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How to Value a Beauty Salon
The beauty salon industry is booming, which is wonderful news if you’re looking to sell your salon. With an upward swing over the last five years, the time to sell your salon is now. To begin the selling process, you must first obtain a proper business valuation. For advice on how to value a beauty salon in the Boston area, rely on Sunbelt Business Brokers of Boston and Providence.
Steps to Value a Beauty Salon
According to IBISWorld, the beauty salon industry has an annual growth rate of 1.8 percent. To take advantage of the industry’s performance, follow these guidelines.
Beauty Salon Indications of Value
The beauty industry is one of the largest service-based businesses. With success largely coming from customer experience and clientele, you’ll need to analyze the performance of your salon. Three telling factors of success in a salon are having:
- A loyal customer base;
- Licensed employees; and
- Accessibility to consumers.
If your salon does particularly well in these areas, you can count on receiving a higher asking price.
In addition to these success factors, you should also consider other comparable salons and businesses in the surrounding Boston and Providence areas. Research similar Boston beauty salons that are also listed for sale and read online reviews and ratings. Analyzing the current market will help you arrive at an appropriate asking price. Looking at similar businesses can also give you ideas on what you could improve upon to arrive at a better valuation.
Calculating Value
When valuing your beauty salon, business appraisers will consider your business’ cash flow, risk, and goodwill. Ultimately, a business buyer is looking for listings that have high cash flow and low risk. Though the above indications of value are a great place to begin the valuation process, it’s always best to obtain a broker’s opinion of value (BOV). While a BOV isn’t a formal business valuation, a professional business broker can provide a reasonable Most Probable Sales Price (MPSP) range.
To obtain a BOV in from a Boston-based broker, visit our valuations page here.
Contact Business Brokers in Boston and Providence
If you’ve decided it’s time to sell your Boston or Providence-area beauty salon, enlist help from the professionals at Sunbelt Business Brokers of Boston and Providence! With over 30 years of experience and knowledge of your local marketplace, we’re experts in valuations and business buying and selling services. Contact us today for professional, local advice on any business transaction from start to finish.
