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 clientelle, 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 beathy and salon business:
- Day Spas
- Nail Salons
- High End Beauty Businesses
- Many others
Talk to a Pro. We're always happy to answer questions as well. Give us a call at 888-827-1624 for a free consult.
Considerations for Manufacturing Business Valuations
Our professionals will try to get an understanding of the "big picture" that drives your business, but some of the unique aspects in business valuations for manufacturers include:
- The beauty and salon industry includes about 86,000 establishments (82,000 beauty salons; 4,000 barber shops) with combined annual revenue of about $20 billion.
- The average salon occupies between 1,500 and 5,000 square feet. How do lease terms effect the business?
- Understanding if the salon is a booth rental business or not is critical
- Are there any changing demographics that are impacting the salon?
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
Our professional are Certified Valuation Analysts (CVA's), certified by the National Association of Certified Valuation Analysts. The CVA requires a rigourous testing process, years of practical experience, as well as peer review of reports.