Buying a beauty salon: how to verify profitability?
Introduction
The beauty sector in Switzerland is showing sustained growth. Beauty salons combine treatment services, cosmetic product sales and subscription packages. This diversity of revenue makes financial analysis more complex than a traditional business.
Before taking over a beauty salon, you must understand precisely where the profitability comes from. High turnover does not guarantee solid margins. The cost structure, particularly payroll and products, can vary considerably depending on the salon's positioning.
The clientele constitutes the main asset. As with taking over a hair salon, subscriptions and visit recurrence are essential indicators of stability. A salon with 70% loyal customers presents fewer risks than one dependent on passing trade.
This guide details the specific financial analysis points for the beauty sector. You will discover how to verify revenue streams, assess customer transferability, calculate profitability ratios and identify points of vigilance before committing to a takeover.
📌 Summary (TL;DR)
Taking over a beauty salon requires analysing three dimensions: revenue streams (services, products, subscriptions), clientele (loyalty, recurrence, transferability) and cost structure (payroll, products, equipment). Key indicators include gross margin, EBITDA, turnover per m² and per employee. A rigorous analysis of these elements allows you to assess real profitability and secure your takeover decision.
📚 Table of contents
The financial specificities of a beauty salon
A beauty salon operates on a mixed economic model: treatment services, cosmetic product sales, and sometimes subscriptions. This diversity of revenue directly influences profitability.
The cost structure differs from other businesses: qualified staff (35-45% of turnover), premium products, and specialised equipment. Margins vary greatly depending on positioning: neighbourhood salon or premium centre.
In Switzerland, a well-managed salon typically shows an EBITDA margin of 15-25%. This specific analysis is essential before any takeover.
Analysing revenue streams
The profitability of a beauty salon rests on three pillars: treatments (60-70% of turnover), product sales (20-30%), and recurring revenue via subscriptions or packages.
Each source generates different margins. Understanding their distribution allows you to identify growth levers and concentration risks.
Treatment services vs product sales
Services (facials, waxing, massages) represent the core of turnover but require time and qualified staff. Typical margin: 60-70%.
Cosmetic product sales generate lower margins (30-50%) but without occupying treatment rooms. Analyse the average price per service, overall average ticket, and product conversion rate.
A healthy balance combines high treatment attendance and additional product sales.
Subscriptions and loyalty cards
Monthly subscriptions and prepaid packages create predictable and secure revenue. They increase the salon's valuation during a takeover.
Analyse the share of this recurring revenue in total turnover. A rate above 20% is an excellent indicator of loyalty.
To deepen your analysis of recurring revenue in the beauty sector, consult our guide on evaluating subscriptions in hair salons.
Assessing the clientele and their loyalty
The customer base constitutes the main asset of a beauty salon. Its quality determines revenue sustainability after the takeover.
Two dimensions matter: the number of active customers and their visit frequency, then their attachment to the establishment rather than the current owner.
Number of active customers and visit frequency
An active customer has visited the salon in the last 6 to 12 months. Request an extract from the management software (Planity, Timify, or other).
Analyse the average frequency: 4-6 visits/year is acceptable, 8+ is excellent. Check the annual retention rate (customers who returned from one year to the next) and identify seasonal variations.
This data reveals the real stability of the beauty salon.
Concentration and transferability of clientele
Identify whether 20% of customers generate 50%+ of turnover. This concentration creates a major risk during the takeover.
Assess transferability: do customers come for the current owner or for the establishment? Consult Google reviews and social media to measure reputation.
For a complete customer analysis methodology, draw inspiration from our guide on patient base analysis.
Examining the cost structure
The profitability of a beauty salon depends directly on its cost structure. Two items dominate: payroll and supplies.
Understanding these costs allows you to identify room for manoeuvre and hidden risks before the takeover.
Payroll and staff qualifications
Payroll represents 35-45% of turnover in a well-managed beauty salon. Beyond 50%, profitability becomes problematic.
Check qualifications (beauticians with Federal VET Diploma, specialised diplomas), contract types, and seniority. The departure of a key employee can immediately impact turnover.
Ensure compliance with Swiss collective agreements in the beauty sector.
Product and equipment costs
Cosmetic products represent 10-20% of turnover. Identify the brands used: exclusive (low margins, customer loyalty) or distributors (higher margins, flexibility).
Examine the condition and age of equipment: treatment rooms, laser or LED treatment devices, furniture. Immediate investments can reduce profitability in the first years.
Request maintenance history and recent purchase invoices.
Profitability indicators to calculate
Beyond turnover, specific indicators measure the real profitability of a beauty salon.
These KPIs allow you to objectively compare several takeover opportunities and identify high-performing salons.
Gross margin and EBITDA
Gross margin (turnover minus direct costs: salaries, products, rent) reveals the capacity to cover fixed costs. EBITDA measures profit before interest, taxes and depreciation.
For a well-managed Swiss beauty salon, EBITDA reaches 15-25% of turnover. Below 10%, profitability is fragile.
Obtain a professional estimate via Leez's valuation tool.
Turnover per m² and per employee
Turnover/m² measures location efficiency. For a beauty salon, 3,000-5,000 CHF/m²/year is acceptable, 6,000+ is excellent.
Turnover/employee assesses productivity: 80,000-120,000 CHF/year/FTE is standard, 150,000+ indicates a highly efficient team.
These ratios are essential for comparing several opportunities. Discover other key valuation indicators.
Points of vigilance before the takeover
Before taking over a beauty salon, check these specific risks: dependence on the current owner (personal clientele), regulatory compliance (authorisations, hygiene standards), and solidity of the commercial lease.
Analyse local competition and trends in the beauty sector (organic treatments, innovative technologies). A saturated market reduces growth potential.
Call upon experts (fiduciaries, lawyers) via the Leez partner network to secure the transaction. Explore opportunities on our platform.
Taking over a beauty salon requires rigorous financial analysis that goes well beyond simple turnover. Real profitability is measured through several dimensions: revenue structure (treatments vs products vs subscriptions), quality and transferability of clientele, and a controlled cost structure where payroll and products represent the main items.
Key indicators such as gross margin, EBITDA, turnover per m² and per employee allow you to objectively compare the salon's performance. Don't forget to assess points of vigilance: dependence on the main beautician, equipment condition, commercial leases and regulatory compliance.
A successful takeover relies on reliable data and a clear vision of the business's real potential. If you are considering acquiring a beauty salon, consult the opportunities available on Leez or call upon our network of experts to secure your financial analysis.
