Selling a Personal Services Business

Most personal services businesses trade on a multiple of SDE (seller’s discretionary earnings). The multiple usually moves with repeat booking strength, provider concentration (how much revenue sits with one stylist or therapist), and how well the operation runs without the owner. Clean financials and a trackable schedule often support stronger pricing, while heavy discounting, messy prepaid balances, or owner-as-top-producer tends to pull it down. For a starting range, use Rejigg’s free valuation calculator, which is built around appointment-driven deal drivers.

Many salon and spa purchases can qualify for an SBA 7(a) loan if documented cash flow supports the payment. Lenders usually want two to three years of tax returns and financial statements, a clear add-back schedule, and evidence that the business can keep operating if the seller stops producing. They also tend to ask extra questions about outstanding gift cards and packages, plus any 1099-heavy team model. Rejigg includes an SBA loan calculator and a data room structure that matches what lenders request.

It depends. A good broker can be worth it if you need help pricing, positioning a provider-heavy shop, or managing a high-volume buyer process while you still run the floor. Many owners sell without one when they have clean financials, clear calendar metrics, documented prepaid balances, and a transferable lease and accounts. Rejigg covers the mechanics brokers often run: pre-vetted buyers, digital NDAs, a secure data room, and deal tracking. The Owner’s Guide shows how to run that process.

Many deals take 30–90 days to find the right buyer and agree on terms, then another 30–60 days for diligence and closing. Timelines can stretch if an SBA loan is involved, the landlord needs to approve an assignment, or the seller can’t quickly document provider pay, prepaid balances, and account ownership for Google and the booking platform. Rejigg speeds up the middle of the process by letting serious buyers review documents under NDA without constant back-and-forth. See due diligence and closing for the workflow.

Working capital is often negotiated so the buyer has enough “operating float” to cover payroll timing, restock consumables and retail, and handle normal refunds right after closing. The right target depends on pay cycles, inventory levels, and seasonality in your market. Prepaid services add complexity because gift cards and packages represent future labor capacity and potential refunds. Most deals spell out what’s included (cash, inventory, prepaid liabilities) and set a target at close. Rejigg’s offer comparison view helps you compare working-capital terms, not just price.

In many salon and spa asset sales, outstanding gift cards and prepaid packages are treated as liabilities that transfer with the business because the services still need to be delivered. Buyers typically want a current outstanding report, the written expiration and refund rules, and a sense of redemption timing, especially after holiday spikes. When tracking is messy, buyers often ask for a purchase price reduction, a holdback, or a cap on prepaid liability. Rejigg’s data room lets you share prepaid reports securely under NDA so this gets resolved early.

Most small personal services deals are asset sales because buyers want the equipment, buildout, brand assets, phone number, and systems while avoiding unknown liabilities. Stock sales can make sense in specific cases, such as certain licenses, contracts, or a more complex entity where moving assets is difficult. The choice affects taxes, liability, and practical transfer items like the lease, merchant accounts, and contracts. Talk with your CPA and attorney early. Rejigg helps keep deal terms and requested documents organized so you can evaluate either structure cleanly.

Yes, and buyers will focus on the capacity gap you leave. Outcomes are usually best when you can show how your book is retained through the business, including front-desk rebooking, strong client notes, and a plan to replace or redistribute your hours. Many buyers also ask for a transition period where you introduce the new owner and help stabilize regulars. In some markets, an earnout tied to short-term retention is common. Rejigg’s guidance on transition planning helps you structure the handoff.

Most buyers ask for two to three years of financials and tax returns, sales by service and provider, a payroll or contractor roster with signed agreements, the lease and amendments, licensing and inspection items, an equipment list, and an outstanding prepaid report for gift cards, packages, and memberships. They also often request account ownership details for Google Business Profile, the booking platform, and phone/SMS because that is where bookings come from. Rejigg’s data room is built for this. Upload once, control access, and avoid emailing sensitive files.

Confidentiality matters more in personal services because provider rumors can turn into immediate client churn. Many owners keep the circle tight until they have a signed offer, then plan buyer visits around slower times so tours don’t disrupt the floor. It’s also worth planning a simple script for staff questions and thinking ahead about retention tools like stay bonuses or clearer career paths once a deal is real. Rejigg supports confidential outreach with pre-vetted buyers and digital NDAs before anyone sees identifying details.

A common transition runs 2–8 weeks, but it depends on how much the owner books clients, manages staff issues, and controls key systems. Early on, most sellers focus on steady schedules, warm introductions to staff and regulars, and transferring admin access for the booking platform, Google Business Profile, and phone/SMS. After that, decision rights move over, including refunds, time-off approvals, and ordering. If your personal name is the brand, client messaging takes extra care. Rejigg’s guidance in transitioning after the sale helps set expectations.

Cash flow drives most of the purchase price, and equipment and buildout rarely set the valuation by themselves. Condition still matters because one broken chair, laundry bottleneck, or down device can limit appointments and lead to bad reviews. Buyers usually ask what is owned versus leased, ages and maintenance history, and what tends to fail first. For medspas, training and protocols matter because a device has less value if only one person can run it safely. Rejigg’s data room makes it easy to share lists, photos, and maintenance records.

Terms often reflect people risk. When revenue is concentrated in one provider or the owner is the main producer, buyers may propose an earnout tied to retained revenue, rebooking, or provider retention over a short period. Seller financing can also help buyers bridge down payment requirements, especially alongside SBA financing. The right structure depends on how measurable retention is in your booking system and how stable your team has been. Rejigg’s deal tools let you compare offers side-by-side, including earnout triggers, seller note rate, and timing.

These are core assets because they control demand and follow-up. Most buyers expect the business phone number, booking URL, website domain, and admin access to Google Business Profile and social accounts to transfer at close. Client records and notes usually transfer too, but you need to stay consistent with privacy laws and your software’s terms. Deals get messy when access is tied to a personal email or a former employee who was never removed. Rejigg prompts owners to document account ownership early. See prepare to sell.

Tax outcomes depend on the deal structure (asset vs. stock), how the purchase price is allocated (goodwill vs. equipment vs. non-compete), and your entity type. Personal services businesses often carry meaningful goodwill value because clients come through reviews, branding, and the booking system, but allocations can change depreciation recapture and capital gains. Most of the time, it’s worth modeling after-tax proceeds before you sign an LOI so you can negotiate with numbers in hand. Rejigg keeps terms organized across offers so your CPA can run scenarios faster.

Sometimes, but it needs to be negotiated in writing because buyers think they are purchasing future cash flow. Keeping a chair, mobile clients, or a separate brand can reduce value, especially if it touches the same phone number, booking system, or reviews. Most buyers will ask for clear non-compete and non-solicit terms that match what they believe they are buying, and enforceability varies by state. Rejigg’s messaging and term tracking help surface this early. See negotiate a deal.

Owners show a “busy” shop and can’t back it up with proof. Buyers quickly look for calendar metrics, team stability, provider concentration, and a clear prepaid outstanding number for gift cards and packages. Another common failure point is discovering late that Google, the booking platform, or the phone/SMS number is tied to a personal email or a former employee. Rejigg reduces these issues by collecting proof in a secure data room and keeping diligence organized. Start with finding buyers.

The best time is when your financials and calendar look steady across a full seasonal cycle. Many buyers like seeing how you handle holiday gift card spikes and the redemption wave that follows, plus slower periods like summer travel or post-holiday lulls. If you are planning a sale, big changes right before going to market, such as a pricing overhaul or comp restructuring, can raise questions unless you can show results. Rejigg’s process in prepare to sell your business helps you line up clean proof before you list.