In 2024, various employment laws and statutory pay rates will come into effect in the UK, including 'The Protection from Redundancy' (Pregnancy & Family Leave) Act 2023.
This will extend redundancy protections to employees who are pregnant or have recently returned to work from such leave, similar to those currently applied to employees on maternity, adoption, or shared parental leave. This could have a big sector impact on staffing related issues for operators, and we may see further growth in the 'chair or room rent' model, and the addition of integrated products or services. The chancellor's budget delivered a VAT threshold change, Increasing the VAT registration level from £85K to £90K from April 1st, taking circa 28,000 small businesses out of paying VAT. In real terms though I can't see how this will make a major difference to the #salon #barbershop #hairdresser #beautybusiness sector.
Although most businesses and salons are reporting solid growth in new client levels and turnover post Covid and ongoing cost of living, this often tips them into the VAT reg zone too early, against a backdrop of rising cost of goods, operational expenses, rents, rates, and wages, leaving them currently less profitable. VAT registration puts them at a disadvantage when having to increase their tarrifs by 20% versus some of the competition. With a strong emphasis in the last 12 months on retro, especially 80's, expect to see further salon trends that emphasise bold hair shades, vivid makeup, and nail colours, with the current watchwords being 'Ethically Conscious' & 'Sustainability'. It is still better to buy an existing hair salon #business than build it from scratch. Often there are quick fixes that can alter the course of, or add to the businesses profitability such as upgrading dated decor, or changing the overall brand, style, and customer communication reach. You will benefit from many existing fixtures & fittings, assignment of existing premises terms, potential ready made staff under TUPE transfer, or existing 'chair renters', favourable existing service and supply chain contracts, and it will likely cost you around £50K to fit out and open any new salon yourself, and that's before you have even gained any name awareness, goodwill, existing client base or proven track record. Existing businesses with performance history are much easier to get lenders to tip up their cash for and will require a smaller input from your side.
Most premises by Business Transfer are Leasehold, with the current average asking price being £83,476 (2024). Necessity businesses like hair, beauty, barbers, will always be popular owing to their longevity and adaptability. Values in this market have been fairly goldilocks in the last decade, remaining strong on re-sale right now. The key is structuring the sale or exit correctly, take proper advice, and don't rely on the no longer valid traditional #businesssales method.
Contact me to discuss your business sale or acquisition requirements at sales@buymysalon.co.uk