Interview with hair salon buyer
- Dann Richards, owner of Dann Richards Hair & Beauty
- Hair stylist since leaving school at 16
- Key tips:
- Check staff to footfall ratio; research word-of-mouth reputation
- Typical price range:
- Leasehold: £3,000-£500,000, typically around £30,000; freehold: £50,000-£750,000
On the length of the sales process...
"The ball was rolling really slowly and it only actually got decided last July. We opened in November, so it was only a few months.
"It wasn't long between deciding to buy and the contracts coming out and meetings with bank managers happening - four to five months I think."
On raising finance from the seller...
"I borrowed some from family, saved some myself and got a small business loan from a bank. But the bank would only match what I put in.
"I was quite lucky really: the business is being paid off monthly for four years. I wouldn't have had that opportunity anywhere else.
"Without that [seller finance] I couldn't have done it.
"It's all signed over to me - it's mine - but I'm just paying him [the seller] monthly rather than all in one go. It's understood that he has nothing to do with it.
"He still comes in because he still supplies my colour. So he's still around and I can always call him if I need to, and he's always said that. But he has no say, he's not a partner. It's as if I'd bought a mortgage."
Opening the salon was easier than I thought it would be
On refurbishing and reopening the premises...
"So I closed for 10 days for a refurb. We lifted the ceiling, we put new walls up, we changed the layout. We re-plumbed, redid the electrics and everything and that took longer than expected.
"It took 12 days instead of 10, which we didn't know until about day eight. So I had to push back my opening party and my first open day, fully booked with clients - and that was a nightmare, but people understood. So it was fine."
On the transformation from colleague to boss...
"The difference between me being a colleague to the girls and being their boss is interesting. I wasn't sure if they would go or stick around because some of them have been working at the Wacky Hair Company for longer than me, but just didn't have it in them to do it, so that's why they approached me first.
"But actually they were all really excited; I think they were getting a bit tired of working for the same company, things were getting a bit slack and they were looking forward to having someone their own age doing it.
"And I included them in the refurb a lot. The products we chose I really tried to include them as much as I could, which helped. So the transition was easier than I thought it would be in that respect. Opening the salon was easier than I thought it would be."
Tips for other hair salon buyers...
"Obviously you need to look at the accounts and see how busy they are, how many staff they have to how many clients. If they have way too many staff and they're not busy, that needs to change.
"You need to look into reputation of the salon because if things being said about it aren't good then don't bother. Because it is all word of mouth, it's all recommendation.
"If you're keeping staff then you need to make sure it has a good reputation to start with, because as much as rebranding helped me, we started with a good reputation. If we hadn't rebranded it and kept the staff I don't think it would have made a difference."
If you enjoyed this article, sign up for a *free* BusinessesForSale.com account to receive the latest small business advice, features, videos and listings directly to your inbox!