Buying a salon or barbershop in Florida

Salons, barbershops and spas sell personal services: haircuts and color, shaves, nails, skin care, waxing, massage, and the retail products that go with them. How the business is set up matters as much as the services. In an employee salon, stylists are on payroll, often paid a commission on the services they perform, and the owner controls scheduling, pricing and the client list. In a booth or suite rental salon, stylists rent a chair or room, set their own prices and keep their own clients, and the owner is essentially a landlord collecting weekly rent. Many salons mix the two.

Revenue comes from repeat clients who rebook every few weeks, plus retail sales. Spas add higher-priced services, packages and memberships. A typical salon has a front desk or online booking, several stylists or technicians, perhaps an assistant or two, a manager, and an owner who may also work behind the chair. Location matters: visibility, parking and a lease the business can afford.

• A large, loyal client base with high rebooking rates, and client records kept in the salon's own booking system rather than on stylists' phones.
• Stylists who have been there for years and aren't likely to leave with their clients. In this business, clients follow the person who does their hair.
• New clients arriving steadily from walk-ins, online booking and referrals, not only from stylists' own followings.
• A good lease in a visible spot with parking, and years left to run.
• Retail sales that add margin without a pile of unsold stock.
• Revenue spread across many providers, so one stylist leaving doesn't sink it.
• For spas, memberships or packages that bring clients back on a schedule.
• A manager who runs the floor without the owner.

The DBPR licenses salons and barbershops: cosmetology salons through the Board of Cosmetology, barbershops through the Barbers' Board. Each location needs its own license, and the license can't be transferred to a new owner (sections 477.025 and 476.184). A buyer files a new application, listing everyone who owns 10 percent or more, and must have the new license before opening under new ownership. If you're buying the company that holds the license, ask the DBPR what to file. You don't need to be a cosmetologist or barber to own one, but cosmetologists, barbers, and nail, facial and full specialists need their own licenses or registrations. A few services, such as makeup application and hair braiding, are exempt.

The Board of Massage Therapy at the Florida Department of Health regulates massage separately. A spa offering massage needs a massage establishment license, which can't be transferred (section 480.043). Owners must pass background screening, and the spa must have a designated establishment manager, usually a licensed massage therapist, who practices there. Medical treatments such as injections fall under medical licensing rules, so if the spa offers them, ask an attorney.

• Client counts and rebooking rates, and who owns the client records and booking data.
• Each provider's arrangement: employee, commission or booth renter. Treating employees as renters creates tax risk, so ask your accountant.
• Revenue by provider, and how much the top few produce.
• Agreements that keep departing stylists from soliciting clients, where they exist, and realistic plans to keep key people.
• The lease: rent, term, renewal options and landlord consent to a sale.
• Equipment, furniture and the condition of the buildout.
• Gift cards and prepaid packages: services you'll owe but won't be paid for.
• DBPR and Department of Health inspection history.
• Retail inventory: how much is on the shelves, how old it is, and any minimum orders required by product companies.

• How many active clients do you have, and how often do they come back?
• Are your providers employees, commission staff or booth renters?
• Which providers bring in the most revenue, and how long have they been with you?
• Do you work behind the chair yourself, and how many clients are yours personally?
• How much of your revenue is retail?
• What's left on the lease, and has the landlord agreed to a transfer?
• How much do you have out in unused gift cards and prepaid packages?