By purchasing an existing beauty salon you save on the initial start-up costs that accompany a new business venture.
Not only do you purchase the already existing client base, the existing beauty salon will already have cash flow available.
Once you have found the beauty salon business you want to buy, you need to initiate and complete the sale.
Step 1: Provide a letter of intent and / or Non Disclosure Agreement. This is a non-binding business agreement that allows you to have a look at the confidential business information such as the financials. It would normally include the proposed purchase price, the terms of the sale and the initial items to be included in the proposed sale.
Step 2: Sign a confidentiality agreement also called an Non Disclosure Agreement. This legally binding agreement guarantees that you will not disclose the details of the sale, the location or the name of the beauty salon or any of the financial details until the purchase is complete.
Step 3: Reviewing the financial statements. The financial statements should include three to five years of history if available. But most important are the current and most recent financial statements. Make sure the financials are being provided by a CPA or certified by an CPA and not only by the business owner. Typical financial documents normally include profit and loss statements, current inventory listing, valuations and tax returns.
Step 4: Find out what contracts and leases exist with the business if any. You may need to assume an existing lease or negotiate a new lease with the landlord. Also find out if there are any contracts that you will be liable to complete after the sale is over.
Step 5: You will need to apply for any licenses and permits that is needed. It is your responsibility to find out what legal requirements are needed for you to own and operate the beauty salon business. For a beauty salon, you may need to register the salon with the state. Typically, any staff working for you might also be required to have their own licenses. Talk with an attorney if you have any questions about due diligence or any legal requirements you need to meet.
Step 6: Obtain and Secure financing if needed. Before you can buy the beauty salon you will need to have your finances secured. If you are financing the purchase of the beauty salon through a bank, the bank will provide you with the necessary financial and bank legal documentation to finalize the sale. You will need a bank check also called an cashier's check from your bank if you plan to buy the business without financing.
Step 7: Attend the contract closing. The sale of the beauty salon business is completed when all the necessary closing documents have been signed by all the parties involved in the sale. This is usually scheduled by a business broker or closing attorney.
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