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To Build or Buy? The Founderson Co. Guide on Entering the Salon Business

Updated: Nov 19, 2023

As the Chief Editor at Founderson Co., a leading business brokerage firm, I often encounter entrepreneurs grappling with a critical decision in the beauty industry: should they start a new salon from scratch or buy an existing one? This choice is far from straightforward and involves assessing various factors. In this article, we’ll explore the pros and cons of both approaches to help you make an informed decision.

To Build or Buy? The Founderson Co. Guide on Entering the Salon Business
To Build or Buy? The Founderson Co. Guide on Entering the Salon Business

Starting a New Salon: The Ground-Up Approach

  1. Creative Freedom and Branding: Starting anew means you have complete control over the salon’s concept, design, and branding. This creative freedom allows you to build a unique brand identity that resonates with your targeted clientele.

  2. Upfront Costs and Funding: Initial investments can be hefty. You’ll need to consider costs like leasing a space, interior design, purchasing equipment, and marketing. Securing funding can be challenging without a proven track record.

  3. Building Clientele: Attracting clients to a new business requires significant marketing efforts. Establishing a loyal customer base takes time and consistent quality service.

  4. Operational Challenges: New entrepreneurs might face a steep learning curve in managing operations, from hiring skilled staff to understanding the nuances of the beauty industry.

Buying an Established Salon: The Turnkey Solution

  1. Existing Clientele and Reputation: Purchasing an established salon means acquiring an existing customer base and benefiting from the salon's reputation. However, any negative reputation can also impact you.

  2. Immediate Cash Flow: An established salon can provide immediate cash flow. Financial records can offer insight into the business’s profitability and potential growth.

  3. Operational Systems in Place: Established salons usually have operational systems, suppliers, and staff in place, reducing the initial management load and operational hiccups.

  4. Costs and Valuation: The purchase price can be substantial, reflecting the salon’s current value, location, and profitability. It’s crucial to conduct thorough due diligence to ensure a fair valuation.

Evaluating the Options: Key Considerations

  1. Market Research: Understand the local market demand, competition, and customer preferences. Is there a gap in the market that your salon can fill, or is it oversaturated?

  2. Financial Analysis: Compare the costs involved in both scenarios. Starting a salon may have lower initial costs but higher long-term investments in building clientele and brand presence.

  3. Risk Tolerance: Evaluate your risk appetite. Starting a salon can be riskier but offers greater potential rewards. Buying an existing business is less risky but requires more capital upfront.

  4. Long-Term Goals: Consider your long-term vision for the salon. Are you looking to create a personal brand or simply seeking a profitable venture?

  5. Expert Consultation: Consult with industry experts, financial advisors, and brokers to gain insights and understand the intricacies of salon business transactions.

In the salon industry, there's no one-size-fits-all answer to whether it's better to buy an existing business or start from scratch. The decision largely depends on your financial capacity, business acumen, industry experience, and personal goals.

At Founderson Co., we recommend a thorough analysis of your situation and the market before taking the plunge. Whether you decide to buy an established salon or start a new one, the key to success lies in diligent planning, a clear understanding of the beauty industry, and a commitment to providing exceptional service.

Remember, in the beauty business, customer satisfaction and loyalty are the cornerstones of success. With the right approach and determination, you can make your mark in this vibrant and ever-evolving industry.


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