipment, for example, for laser treatment or tanning."

If the business doesn't have the latest sophisticated machinery, then your gut reaction might be to kit it out with the latest equipment - which could cost between £30k and £40k. For most salons, it will take several years to recoup that money.

As so much still depends on that individual bond between therapist and customer, Haward believes one of the most important things about buying a salon is to ensure a smooth transition process between ownerships.

"If someone is prepared to work alongside you during the sales process, it will help maintain the client base," he adds. "It goes back to one of the major things we advocate, which is confidentiality during the sale."

"If the whole world knows the salon is for sale, firstly the clients get nervous as they think their favourite therapist could be moving on, and secondly, the staff get nervous - never a healthy thing for any business."

Haward also has a few tips for those who are thinking about a beauty salon as an investment.

"Two things spring to mind. Obviously if you are going to be overseeing it yourself, you have to be a sensible distance away to be able to cope with crises, like staff sickness."

"Alternatively, you will require a good manager - someone who might be a skilled therapist but who also has management skills. They could take the management interest away from an investor who doesn't really want to get involved.

"You do see partnerships building up with one working partner and one investment partner," he adds.

Another entrepreneur with long experience in the industry notes that "the majority of salons are run by beauticians with very little or no training in business management, sales, marketing or finance - some of the most essential skills needed to make any business successful and profitable."

Interpersonal skills

Of course, both hands-on managers and therapists need to have highly developed interpersonal skills - as with any customer-facing business. 

Unlike many such businesses, the hours need not be too demanding. Typically, salons have followed hairdressing trends and closed on Mondays.

Clearly, the hours chosen depend upon the volume of trade expected. Some salons follow standard retail trading hours, whereas others open late to cater for working people.

In certain areas, the custom of "ladies who lunch" could be enough to sustain the business.

Haward explains that the synergies between beauty therapy and hairdressing continue to grow, and the sector is seeing the emergence of "turnkey" operations that cater for needs at special events such as weddings.

These kinds of businesses really allow the therapist or manager to tap into the social side of the operation.

It will also provide them with the satisfaction that they have helped someone else look and feel good - while, hopefully, having made some money in the process.


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