Business Overview

TRANSWORLD BUSINESS ADVISORS OF HOUSTON. LISTING REF: 76931-963929

Well-established and recently renovated hair salon with over 11 years in operations at the same location. The owner has operated in this highly sought out and desirable location with 3 other employees that were earning payments on a commission-based format. In 2019, the owner decided to undergo a major renovation in the salon, spending close to $125,000. The new layout incorporated a new spa room and a private nail room. As part of this reform, the owner intended to change the format of the operations to a rental model where she intended to rent 4 chairs, 1 spa room, and 1 nail room to various types of beauty specialists. The owner also invested nearly $5,000 in developing an amazing website to promote the business. Unfortunately, COVID-19 came and she couldn’t complete her plans. In addition, personal reasons require her to be in Europe for longer periods of time, so she is looking to sell the salon.
The hair salon’s design is highly influenced by a New York-style that has modern comforts, yet still holds a quality of ingenuity. The owner is a very created stylist and fashionista that is always looking to provide the highest quality service to its customers. This mentality has allowed her to stay in business for 11 years generating consistent profitability. The hair salon has been recognized by several magazines in Houston over the years, which increased clientele and a level of loyalty among its customers. Currently, the salon has 4 stars review in Google with very positive feedback.

Financial

  • Asking Price: $100,000
  • Cash Flow: $61,480
  • Gross Revenue: $114,000
  • EBITDA: N/A
  • FF&E: $65,000
  • Inventory: $5,000
  • Inventory Included: Yes
  • Established: 2010

Detailed Information

  • Property Owned or Leased:N/A
  • Property Included:N/A
  • Building Square Footage:980
  • Lot Size:N/A
  • Total Number of Employees:6
  • Furniture, Fixtures and Equipment:N/A
Is Support & Training Included:

2 weeks

Purpose For Selling:

relocation

Additional Info

The company was founded in 2010, making the business 12 years old.
The deal will include inventory valued at $5,000, which is included in the requested price.

The business has 6 employees and resides in a building with estimated square footage of 980 sq ft.
The real estate is leased by the business for $3,430 per Month

Why is the Current Owner Selling The Business?

There are all types of reasons people choose to sell operating businesses. Nonetheless, the genuine factor and the one they say to you may be 2 totally different things. As an example, they may say "I have a lot of various obligations" or "I am retiring". For lots of sellers, these factors are valid. However, for some, these may just be reasons to attempt to conceal the reality of changing demographics, increased competition, current decrease in earnings, or a variety of various other reasons. This is why it is very crucial that you not depend absolutely on a seller's word, however rather, make use of the seller's answer along with your total due diligence. This will paint a much more realistic picture of the business's existing circumstance.

Existing Debts and Future Obligations

If the current entity is in debt, which many companies are, then you will certainly need to consider this when valuating/preparing your deal. Numerous companies finance loans in order to cover items such as supplies, payroll, accounts payable, etc. Bear in mind that in some cases this can indicate that earnings margins are too small. Many organisations come under a revolving door of taking on debt as a way to pay back various other loans. Along with debts, there may also be future commitments to think about. There might be an outstanding lease on tools or the structure where the business resides. The business may have existing agreements with suppliers that must be met or may cause fines if terminated early.

Understanding the Customer Base, Competition and Area Demographics

How do companies in the area attract brand-new consumers? Many times, businesses have repeat clients, which form the core of their everyday revenues. Particular factors such as brand-new competition sprouting up around the location, road construction, and also employee turn over can affect repeat customers and also adversely affect future earnings. One vital thing to consider is the area of the business. Is it in a highly trafficked shopping center, or is it hidden from the main road? Obviously, the more people that see the business regularly, the better the chance to build a returning client base. A last thought is the basic area demographics. Is the business situated in a largely populated city, or is it located on the edge of town? Just how might the local median family income effect future income potential?