- Posted by Dan Doran
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- business appraisal salons, business valuation salons
Business Valuations for Salons
While is might seem like it should be straight forward, business valuations for salons can be complicated. Each salon business is different – with a different type of clientele, a different business model, and different factors that drive sales.
Quantive’s valuation professionals are very experienced in performing business valuations for salons and other beauty / wellness businesses. Our professionals will take the time to understand your particular business and factor in the particular items that create value in your business.
Who We Work With
Quantive has worked with a wide range of businesses in the beauty and salon business:
- Day Spas
- Nail Salons
- High End Beauty Businesses
- Many others
How We Calculate Value for Salons
Typically we will rely on one (or more) of the following methods for our calculations. Each business and situation is different – Quantive will typically look to each of the below methods and determine which is most appropriate for the subject business.
- Asset Based Approach - What is the net worth of the physical assets of the business?
- Market Approach - How does the salon compare to other salons that have sold?
- Income Approach - What is the value of the ongoing “benefit stream” of your company?
Rules of Thumb for Salon Valuations
One quick way to understand value is to use a “rule of thumb.” Below are some of the rules for the beauty industry. They are probably not accurate for your businesses – they don’t take into account any of the things that make your business unique -but you might find them slightly useful. Remember, a professional valuation gets to your number.
- 35 percent annual revenue and fixtures, equipment and inventory
- 2 times SDE plus inventory
- 4 times monthly sales plus inventory
- 2.5 times EBIT