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Valuing a Tanning Salon

Valuing a Tanning Salon

Has your tanning salon seen a decrease in revenue since the pandemic? Many tanning salons are not bouncing back since closures during COVID-19. It is important to know how to grow your tanning salon and increase your tanning salon’s value. Whether you are buying, selling, or growing a tanning salon it is helpful to know the success factors that increase the value of a tanning salon. A business appraiser analyzes these factors when valuing a tanning salon. 

As a business appraiser, Peak Business Valuation regularly provides business appraisals for tanning salons. A business valuation will help you understand the value of your tanning salon for purchasing, selling, or growing a tanning salon. The following factors are suggestions, a business valuation gives you specific ways to increase the value of your tanning salon. Reach out to schedule your free consultation with Peak Business Valuation, business appraiser, today! 

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Market Multiples for a Tanning Salon

The following are average valuation multiples for a tanning salon. When determining the value of a tanning salon a business appraiser uses multiples and other methods

  • SDE Multiple Average Range: 2.06x – 3.13x
  • EBITDA Multiple Average Range:  3.12x – 4.00x
  • Revenue Multiple Average Range:   0.61x – 0.96x
**Disclaimer: These multiples are for educational purposes only. As such, the information provided does not constitute valuation advice. These multiples do not represent the valuation opinion of Peak Business Valuation or its valuation professionals. Instead, seek the guidance and advice of a qualified business valuation professional about any matter in this article. 

How is a tanning salon most often valued?

When valuing a tanning salon, a valuation analyst uses a variety of valuation approaches. Cash flow multiples SDE and EBITDA are often applicable. But a valuation expert uses their judgment and expertise to decide what multiples and methods are most applicable for your tanning salon.

Knowing what your tanning salon is worth through a business valuation empowers you to implement steps to increase the value. Whether you are preparing to sell, buy, or grow your tanning business, increasing its value is crucial. The following are a few ideas to increase the value of a tanning salon. For more ideas read Value Drivers for a Tanning Salon. If you would like a more precise valuation for a tanning salon, obtain a business valuation from Peak Business Valuation, business appraiser. Schedule a free consultation to start the process today. 

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Key Success Factors

As a business appraiser, Peak Business Valuation values tanning salons regularly. The following success factors will help differentiate your tanning salon. In addition, they will increase the value of a tanning salon.

Diverse Products and Services

The best way to increase the value of a tanning salon is by offering various products and services. In order to attract multiple types of clients there needs to be a variety of services. Tanning is popular but is declining in demand. Having more products and services in addition to tanning will increase the value of a tanning salon. 

In addition, tanning services have seasonal demand. Offering a variety of products and services will offset the decrease in revenue during off-seasons. Keeping up with the trends and seasonal demand is valuable for a tanning salon.

When valuing a tanning salon Peak Business Valuation business appraiser analyzes the financial statements. Diversity of products and services shows in profit margins as well as revenue. For additional questions, reach out by scheduling a free consultation

Reputation

The next success factor for a tanning salon is its reputation. Loyal customers are your greatest source of revenue as well as the best route for marketing. Satisfied customers are more likely to refer others to your salon. In addition, they provide high reviews and increase the traffic to your salon. 

A big part of improving your salon’s reputation is having good customer service. When hiring, be sure to find happy people who can chat with ease. Be sure to train them properly on all services so that they can be efficient while still providing quality care.

Quality care, good customer service, and a highly rated salon all increase the value of a salon. When valuing a salon, a business appraiser, such as Peak Business Valuation, considers the strengths and weaknesses of your salon compared to competitors. A highly-rated salon is better able to withstand competition. Increased sales and revenue due to a good reputation enhance the value of a tanning salon. 

 Location

The last success factor for a tanning salon is its location. When choosing a storefront it is important to consider the following questions. Is my salon in a high-traffic area? What are the key markets in the surrounding area? How can I better market to the potential clients in my area?

A salon located in a high-traffic area has more exposure. This increases brand recognition. In addition, walk-ins are more likely in high-traffic areas. The surrounding businesses affect your client base. For example, a high school nearby attracts different types of clients to your salon than a senior living center. 

It is important to consider your location and how it will impact your marketing strategy. The storefront, building, and accessibility can all improve the value of your salon. When valuing a tanning salon, Peak Business Valuation business appraiser, considers the location.

Summary

There are many important factors to consider when determining the value of a tanning salon. Knowing the value of a tanning salon is important whether you are looking to buy, sell, or grow a tanning salon. Obtaining a business valuation can help you understand the fair market value and identify opportunities to maximize the value of a tanning salon

Peak Business Valuation, business appraiser, values tanning salons across the country. We are happy to answer any questions you may have about valuing a tanning salon. You can reach out by scheduling your free consultation below.

For more ideas see also Valuation Multiples for a Tanning Salon and Value Drivers for a Tanning Salon.

 

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