If you’re moving in a new direction, it pays to plan ahead with thought and precision.
When it’s time to step back from running a salon or barbershop, whether to help the business expand or for retirement reasons, there’s a lot to think about to ensure business keeps booming. It may seem obvious, but the business needs to be successful to be of value when it comes to selling. As the old saying goes, fail to prepare, prepare to fail. Succession planning – the process and strategy for replacing critical staff or passing on leadership roles – is essential.
Anne Veck has been through the process with aplomb. After taking over her first salon in Oxford in 1991, her business went from strength to strength. A decade later, she opened a second salon in Bicester.
However, a milestone birthday and carpal tunnel pains in her hand forced Anne to stop and think. ‘Why am I doing all this?’ she asked. ‘Do I need to work as hard as this and be responsible for all the staff and running a salon? I realised I didn’t, and it was time to change something.’
Anne decided to sell her businesses, but succession can also mean becoming a franchisor or continuing to work. Perhaps you want to sell so that you can open a brand new venture, or maybe you want a manager to run your business while you work on other projects. ‘It really depends on your personal situation, what you want to do afterwards and whether you need all the money in one go,’ says Anne.
How to do it
Finding the right person to take the helm is not always easy. However, when it came to Anne’s Bicester salon, the answer was right in front of her: her friend Tia Jacobs, who had worked with her for 15 years. In 2019, they agreed a management buyout: a lump sum was paid, then a monthly fee for three years while Tia raised funds. ‘There was no real risk for us because we did it all through solicitors. We also knew exactly what the salon was making,’ says Anne.
They had a string of initial meetings explaining how the salon was run, and Anne was available in the background to help with any issues during the transition. ‘When they bought the salon, they were ready with their own website, Instagram and so on,’ Anne says. ‘The day we sold it, the salon changed its name [to Edith et Moi].’
The transfer of her Oxford salon in March 2022 was similar. Kelly Spragg had been there since her work experience days, so Anne and she had a mutual trust. Kelly went on a business course to prepare herself and assisted Anne in managing the salon for nine months, adapting gradually to her new role of owner.
Anne says the wage structure was the biggest thing for Kelly to understand. ‘She had a bit of an issue opening a business bank account because of Covid-19, so it took a little longer to put things in place,’ she says.
Communication is key
Effective communication of an ownership change is key to retaining valued customers. Anne’s clients were told in person over the first several months and sent a newsletter about the sale. Staff were also informed and kept on, with no need for redundancies.
While Anne’s two buyers are like family to her, the successors of industry veteran Russell Eaton – who owns salons in Leeds and Barnsley – literally will be: the 70-year-old intends his son Robert and daughter Isobel to take over when he hangs up his scissors. ‘There was never any grand plan – it’s developed organically over the years,’ he says. His advice for passing along salons and barbershops is ‘be determined and prepared to see it through. It’s a lot of hard work, but most hairdressers are used to that.’
Moments of doubt are natural, too. ‘When you open a salon, it’s a bit like having a baby. Letting go is not easy,’ says Anne. ‘I went through a phase thinking that I’d made the biggest mistake, that this salon was my identity. It was silly: I’m loving my new routine and having time to get involved in new projects.’
Anne still freelances in her salon for two days a week, while also teaching. She has no regrets. ‘This week, it was Edith et Moi’s last payment, so we are going out to drink champagne and celebrate,’ she says. When it comes to succession, avoid the drama and complications and enjoy the success.
TOP TIPS
Whatever your reasons for stepping back…
- Think about succession planning in good time (it’s wise to include it in your overall business plan) and make an exit strategy
- If selling, get an expert valuation to ensure the best price
- If seeking a buyer, a reputable business broker can do the work while you carry on running the business
- If hiring a manager, create a clear description and interview in depth
- Explore whether an internal candidate has the necessary business knowledge
- If becoming a franchisor, have a replicable business model, sufficient funds and business skills
- Be patient: the process, including legal administration, takes time
- Once finalised, communicate clearly to staff and clients.
Don’t put it off
Saying goodbye isn’t easy, as NHBF chief executive Richard Lambert knows – he found out that his long-time hairdresser was closing from a note on the door. Emotional attachment is just one of many reasons to put off succession planning.
It's better to be methodical. 'A lot of salons don't have written business plans and work month to month, year to year,' Richard says. 'Nothing lasts forever, and you are going to be much better off thinking through what you want and putting arrangements in place around a plan rather than dealing with it at the point in time you think it needs to happen. If you plan ahead, you’ll get the result you’re looking for.’
The NHBF has business advice on the website for Members. You can also get support from business coaches listed in the NHBF trade Member directory.
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