What should I know about a hair salon’s inventory of backbar colour and developer?
Backbar stock is the colour, developer and treatments used behind the chair, so it is spent rather than sold. Count it with the seller, check what is open, damaged or past its best, and ask how the salon orders, so you know what is a real asset and what is clutter.
Unlike retail shelves, backbar goods vanish into services. That makes a count more useful for what it tells you about habits than for its total. Walk the shelves with the seller and look for half-used tubes, duplicated shades nobody asks for, and developer bottles that have been open a long time. Ask what is expected to be on hand at closing and who decides.
Ask how the salon orders. Is there a standing order, a reorder level, or is it done when someone notices a gap? Look at supplier statements and ask whether there are unpaid balances or any credit arrangements that would move to you. A salon that stocks a whole colour line may also have a supplier relationship, such as education or pricing, that depends on the current owner.
Finally, ask how much colour is wasted or given away. Stylists who mix by eye may use far more than the price list assumes. Your accountant can tell you how stock should be treated in the purchase. Ask the seller what a normal week of use looks like for each colour line, then see if your own count of the shelves agrees with that.
Key takeaways
- Count the shelves with the seller and note what is open or ageing.
- Ask how reorders happen and who approves them.
- Check supplier statements for balances that may follow the sale.
- Ask what quantity of stock is expected on hand at closing.
Related reading
13 pages on the same subject, grouped by topic.
Buying
- Expert answerHow do I check a lumber yard’s specialty and treated wood inventory?
- Expert answerHow do I review a powersports shop’s parts inventory and service backlog?
- Expert answerHow do I verify a jewellery store’s consigned versus owned inventory?
- Expert answerWhat should I look at in a flooring store’s sample board and display inventory?
- GuideBuying a developer tools or API business in Canada
- Expert answerWhat should I ask about the one developer who wrote most of a SaaS product’s code?
Due diligence
- Expert answerHow can I tell if a bike shop’s bike inventory is overstocked from last year?
- Expert answerHow can I tell if a shoe store’s aged inventory is hiding in the stockroom?
- Expert answerHow can I tell if a yarn shop’s inventory has too many discontinued dye lots?
- Expert answerHow do I check a hardware store’s slow-moving seasonal inventory like snow shovels?
- Expert answerHow do I check a lumber yard’s point-of-sale and inventory system reports?
- Expert answerWhat should I check in a nail salon’s inventory of gel, dip and acrylic supplies?
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentWhat is inventory
- 02Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
Deavo is an advertising and listings platform, not a brokerage, law firm or valuation firm. This page is general information, not legal, tax, accounting or valuation advice, and rules differ by province. Confirm anything you rely on with a qualified professional before you act on it.