Questions to Ask When Buying a Hair Salon
This list is for anyone weighing the purchase of a working hair salon, whether you would run it from behind the chair or own it as an investment. The 52 questions are for the seller and, where there is one, the broker, and they follow the order a purchase usually takes: the sale itself, the books, the stylists, the clients, the premises and licenses, and the terms of the deal.
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The questions
Each question, and why to ask it
The sale
Why are you selling the salon, and why this year?
Why ask it
Tired hands after decades behind the chair, a move or a wish to stop managing people are all believable, and each can be checked later against what the stylists and the landlord tell you. The 'why this year' half matters more: a lease running out, a rent increase on the way or a senior stylist about to leave are reasons that come with a date.
Do you work behind the chair, and how much of the salon's revenue comes from your own clients?
Why ask it
An owner who performs a third of the services is selling a business that shrinks by about a third the day they leave, unless they stay on or their clients agree to move to someone else. Ask for the owner's own sales as a separate line on the stylist report, and if you do hair, work out how much of that chair your own clients would refill.
What exactly am I buying: the name and phone number, the booking account and social pages, the chairs, the stock?
Why ask it
Get the answer as a written list attached to the offer. The salon's name, its number and its booking link are how regulars find their way back, so they belong on that list ahead of the furniture, and it is worth asking what the owner means to take home: a favorite station, the artwork, their own shears and dryers.
What is the asking price based on: the earnings, the equipment, or what you put into the place?
Why ask it
What the owner spent on the build-out is not what the salon is worth to the next person. Ask for the earnings figure the price was built from and who calculated it, then have your own accountant rebuild that figure from the tax returns.
How many buyers have looked at the salon, and what stopped the ones who walked away?
Why ask it
Ask the broker the same thing separately and see whether the two versions agree. If someone withdrew after opening the books or meeting the landlord, ask what they saw. A listing that has been up for a year may also quote figures from before a stylist left, so ask which month the numbers stop at.
Who does the broker represent, and how is the broker paid?
Why ask it
Ask the broker directly, by email if you can. A broker engaged by the seller and paid a share of the sale price has a reason to see the deal close at a high number, so read the listing package as the seller's material. Ask too how many salons they have sold, since one who knows the trade should be able to get you stylist-by-stylist reports without a struggle.
The books
Can I see three years of tax returns next to the bank statements and the reports from the booking or point-of-sale system?
Why ask it
Three records made for three different readers should tell one story. Where the sales report shows more than the bank deposits, or the tax return shows less than both, ask the seller to walk you through the gap line by line.
How much of the salon's income is cash, and is every sale rung through the system?
Why ask it
Some sellers will say the salon earns more than the books show. Income that was never recorded cannot be checked and a lender is unlikely to count it, so base your offer on what the records support and treat the remark as a clue to how the rest of the books were kept.
How does the monthly income split between services, retail and booth rent?
Why ask it
These are three different businesses under one roof. Service sales depend on the stylists who perform them, retail depends on who recommends it at the chair, and rent arrives whether or not the renter had a good week. Ask for each as its own line across at least two years.
What is the average ticket, and how many appointments does the salon complete in a normal week?
Why ask it
Multiply the two and see whether you land near the weekly sales on the report. Then drop by on an ordinary weekday and count heads: a salon described as fully booked should not have half its chairs empty at eleven in the morning.
What did sales look like month by month over the last year, and which months are slow?
Why ask it
The busy weeks before weddings, school dances and the winter holidays, and the lull that follows them, fall differently in every town. You need the low months in numbers, because rent and payroll come due in those months too, and your loan payment will be a new bill on top.
What does the salon spend each month on rent, wages, color and backbar, card processing and software?
Why ask it
Ask for the supplier invoices and the payroll reports behind the totals, not only the profit and loss sheet. Color and backbar deserve a close look, since a product cost that swings from month to month can mean nobody is measuring what gets mixed.
Which of your personal expenses go through the salon, and what do you pay yourself?
Why ask it
Whatever the seller names, ask for the receipt or statement behind it before your accountant adds it back to the earnings. Then look at the other side: an owner who takes no wage for managing the salon, or pays themselves less commission than the other stylists get, is showing a profit that includes free labor you will have to supply or pay for.
How much is outstanding in gift cards, prepaid packages and memberships?
Why ask it
Have the balance pulled from the booking system on the day of the count, not quoted from memory. Those are cuts and colors the salon still has to deliver, so settle in the offer whether the amount comes off the price or the seller covers each one as it is redeemed. What happens to old unredeemed cards is set locally, which makes it a question for your accountant.
Does the salon owe anything: loans, equipment finance, supplier balances, unpaid wages or overdue taxes?
Why ask it
Get the list first, including commission and tips earned but not yet paid out, then ask which items will be cleared before closing. Whether an unpaid tax bill or a lien can follow the salon to a new owner depends on where you are and how the sale is structured, so have your attorney run the searches there instead of relying on the seller's word.
Stylists
Which stylists are employees and which rent a booth, and what is in writing with each one?
Why ask it
An employee's sales run through the salon and a renter's do not, so this split changes how to read every other answer about the team. Ask for the signed agreements themselves. Where the arrangements are verbal you inherit nothing but habits, and you will be handing new paperwork to people who have just had a change of boss.
How many stations are there, and how many sit empty in a normal week?
Why ask it
Empty chairs cut both ways. They are room to bring in your own stylists or renters without building anything, and they can also mean that people left or that the seller could not recruit. Ask how long each one has been empty and who sat in it last.
May I see each stylist's service sales, retail sales and rebooking for the past twelve months?
Why ask it
The report shows who carries the salon. If two chairs out of eight produce half the sales, those two people are most of what you are paying for. Renters often keep their own books, so expect the report to cover employees only.
Which stylists know the salon is for sale, and who do you expect to stay under a new owner?
Why ask it
Sellers usually keep a sale quiet, which makes the second half a guess until you can talk to the team yourself. Ask when you will be allowed to meet the top producers, and ask your attorney whether the offer can depend on that meeting.
How is each employee paid: commission rate, hourly minimum, tips, product charges and paid time off?
Why ask it
Take it per person from the payroll records, since long-serving stylists often have terms nobody else has. Then show the setup to a local accountant before you agree to continue it: the rules on commission pay, tip handling and charging stylists for product are made where the salon is.
What do the booth renters pay, what does their rent cover, and when does each agreement end?
Why ask it
Work out what the salon spends to supply each rented chair: towels, laundry, backbar, the front desk, a seat on the software. What is left of the rent after that is the income you are buying. Note the end dates as well, because a renter on a week-to-week arrangement can be gone before your first month closes.
Has any stylist signed a non-compete or an agreement not to take clients?
Why ask it
Ask to read them, and check whether each is with the owner personally or with the business, because that affects whether it comes to you. Whether such clauses hold up at all varies widely by state and country, so get a local attorney's view before you count on one. A stylist who wants to stay is worth more than one who is contractually stuck.
Which stylists have moved on in the past couple of years, and where do they work now?
Why ask it
Where they went says more than how many. A stylist who took a suite on the other side of town is a normal loss in this trade, while a group that left together for a salon nearby took clients along, and the stylist reports for the months either side of their leaving will show how many.
Has a tax or labor agency ever questioned whether your booth renters are really independent?
Why ask it
The tests for who counts as an independent contractor are set locally and they differ. Describe the real arrangement to an accountant or attorney there, including who sets the renters' hours and prices and who takes their payments, and ask what exposure a new owner would have.
Who runs the front desk, orders product and keeps the books, and how much of that is you?
Why ask it
Owners tend to hold a second, invisible job on top of the chair: payroll on Sunday night, the color order, covering the phone at lunch. List those tasks and decide for each whether you will do it, a current employee can, or you need to hire.
Have you promised anyone a raise, a rent freeze, a share of the business or the first chance to buy it?
Why ask it
Verbal promises appear in no report, and a stylist who was told they could buy in one day may be the person most upset by your arrival. Knowing ahead lets you decide whether to honor the promise, offer something in its place or talk to that person first.
Clients
Does the client list belong to the salon or to each stylist, and whose name is on the booking account?
Why ask it
Renters who run their own booking and card reader hold their own client records, and those were never the salon's to sell. For the salon's account, check that it is not in the owner's personal name, and ask the software company how a change of owner works and whether color formulas, appointment history and contact details all come across. Your attorney can tell you whether privacy or consent rules apply to handing over client details where you are.
How many different clients came in during the past twelve months, and how many came at least three times?
Why ask it
Ask for the report with the date range showing, sorted by number of visits. Someone who came once for a wedding updo is a name in the software; the people who are in every couple of months are the business, and their count is the one to weigh the price against.
How many of the regular clients see an employee, and how many see a booth renter or you?
Why ask it
Clients tend to follow a stylist before they follow a salon, so sort the regulars by whose chair they sit in. Employees' clients are the likeliest to stay with the business, a renter's clients go where the renter goes, and the seller's own are a third group whose future depends on the handover you agree.
Where do new clients come from: walk-ins, referrals, search, a booking app, or the stylists' own social accounts?
Why ask it
Walk-ins and people who found the salon by searching belong to the address and the listing, and a change of owner gives them no reason to stop. New clients who arrive through one stylist's personal page belong to that stylist and will follow the account wherever it goes.
When did service prices last go up, and does every stylist charge the same?
Why ask it
A price list untouched for years leaves you room, though you would be the one announcing the increase in your first months. Where prices differ by stylist or by level, ask who decides when someone moves up, because a new owner who changes that is changing people's pay.
How many clients rebook before they leave, and how full is the calendar for the next six weeks?
Why ask it
Open the calendar and look, stylist by stylist. Color clients on a regular cycle fill the weeks ahead in a way walk-in cuts never do, so a book that is solid for one stylist and blank for another shows whose chair the coming sales belong to.
How many no-shows and late cancellations do you get in a month, and do you ever charge the fee?
Why ask it
A two-hour color slot that goes empty cannot be sold later. Ask how many times the fee was charged last quarter: the number shows whether you inherit a working rule or will be introducing one to clients who have never paid it.
What do your worst reviews say, and are they about someone who still works here?
Why ask it
Read the last couple of years of reviews beforehand and bring the two or three that worry you. A complaint about a stylist who has left is history, while one about the front desk or the wait is about the salon you would own. While you are on the subject, find out which email address the business listing is registered to, because one tied to a former receptionist's personal account can be slow to recover.
Which nearby salons or suite buildings compete for the same clients and stylists, and has one opened lately?
Why ask it
A new suite building pulls stylists as much as clients, since it offers your best people a way to work for themselves. Ask whether anyone here has toured one, then drive the area and look at the price lists yourself.
Premises and licenses
How much time is left on the lease, what is the rent, and when does it next increase?
Why ask it
Ask for the lease itself with any amendments, not a summary. Hold the term against your loan: if the lease ends in two years with no option to renew, you could still be paying for a salon that has lost its address. Look for charges on top of base rent too, such as a share of the building's taxes and upkeep.
Will the landlord transfer the lease to me or write a new one, and have you asked?
Why ask it
Leases commonly need the landlord's consent before they pass to a buyer, and a landlord may use the moment to raise the rent or ask for a personal guarantee. Ask to speak to the landlord early, with the seller's permission, and ask your attorney about making the purchase depend on the lease.
Does the lease restrict what I can do with the space: the services, the hours, the signage, or renting chairs to others?
Why ask it
Depending on the wording, renting out a booth can count as subletting, so a plan to convert employee chairs to rental chairs needs checking against the lease. The same goes for adding nails, waxing or lash services, and for opening on a day the rest of the building is shut.
Which equipment does the salon own outright, and which is leased or financed?
Why ask it
Have the seller put the purchase receipt or the finance agreement beside each line of the equipment list. Anything on a rental contract, which in a salon can mean the card terminals, the washer and dryer or even the styling chairs, goes back to whoever owns it and should not be in the price. Where a lender has a claim on the equipment, your attorney can check that it is cleared before closing.
How old are the shampoo bowls, the water heater, the chairs and the dryers, and what has needed repair lately?
Why ask it
Plumbing is where salon repair bills tend to come from: a water heater too small for three bowls running at once, drains slowed by hair, a leak under the backwash. Run the hot water at every bowl during your visit and ask for the plumber's invoices from the last two years.
How much color, backbar and retail stock comes with the sale, and how will it be counted?
Why ask it
Agree a count on the day before closing, valued at what the seller paid, with opened tubes, discontinued shades and dusty retail left out or marked down. A stock figure written into the listing months ago tells you nothing about what will be on the shelves when you get the keys.
Do you have an agreement with a product line or distributor, and does it carry over to a new owner?
Why ask it
Some professional lines are sold only through approved salons, and some come with purchase minimums or display furniture on loan. Call the distributor's rep yourself to find out what a new owner has to do to keep the account, and ask how the salon's orders have trended while you are on the phone.
Which licenses and permits does the salon hold, and which can pass to a new owner?
Why ask it
Requirements for a salon establishment license, a business license, a sales tax registration and each stylist's own license are set by the state, province or city. Call the licensing board there and ask what a change of ownership requires and how long it takes, because in some places a salon cannot trade until a license is issued in the new owner's name.
When was the salon last inspected, and what did the report say?
Why ask it
Read the inspector's report, not the seller's summary of it. A note about sanitation, ventilation or someone working without a current license is cheap to fix once you know about it, while an open violation is something to have settled before the salon becomes yours.
What insurance does the salon carry, and has there been a claim or a complaint about a burn, a reaction or a fall?
Why ask it
A chemical burn, a reaction to color and a slip on a wet floor are the incidents a salon policy exists for, so ask for the insurer's claims history instead of the seller's memory. Find out too whether the renters carry their own liability cover and whether anyone checks the certificates.
The deal
Are you selling the salon's assets or the company that owns it?
Why ask it
The two routes treat old debts, the lease, the licenses and the stylists' employment differently, and which is usual depends on where you are. A seller will lean toward whichever leaves them with less tax and less to answer for afterward, so get your own attorney's and accountant's view before you agree to either.
How and when will the stylists and the clients be told?
Why ask it
Write the date and the order into the agreement so neither side announces early. The team comes before any client, because news in a salon travels from chair to chair, and a stylist who learns it from a client has reason to wonder what else went unsaid.
Will you stay on after closing, behind the chair, at the desk or only for introductions, and for how long?
Why ask it
Put the weeks, the days per week and the pay in the agreement. For a seller who does hair, ask what happens to their clients when the period ends: introduced one by one to a named stylist is a plan, and 'they will sort themselves out' is not.
Will you agree not to open, rent a chair or work at another salon nearby, and not to contact the clients, for a set period?
Why ask it
A seller with a full book can rent a suite a mile away and win much of it back. What distance and length of time a court will uphold varies by place, so let a local attorney write the clause, and be wary of a seller who resists any restriction at all.
Would you take part of the price later, tied to the stylists and the sales still being here after six months?
Why ask it
It turns the seller's forecast about who will stay into a risk the two of you share. Plenty of sellers want all their money at closing for reasons unrelated to the salon, so a no is not proof of trouble, but it is a fair moment to ask again what they expect to happen in the months after they go.
May I spend a full Saturday in the salon before I make an offer?
Why ask it
A Saturday shows the salon at full stretch: whether the desk keeps up with the phone and the door together, how long a color client sits processing before anyone checks on them, who folds towels between clients and who waits to be asked. If the sale is still confidential, agree with the seller beforehand how you will be introduced.
What should a new owner leave alone here for the first year?
Why ask it
Sellers know which arrangements hold the team in place: the stylist who has every Monday off, the color line half the staff trained on, the holiday party the owner pays for. You do not have to keep them all, but you should know which ones you are touching.
How to check a hair salon before you buy it
Practical guidance for the conversation itself
Before the first meeting
Go in as a client
Book a cut or a blowout as an ordinary client before the seller knows your name. You will see how the desk greets a stranger, how clean the stations are, whether anyone offers to rebook you and what the room sounds like when nobody is performing for a buyer.
Read the online booking page
If the salon takes bookings online, look at what is open this week for each stylist. One whose next free slot is three weeks off and another with gaps every afternoon show you who is carrying the place before you have seen a single report. Write it down and hold it against the stylist figures you are given later.
Expect a confidentiality agreement
Brokers and sellers normally ask for one before they release figures, because a rumor of a sale can unsettle stylists and clients alike. Read it, sign it if it is reasonable and keep to it: no questions to the staff until the seller agrees.
Line up your own advisers
You want an accountant who has read salon books before and an attorney who handles small business purchases and commercial leases in that area. The broker's package is a sales document, however tidy it looks.
Reading the numbers
Separate the three kinds of income
Put employee service sales, retail and booth rent in their own columns for each year. A salon that moved from employees to renters can show falling sales while its profit holds steady, and neither figure means much until you know which change you are looking at.
Take the owner's chair out
Subtract the seller's own service sales and see what remains. A stylist bringing a book of clients can add back what they realistically expect to bring, and an investor should add the cost of a manager instead.
Rebuild the earnings yourself
Start from the tax return, add back the personal costs the seller can document, then subtract a fair wage for the work the owner does unpaid. What is left is what the salon earns for an owner, and it is the number to hold against the asking price and your loan payment.
Treat stock and gift cards as adjustments
The inventory count is normally added to what you pay, and you can ask for unredeemed gift cards and prepaid packages to come off it. Settle the method for each in the offer so nobody is arguing over tubes of color on closing day.
Keeping stylists and clients through the handover
Meet the key stylists before the money is committed
Ask the seller to arrange it once your offer is accepted and before any deposit becomes non-refundable. You are not asking for promises, only finding out whether the people who produce most of the sales intend to be there.
Announce it together
Hold one meeting, with the seller and you in the same room, before any client hears. Say what is staying the same first: pay, rent, schedules, the product line.
Change little in the first months
New prices, new software and a new commission plan all at once give a stylist three reasons to take a call from the salon down the road. Pick the one change that matters most and leave the others until people know you.
Have the seller write to the clients
A short message in the seller's own name, introducing you and saying which stylists are staying, does more than any reopening offer. Agree the wording before closing, and check with your attorney how client contact details may be used where you are.
What should lower your offer or end the talks
Income you are asked to take on trust
Cash that was never recorded, a booking system the seller would prefer not to open, tax returns that are always 'with the accountant': each asks you to pay for something you cannot see. Offer on what is documented or not at all.
A lease nobody will let you read
The address is most of what a walk-in salon is. If the seller stalls on the lease or on an introduction to the landlord, stop spending money on advisers until that changes.
A salon that is one person's book
When the owner and one senior stylist account for most of the sales, you are buying two people's goodwill and some furniture. That can still be worth doing at a lower price with both of them committed in writing, but it is a different purchase from the one in the listing.
Arrangements that exist only as habits
No renter agreements, no record of who was promised what, a license in a name nobody recognizes. None of it is fatal alone, but together it means your first year goes on finding out what you bought.