How to Sell Your Salon – By Uncovering the Hidden Value

by | Jul 12, 2021 | The Smell of Success

Marnie here,
When I sold my first salon business, I got a fat six figures for it.
Now, for most owners of a typical hair or beauty salon, that seems like an awful lot of money to ask. And it is, but I was able to get it because I’d uncovered some hidden value that your garden-variety business broker or accountant wouldn’t even think to look for.
Let alone your well-meaning friends and family.
I was reminded of this when I took a phone call from one of our Members the other day.
“I’m going to put my salon on the market,” she said. “I’ve worked hard for five years, it’s time to start a family.”
So, I asked, is the business ready for sale? 
“I think so. I take a good salary, we have great products, lots of regular clients, and the salon looks wonderful and it’s in a great location…”
But when I started asking questions, I could tell from the tone of her replies that this was going to be a disappointing conversation for her.
And that’s because there’s a gaping difference between what the owner of a business thinks has value, and what an astute prospective buyer thinks is valuable.
(And I use the word ‘astute’ with caution. With stars in their eyes, many a beauty therapist or stylist on the hunt for their own business will fall in love with the ‘pretty’ surface and fail to look at what really matters.)
First, the ‘standard’ way to value a business.
Financials (obviously). 
 
An accountant will look at a business the way accountants do, with a calculator, analysing past performance, profit and loss, assets and liabilities, and come up with a ‘valuation’ for you based on those bare essentials. 
Valid, certainly, but extremely limited, and limiting. Past performance is only half of the story. 
 
Stock, fixtures and fittings and shop lease (again, obviously) 
 
Yes, they may have some value. But have you ever tried to sell second-hand furniture? It’s worth next to nothing. Retail products? 
You’ll need to be a very good salesperson to get anything like what you paid for it. And an astute buyer will screw you down on the remaining term of the shop lease, knowing you’re legally obliged unless they’re prepared to have the lease assigned to them. 
 
Then there’s that hoary old chestnut, 
 
Goodwill. 
 
It’s just air. Business vendors will, usually on the advice of their accountant/broker/business coach, attempt to ascribe a dollar value to that most intangible of intangibles, the ‘goodwill’ or loyalty of the customers to the business. 
These days, there is little or no loyalty. And buyers know it. Don’t even think about trying to pull that one over them. 
 
Now to the stuff you haven’t thought about, and certainly your accountant hasn’t….
Your database. 
 
By far the most valuable, most measurable part of your business is your list. 
Your list of clients, customers and prospective customers held in an orderly, well-maintained electronic database containing not only their full contact details (name, email address, phone number, and most importantly, physical mailing address) but their spending habits and booking frequency. 
 
This is the gold. This is the thing that a buyer can look at and determine with reasonable accuracy the current health of the business, and its potential, given a more robust and refined marketing program. 
If your software program is set up correctly, a prospective buyer will also be able to determine what marketing information you’ve been sending out to that database, and its responsiveness. 
 
Your list has a strategic value in and of itself. If I were buying a salon, it’s the first thing I’d look at, not the financials of the business. I’d then put that list alongside the financials, and try to find cause and effect. 
 
Then I’d take a very close look at the thing that really matters…

Your marketing infrastructure, both online and offline.

The second most important, most valuable, and easily the most measurable asset of any local business like a hair or beauty salon is…drum roll please…your online presence.

Thanks to technology, an astute buyer will demand your Google logins.

Why? Give me your Google account logins and within one minute I’ll be able to tell exactly how many phone calls and website visits you’ve had in the last 30 days or 90 days from people searching for a hair salon or a beauty salon in your area.
Here’s an example; the Google Insights figures for one of our Member salons, in a suburb of Melbourne….

Do you get this many phone calls?
It shows that this salon received 346 phone calls in the last 30 days from people who had Googled a hair salon in that suburb, and called the business using the ‘click to call’ function provided by Google.
Think about that; three hundred and forty six phone calls, just from people finding the salon in a Google search. 
In addition, the salon received 511 clicks through to its website from the Google Plus listing in search results, which would have produced another raft of phone calls.
Does your website get this many visits?

This is important, value-adding stuff.

For a prospective buyer, it is proof that the investment put into online marketing by this salon owner is paying off in easily-measured numbers.

It means I, the buyer, can count on getting a steady stream of appointment-producing phone calls. And that means sales, and profits.
And that means you can put a defined value on that online presence, quite apart and separate from any valuation your accountant might put on past revenue and profit.
(You should also know – and Google provides the tools to find this out – how many people are searching online for a hair stylist or beauty therapist in your area in any one month period.)

Your presence in social media also matters, though not to the extent that Google ranking does. How many Facebook fans you have, how many Instagram followers you have, matters in that it gives a buyer a sense of how active and productive you are on social media.

But don’t be fooled, or try to fool – Facebook and Instagram followers are not customers. They’re just fans.

People who actually call your business are customers (or potential customers).
So yes, financials and balance sheets matter.

But smart buyers know they’re only part of the story. And they are past history. The only figures that can give me a picture of the future are those produced by the marketing metrics above.

If you don’t know what your marketing metrics are, then you – and the buyer – are floundering in the dark.
Those crucial figures – proven phone calls, your Google ranking, the size and quality of your database of clients, and yes, to some extent your social media engagement and activity, can all be presented as adding extra value to your salon when it comes time to sell.
Okay, so what to do now?
First, take a look at your website using our FREE website analyser. Just type in your website address and our analyser will tell you how many errors there are…and you’ll get a FREE report on what they are and how to fix them.

So yes, financials and balance sheets matter. 
But smart buyers know they’re only part of the story. And they are past history. The only figures that can give me a picture of the future are those produced by the marketing metrics above. 
 
If you don’t know what your marketing metrics are, then you – and the buyer – are floundering in the dark.
Those crucial figures – proven phone calls, your Google ranking, the size and quality of your database of clients, and yes, to some extent your social media engagement and activity, can all be presented as adding extra value to your salon when it comes time to sell. 
Okay, so what to do now? 
First, take a look at your website using our FREE website analyser. Just type in your website address and our analyser will tell you how many errors there are…and you’ll get a FREE report on what they are and how to fix them. 

Get your free copy of the Salon Business Plan Template here.

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Hair Salon Marketing Ideas: A Salon Owner’s Story – and How You Can Copy It…

by | Oct 4, 2019 | Ask the Experts, Motivating Salon Staff, Salon Seminars, The Smell of Success

Hair Salon Marketing Ideas: A Salon Owner’s Story – and How You Can Copy It…

In 1937, Napoleon Hill wrote one of the earliest ‘success formula’ best-sellers, Think and Grow Rich. I would have titled it ‘Think, ACT and Grow Rich’.

Thinking doesn’t achieve anything by itself. The world is full of educated derelicts. Only action makes a difference. Ghandi, Mandela, Martin Luther King didn’t achieve anything by thinking, they took action and got things done.

Which is why you should read on, because here is a story of action from one of our own Members.

Lisa has been featured here before. She attended one of our Road to Riches marketing and business education seminars, and her life and business was revolutionized overnight.

Here is Lisa’s story, as emailed to me this week.

“Thank you for the wonderful support that you and the team so generously give to me.

When I look back at the way I used to let my business set my mood and how, if the staff were bickering, I would lie awake worrying that some one might leave”.

“I can’t believe the personal growth I have had in just six months alone. I would never have believed you if you told me that the way I am feeling now would happen back in July when I signed that credit card slip, joined the Inner Circle program and drove home with the Toolkit.

“Truth is I felt trapped by my own career, knowing full well that I certainly did not want to go back to working for a boss who was drowning like I was.

Thinking what I could do instead, when I love this industry (give or take a few peacocks), hair dressers are my kind of people. This industry needs help in so many ways.

“For my part I wanted to grow my business so that I stopped feeling physically sick when things went wrong at work. In just six months I have become a great boss. I have the Christmas cards from my team to prove it.
“I am learning about what my staff want and need in order to thrive in a working environment and thus return me good money on my investment. (Those I employ)

Since I attended that conference and joined your program 3 staff members in a team of 5 no longer work here, they have been replaced by passionate people and everything has improved for the better.

“Together my sales have improved consistently, over $60,000 in the same 6 month time frame and I now know where it is I want to be and what is I need to be working on.  I have the best team of hairstylists (4 of them a mere 18 years of age) and now I have the knowledge and direction that will see me continue on this successful journey.

“I have things on the go now that keep me awake with excitement. That is how I felt 8 years ago when I opened my own business, however I lost my way somewhere along the way.

“I am on the floor cutting only for two 4 hour sessions a week, to keep the loyal clients happy and I love it. And that sick feeling that comes along when something hits that’s GONE!”

 

 

Your salon and the Gordon Ramsay factor

Your salon and the Gordon Ramsay factor

by | Sep 29, 2019 | The Smell of Success

(Read To The End for a Special $295 Free Bonus)

Marnie here, 
The other night I was flicking through the TV channels and found yet another re-run of Gordon Ramsay’s “Hell’s Kitchen.” 
Whenever I watch Gordon Ramsay tearing the throat out of a hapless head chef or muddle-headed restaurant owner, I wish I was in the food business.
Every restaurateur with even half a brain must surely be spending at least part of every working day down on bended knee, giving heartfelt thanks for the f***ing marketing opportunity this foul-mouthed and charismatic Brit has provided.
What Ramsay has done is focus the attention of millions of restaurant-goers on the stuff most restaurants would hate them to know – what goes on in the kitchen!
And for the smart ones, that spells opportunity. 
 
Now, what has this got to do with a salon business? Think outside the square for a moment. 
 
Here’s how I would use the ‘Ramsay Factor’ in my restaurant business.
First, I would identify what it is about restaurants that – thanks to Ramsay’s TV show – makes people lie awake at 3am, staring at the ceiling….and thanks to Ramsay, that’s pretty easy. 
Has the food been prepared days earlier? Is the kitchen crawling with cockroaches? Do the chefs wash their hands every time they go to the bathroom? Are the ingredients fresh? Is there mold growing over the food?  
 
THEN…I would create a new marketing message, based on those fears and anxieties. 
The DUMB thing would be to attempt to bury your head in the sand and ignore the Ramsay factor. In fact, I would HIGHLIGHT the negatives, and turn them into positives. For example, a promotion like this: 

 

Can you see how that statement would set my restaurant apart from any of my competitors? This technique is called  

It does TWO clearly distinct things.
a) By capitalizing on highly-public information (people are already talking about Gordon Ramsay) it enters the conversation that’s already going on in your customers’ heads.
(…so you don’t have to interrupt what they’re thinking…you’re just joining in the conversation, and ‘leveraging’ off what’s currently water-cooler talk.)
b) It highlights the process. Most businesses assume their customers are only interested in the result, the final product.
But there is magic in the detail….there is MONEY in the story of how you deliver what your customers are buying.
Now, if you haven’t done so already, replace restaurant with salon. What can YOU do to tell the story of your process? – a story that addresses what your customers are fearful and anxious about when making a decision about whether to do business with you?
Are your products sourced using a suddenly rediscovered formula developed by primitive tribes in the steamy jungles of Burma?
Does one of your treatments originate from the desert rituals of Bedouin tribes in ancient Mesopotamia? (I’m exaggerating for effect, but you get the picture.)
There are tons of ways you can be telling your “behind the scenes” stories. 
* Instagram is a great platform for that. Photos and videos showing you and your team doing things like (for example) preparing color, or getting a treatment room ready, even such seemingly bland tasks as cleaning, give a sense of “making the invisible visible”. 
* Same can be said for Facebook…so much of what I see on these social media platforms is so “me-too”, just copying everything everyone else is doing. 
* On your YouTube Channel – quirky short videos that you can also use on social media. 
* On your own website (hint: just ‘re-purpose’ content you’ve used on the other platforms.) 
Speaking of your website, is it producing a CONSTANT, steady stream of new inquiries, bookings and leads for you? 
It should be, IF it’s been set up correctly. My team of specialists here at Worldwide Salon Marketing have built more than 500 websites for salons & spas all over the world, and they’ve identified THREE key factors that turn an ordinary website into a really extraordinary cash-generating machine. 
Here’s how to check yours out (for free) and see if it contains any errors that could be preventing it from sending you the flow of business you want. 
PLUS, you’ll get a FREE, comprehensive Audit Report from my team of technical & marketing experts (Valued at $295) on the simple changes you can make to get your website generating more business for you instantly. 
Be my guest, but please be quick!
My team can only do FIVE of these free diagnostic checks for my subscribers – each analysis takes at least two hours – so it’s first in, best dressed:-) 
I hope you can use some of the tips above…
Take care. 
xxoo
[VIDEO] Salon Marketing in Canada – how this salon doubled sales in 3 months

[VIDEO] Salon Marketing in Canada – how this salon doubled sales in 3 months

by | Aug 28, 2019 | Advertising Tips, Canada, Featured, Marketing Superstars, The Right Mindset, The Smell of Success

Listen to  Amber Ahmed, of Amber Esthetics Spa in Montreal, Canada. Amber joined Worldwide Salon Marketing’s Client Attraction System program and in the next three months her sales literally more than doubled as she rolled out the direct mail campaigns, in-salon promotions and online marketing systems.

Take a look as Amber talks about how she ramped up sales so dramatically – and takes us on a quick video tour of her newly-built spa in the heart of Montreal….

 

What I Wish I Had Known When I Started … (Part One)

What I Wish I Had Known When I Started … (Part One)

by | Aug 22, 2019 | The Smell of Success

Marnie here…

Isn’t it interesting how our failures become our greatest teachers?
My biggest failures were the most shameful, isolating and downright revolting experiences of my life. They were also my biggest lessons. I chose to LEARN from them. Every challenge that ever presented I chose to seek a lesson from.
I – and possibly you too:-) went into business for myself, knowing I was pretty darn good at most beauty treatments – I’ll just hire the staff for the treatments I’m no good at / don’t like, and honestly, I just wanted to work for myself. Wasn’t it meant to be all roses and happiness owning a business?!

 

I’ve decided to swallow my pride and share some of them with you.

 

If there is one thing I have truly learned from my coaching clients, industry colleagues, Salon Mavens Facebook group members and the messages I receive daily (and have received over the last 10 years) 
 
… I was not actually alone. 
 
Yet I didn’t know this in the early days. Social media wasn’t big when I first started out. I didn’t tell a lot of people what I was going through. I thought it meant something was wrong with ME that this shit was happening.  I was ashamed. I was failing BADLY and FAST! (didn’t THAT bring up childhood issues !!). 
 
So many others have gone through so many of the same issues and failings I experienced. 
 
Staff issues; pouring your hard earned cash and soul into training them, only for them to rip your heart out when they leave with half your clientele and some of your product, or costing you 1000’s in legal fees thinking they could sue the pants of you and be set for life…
(Obviously watching too many U.S drama shows) big marketing promises with expenses that could feed a 3rd world village, which in turn brought NOTHING in.) 
Theft, burglary, weird-ass clients requiring police attendance (twice this happened, and one had assaulted me badly). 
 
SO Here it is: 
My first salon, my most shameful, horrific failure experience, (which I NEVER talk about really), was in a quaint old 2 storey premises. 
The lady who sold it to us also sold us our home. So I trusted her. She didn’t know the truth of it either though. 
 
Long story short, I bought a little bit of a salon, A LOT of brothel
The owner and a side kick were turning tricks upstairs “massaging” whilst the other staff did the beauty treatments downstairs.
Not only did she take her “massage clientele” and half the other salon clients with her within the first month…
… I was left with a massive debt on the mortgage, no money coming in (as I wasn’t well versed in the, erm, massage world)  and no way to pay the bills.
We bought a second salon (hey it seemed like the right move at the time).
Within 10 months we had lost our house. Our marriage was in tatters. We couldn’t sue her as we didn’t have $60k to start the process.
Stay tuned for my next post  to see how I managed this disaster and was able to  easily learn and implant systems and marketing projects that turned my salon’s average weekly income to $17,000 a week (yup, I’m super proud of those failures becoming my biggest teachers for my best successes!).

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How to Market a Barber Shop

by | Sep 17, 2018 | Australia, Featured, The Smell of Success

John Abbott of Abbotts Barber Shop in Brisbane 

Over the years I’ve had many business owners come to me for marketing guidance and ask “give me a way to find a hundred new customers” or words to that effect.
 
And I always tell them “There is no ONE way to get a hundred new customers. There’s a hundred ways to get ONE new customer, and you’ve gotta use all of ’em.”
 
Having said that, if there was one piece of advice that stands out above all others, it comes down to taking Massive Action.
 
Like John Abbott, a member of my Private Client consulting group. John owns a traditional, old-style barber shop (opened in 1935) in the suburbs of Brisbane. His sales were falling dramatically, down 17% year on year.
 
So we put together a plan, and to his credit, John got out of his comfort zone and took the action required. Here’s how he describes the results…