A hair salon typically sells for 1.5 to 2.5 times the owner's true annual earnings. On revenue alone, most salons trade between 0.35 and 0.65 times yearly sales. Where your salon lands depends on what you really take home, and on how well the shop runs when you step away.
Your tax returns almost always prove a higher number.
Upload three years of tax returns, about 15 minutes of your time. A real person reads every page and your package is delivered within 48 hours. If your package isn't right, you don't pay: full refund any time before we deliver, and after delivery we fix the numbers or refund you.
Not ready yet? Get the checklist of every document a buyer will ask you for, free.
| Business type | Revenue multiple | Owner-earnings (SDE) multiple |
|---|---|---|
| Hair salon / Barbershop | 0.35 to 0.65 times yearly revenue | 1.5 to 2.5 times owner earnings |
| Cleaning service | 0.5 to 0.9 times yearly revenue | 1.8 to 2.8 times owner earnings |
| Landscaping / Lawn care | 0.45 to 0.85 times yearly revenue | 1.8 to 2.8 times owner earnings |
| Restaurant / Cafe | 0.25 to 0.45 times yearly revenue | 1.3 to 2.2 times owner earnings |
| Auto repair / Detailing | 0.4 to 0.75 times yearly revenue | 1.9 to 3.1 times owner earnings |
| Retail shop | 0.3 to 0.6 times yearly revenue | 1.8 to 3 times owner earnings |
| Other service business | 0.35 to 0.7 times yearly revenue | 1.5 to 2.5 times owner earnings |
Buyers start with your true earnings, not the profit line on your tax return. True earnings means your salary, plus profit, plus the personal things the business pays for. Your car, your phone, your health plan, and the money from your own chair all count. These are called add-backs, and most salon owners forget them. That is why most owners guess low.
Here is the math in plain terms. Say your salon brings in $230,000 a year, and your true take-home is $60,000 once every add-back is counted. At 1.5 to 2.5 times earnings, your range is $90,000 to $150,000. A salon owner in central Pennsylvania guessed her business was worth $35,000. Her own tax returns supported $95,000. The proof was sitting in her filing cabinet the whole time.
Start with three years of business tax returns. SBA lenders require three years of business tax returns to finance a buyer, so serious buyers ask for exactly that. Then your lease, your payroll or booth-rent records, and a simple list of your equipment: chairs, stations, dryers, wash units.
One more thing salon sellers learn late: in many states, your salon license does not transfer with the sale. In Pennsylvania, the buyer applies for their own salon license through the State Board of Cosmetology. Plan the timing so the shop never has to close. Selling in Pennsylvania? Read our Pennsylvania guide below.
She guessed $35,000. Her own tax returns proved $95,000. She almost gave away twelve years of work.
Using YourBizWorth personally transformed my experience. The idea of figuring out what my business was worth reduced anxiety that I have been carrying for a long length of time and made what seemed very complicated so simple.Salon owner, central Pennsylvania · name shared once her sale closes
Most main-street businesses sell for 1.5 to 2.5 times the owner's true yearly earnings, or their replacement value, whichever is higher and can be proven. True earnings means salary plus profit plus the personal things the business pays for. Most owners forget those add-backs count, so most owners guess low.
SBA lenders require three years of business tax returns to finance a buyer. Three years also shows a trend, not a snapshot. We saw a salon whose latest year looked like decline. Three years proved it was one expensive staffing year, and that was worth tens of thousands on her price. Fewer years looks like hiding. More rarely changes the number.
Tax returns, a profit and loss statement, your lease, payroll records, and an equipment list. Start with the returns. We tell you what is missing and why each piece adds dollars to your price.
No. Most small business sales use seller financing or an SBA loan. Your package includes the payment math, so you can show your buyer exactly what they would pay each month.
Until your next tax return is filed, which is usually about a year. Your package is built from your real returns, so it stays accurate as long as those are your most recent ones. A buyer's lender will ask for current financials anyway, so a package built on last year's returns is exactly what they expect to see. Two things age it early: a new tax year, and a material change like losing a large client, buying major equipment, or signing a new lease. If either happens before you sell, we rebuild your package from the new numbers for $99. Most sellers never need it.