In today’s episode, I’m going to focus on the benefits of a valuation when determining the value of what is typically the salon owner’s largest asset: their interest in their salon business. Ultimately, to have a successful hair salon exit plan, the result has to be that you, the salon owner, exit your salon business with enough money to meet your future needs.
Now, there are many reasons why you as a hair salon owner may want to exit your current business, whether it’s retirement, or you want to try something different, or you’re simply wanting more time for family and friends. But one of the first steps in any exit plan is getting an accurate estimate of your salon’s value.
So, I’m going to discuss some important considerations to think about before deciding on whether or not a business valuation is right for you. These thoughts will range from the proper timing of your sale to the salon’s current financial position and outlook.
The goal of discussing these topics today is to help hair salon owners better understand what would be most valuable and helpful for them when it comes to their exit plan.
As a CERTIFIED FINANCIAL PLANNER™, an initial step in working with our salon owner clients is to quantify the value of their assets as well as their financial needs following the sale or transfer of their business. Once we’re able to quantify each of these with the salon owner, we can then determine whether there’s a gap between the two.
And if a gap does exist, well then, our next step is to create a plan to close that gap. But assessing this gap is crucial in creating a successful exit plan for you, the hair salon owner.
Episode Highlights
[03:10] Why any uncertainty about the value of your hair salon can drastically increase your chances of not having the money you need to retire successfully.
[04:12] How a salon valuation can provide you with key benchmarks to increase the value of your salon prior to your exit plan.
[04:39] The advantages and disadvantages of the two most common valuation methods.
Looking for more tips on how to grow, scale, and ultimately sell your hair salon business? Check out our other Unchained From the Chair podcast episodes.
