Buying or Selling a Hair Salon

Most salon owners never get a straight answer to "what's my salon worth?" until a buyer makes an offer. And most people thinking of buying one are guessing too. There is real sale data, though, and the financing rules are public. I'm not a broker, CPA or attorney, so use this to walk into those meetings knowing the numbers.

What salons actually sell for

BizBuySell, the largest US marketplace for small businesses, publishes benchmarks from businesses sold on or reported to its site. Its hair salon category also includes barber shops.

Source: BizBuySell Hair Salon and Barber Shop Valuation Benchmarks, read October 23, 2026. "Owner earnings" is seller's discretionary earnings: profit plus the owner's own pay and perks, before the owner is replaced. These are reported sales on one marketplace, so they lean toward smaller deals and leave out salons sold privately to a stylist or a neighbor.

Prices have climbed. The same page shows the median sale at $87,500 in 2021, $89,000 in 2022, $129,000 in 2023, $105,000 in 2024 and $165,000 in 2025. Each year, sellers got about 89 to 94 percent of their asking price on average.

The multiple: how a price gets set

Small salons are mostly priced as a multiple of owner earnings. On BizBuySell's 2021 to 2025 sales, the multiple broke down like this:

• Bottom quarter of sales: 1.25 times owner earnings or less
• Median: 1.77 times
• Average: 2.04 times
• Top quarter: 2.34 times or more

A second survey points the same way. In the IBBA Market Pulse report for the second quarter of 2026, business brokers said deals under $500,000 sold at a median of 2.0 times owner earnings, down from 2.3 a year earlier.

Here's what that range means for a salon earning its owner $92,000 a year, which BizBuySell says was the 2025 median:

Same salon, same earnings, a $100,000 spread. What puts a salon at the top is what a buyer can keep after the owner leaves.

What pushes the price up or down

BizBuySell's own notes on this category say the top-quarter salons tend to have steady books, growth, an owner who isn't doing most of the work, and a seller willing to finance part of the price. The bottom tends to be thin margins and a full-time owner behind the chair.

That last one is the big one, and the Census numbers show why. In 2023 the Census counted 838,264 beauty salon businesses with no employees, against 84,176 salon locations with a payroll. (Its beauty salon category is the one hair salons fall under.) Roughly nine out of ten salon businesses are one person. When the business is the owner's own hands, the clients follow the hands, and there's little for a buyer to pay for.

If you're selling in the next few years, the work that raises the price is the work that makes you replaceable:

• Clean books for at least three years, with your own pay shown separately
• A team whose books are full without you
• A transferable lease with time left on it
• Client records, retail inventory and equipment that live in the business, not on your phone

How buyers pay: SBA loans and seller notes

Most small salon purchases are financed. The SBA 7(a) program is the usual route, and its rules changed on October 1, 2026. From sba.gov and the SBA's current rulebook (SOP 50 10 8.1):

• Loans go up to $5 million, and buying an existing business is an allowed use.
• The buyer must put in at least 10 percent of the price for a change of ownership.
• A seller note can count toward that 10 percent, for up to half of it, only if the seller takes no payments for the whole life of the SBA loan.
• The term for a business purchase is up to 10 years. Only the real estate part can run up to 25.
• Variable rates are capped above the prime rate: prime plus 6 percent for loans over $50,000 up to $250,000, and prime plus 4.5 percent up to $350,000.

Here's what that looks like for a $165,000 salon, the 2025 median:

The 10 percent rate is an example to show the math, not a quote. Your rate depends on the prime rate the day you close, your lender and your credit. Fees and working capital are left out.

Compare that payment with the owner earnings. At $92,000 a year, about $7,700 a month, a $1,962 loan payment leaves room. At the five-year median of $70,225, it's a bigger bite, and the buyer still has to pay themselves. A lender will run the same test.

Outside the SBA, seller financing is common but small. In the IBBA's second-quarter 2026 survey, deals under $500,000 were paid 88 percent in cash at closing and 11 percent through seller notes, on average.

The tax paperwork: Form 8594

Most small salon sales are sales of assets, not of the company itself. The IRS treats that as a sale of each asset separately: equipment, inventory, the lease, the client list and goodwill. Its Publication 544 explains the "residual method": the price is split across classes of assets in order, and goodwill gets whatever is left over.

• Buyer and seller each file Form 8594 with their return for the year of the sale.
• If you both agree in writing how the price is split, that split binds both of you unless the IRS says otherwise.
• The buyer writes off goodwill, and a non-compete signed as part of the purchase, over 15 years.

How each piece is taxed for the seller depends on the asset, and that split is where a lot of money is decided. Agree on it with your CPA before you sign the purchase agreement, not after.

If you're buying: questions for the seller

• What share of revenue comes from the owner's own chair, and what happens to those clients?
• Which stylists have agreed to stay, and on what pay plan?
• Can the lease be assigned to me, and for how long?
• Three years of tax returns and booking reports: do they match?
• Will you carry a note, and will you stay on for a transition?

For the cost of starting from scratch instead, see how to open a hair salon. For what the job pays once you own it, see how much salon owners make.