If you’re thinking of buying your own Hair Salon, Beauty Salon or Nail Salon, it pays to seek legal advice from a solicitor who specialises in business transfers and who understands the ins and outs of your industry.
The prospect of owning your own salon business is an exciting one and owning your own Hair Salon, Beauty Salon or Nail Salon can be hugely rewarding if you’re prepared to put in the hard work. However, there are important considerations to take into account before you take the plunge. Whether you want to set up an independent salon business or are thinking of buying a salon franchise, you do need to be sure that you fully understand what is involved before you commit, or you could end up out of pocket and with your dreams in tatters.
Truelegal: Specialist business purchase solicitors acting for Salon businesses
Truelegal specialises solely in acting for buyers and sellers of businesses across England and Wales, including those purchasing salon businesses such as Hair Salons, Beauty Salons and Nail Salons. Our expertise and experience in this area means that we can offer you great value, no-nonsense, practical advice that gets straight to the point, helping to ensure that you make the right choices.
We understand that owning your own Hair Salon, Beauty Salon or Nail Salon is a huge personal undertaking – your finances and your reputation are at stake. Our role is to help give you the best possible chance of success.
We set out here some of the things to think about when buying your Hair Salon, Beauty Salon or Nail Salon:
The benefits of buying a franchised salon:
- A reputable and recognised business name
- Support, advice and training provided
- Existing client base
- Proven business model
- Better deals with suppliers
- Latest-cutting edge products and treatments
The benefits of buying an independent salon business:
- Master of your own financial destiny
- Personal reputation
- Lower start-up costs
- No requirement to pay ongoing royalties
- Freedom to choose your own operating procedures, products and treatments
- Easier to sell if your life plans change
There are pros and cons to both business models which should be carefully explored. Whether you decide to buy an independent Hair Salon, Beauty Salon or Nail Salon, or to buy a franchised salon, Truelegal have the knowledge and expertise necessary to ensure that fully understand the implications of your business decisions and achieve the best possible deal.
1. General website listings – there are many of these on the web. We’ve compiled a database of the better ones – please send us a query through our contact form and we’ll email you a copy to point you in the right direction.
2. Business Transfer Agents – we deal with selling agents in our day-to-day dealings and are happy to recommend ones we think are the most professional – send us a query through our contact form and we’ll put you in touch.
3. Franchise directory – you can find UK franchise directories on the web. You could also search the websites of particular salon names that you are interested in to see if they have any current franchise opportunities.
Once you have found a potential Salon or a short list, do spend some time understanding what is involved in the legal process of buying such a business. Make sure you find a solicitor who has experience of small business purchases or, best of all, a firm like Truelegal, solicitors with specific salon buying experience.
1. Location – Is there plenty of passing traffic? What are the demographics of the area? What other neighbouring shops and amenities are there? Is there free parking? Are there any town planning proposals in the pipeline? Is there any local competition?
2. Fair price? – Will your salon business provide a sustainable return (allowing for running costs) that will enable you to pay off the purchase price within a few years? Does it already have a good reputation and a strong client base? Is there potential for growth or an extension of hours of business? Are there any equipment leases, bank loans or overdrafts?
3. Legal considerations – Licences, insurance and leases. If you don’t read the small-print of your licence agreement, insurance terms or lease, you may find yourself stung for unexpected costs or trapped in an unfavourable contract that could endanger the long-term viability of your business.
4. Legal structure – Should you set up as a sole proprietor, partnership, or a limited liability company or partnership? The legal structure of your business will have implications for its future development.
5. Staff – Will you need to take on existing staff or establish your own team? Is the knowledge or expertise of the existing proprietor or staff essential to the success of the business?
These are just some of the factors to consider when buying a Hair Salon, Beauty Salon or Nail Salon. A solicitor with specialist expertise in business transfers, like Truelegal, will help guide you through the process, give you the confidence to make informed decisions and ensure that you don’t make costly mistakes.
Truelegal has acted as a solicitor and advisor to many would-be salon owners, including those who want to set up a new salon, those who wish to purchase an existing independent salon and those who wish to become salon franchisees.
Buying a salon business is more complicated than buying a house. Your local high street solicitor who acted on the conveyance of your house won’t have the necessary expertise to give you the best advice in the purchase of your salon business – or may charge you twice as much to allow for the extra time it takes to research best practice.
As a solicitors firm with specialist business transfer expertise, we know our way around the documentation and process and can help protect you from common pitfalls and costly delays and mistakes. What’s more, we have close links with a number of other professional advisors, including accountants and business transfer agents, all of which helps to ensure that the process runs as smoothly as possible.
Once you have found your target salon you need to agree a deal price and structure, which is usually summarised in a Heads of Terms or Memorandum of Sale. Even though this document often expressly states it is not legally binding, there can be significant value gained from using a specialist solicitor to structure your purchase deal memo or to review the one provided by the agent. Make sure you appoint, or at least talk to, a solicitor before you sign even a non-binding Heads of Terms or Memo of Sale.
Due diligence – this is the investigatory stage of the process where as a prudent buyer you seek to establish what you are buying. Clever buyers will work closely with their legal advisors at this stage to ask the right questions of the seller and review the business data and documentation. The experienced salon purchase solicitor will manage this process efficiently and to your advantage. Truelegal makes full use of virtual datarooms for due diligence which greatly enhances speed, transparency, efficiency and traceability. We have found that salon buyers using our buying process then have the full business, legal, financial and staff documentation efficiently stored electronically for future use when running the salon.
The business purchase or sale agreement is the key document, together with the Lease and Lease Transfer (Licence to Assign) documentation. Your solicitor needs to make sure that the right warranties and indemnities are included to protect your investment. It is essential you understand what you are agreeing to, particularly in relation to the lease obligations (for example, repairing obligations).
Alongside the main agreements there will be other issues where advice is required. A prime example is dealing with employed and temporary staff. Where are you buying the business goodwill, you will need to become very familiar with TUPE legislation which has a number of pitfalls for ill-advised buyers. Another area where salon buyers often come unstuck is in underestimating the process of getting consent from landlords to the transfer of the property leases, equipment leases or bank loans and overdrafts. It is important to prioritise the obtaining of such consents at an early stage and Truelegal can help you do this.
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The sooner we become involved in the process of helping you to buy your nail salon, hair salon or beauty salon business the more likely it is that your purchase will be successful, so please contact us today.
Our full contact details can be found on our Contact Us page.
We look forward to hearing from you.