How do I tell what a nail salon owner actually takes home?

A seller may say the salon earns a comfortable living for its owner. A buyer needs to see how. In a nail salon the owner may also be a working technician, so the profit line mixes two things: a wage for the work and a return on owning the business. Pull them apart before you decide what the salon could do for you.

Start with how technicians are paid

Technicians may be paid by commission, by the hour, or may rent a station and keep their own takings. Each arrangement puts a different amount of cost and risk on the owner. Ask for the pay records and the written agreements, and ask who keeps the tips and the client list. A salon that looks lean on paper may simply be showing less labour cost because the owner does the work.

Count the owner’s own hours

Ask how many days the owner works at the table and whether that pay is in the statements. If you would hire a technician to cover those hours, that cost belongs in your picture. Ask the same about the owner’s time on ordering, scheduling and payroll. Your own plans matter here: will you work the table, or manage?

Supplies, disposables and rent

Polish, gels, files, liners and disposables add up, and so does rent. Compare supply purchases against the services sold, and check whether the lease terms in the statements match the lease itself. A rent holiday or a family arrangement with the landlord may not carry over to you.

Replace unpaid help

• A spouse or relative who answers the phone or opens the shop without pay
• Cash tips or cash services that are not in the books, which your accountant should review
• Personal costs, such as a vehicle or phone, run through the salon
• One-time repairs or renovations that will not repeat

Your accountant can tell you how to adjust statements for items like these. For a wider view of asset value, see how a barbershop is valued, and how a barbershop makes its money.