Selling a Business: A Checklist of the Crucial Factors You’ll Need to Consider

The nail salon industry was worth $6.5 billion in 2020, despite the pandemic, so if you’re a nail technician looking to build a business, this could be a great time to start. There’s a big market out there to tap into - all you need is starting capital and the right strategy. That’s where this post can help. In it, we discuss how to open a nail salon. You’ll learn how to find your niche, construct a solid business plan, choose the perfect location, create a financial plan, and much more.  How To Open a Nail Salon Nail salons are an attractive business because they provide you with the opportunity to build a recurring client base fast. Clients tend to come back over and over for multiple services, including manicures, pedicures, nail art, and even hair extensions (if you offer them). Step 1: Pick a Niche Before you begin the process of opening a nail salon, you’ll need to pick a niche. Ideally, you want this to be an area in which you already have some experience, but you’ll need to consider other factors, too.  When choosing a niche, aim for something that:  Your competitors don’t offer: If there are already half a dozen advanced nail art salons along a street, opening a seventh probably won’t solve any new problems for customers.  You understand: For example, don’t offer paraffin manicures or acrylics if you don’t know how they work. Your customers find compelling: Specific types of nail treatments may be more appealing to your client base in certain areas. For instance, you may find that people in your area just want basic polish.  Step 2: Sleuth on Your Competitors Before you open a nail shop, you should also do some sleuthing on your competitors. Find out whether people rate them highly or not by reading publicly available reviews on their services. This way, you can determine the level of competition and avoid making any of the same mistakes.  Also, try to find out how much it costs to open a nail salon in a particular area. You may be able to access this information by asking owners of local salons or by consulting public LLC records.  Finding out how much they charge helps, too. Knowing this will give you a sense of how much leeway you have regarding pricing. If there’s an expensive local nail boutique, you may be able to undercut them. Lastly, try to find out what services they don’t offer. You can then bear this in mind when brainstorming nail business ideas. If you can offer something your rivals don’t, you’ll attract more customers.  Step 3: Find Someone Who Has Done It All Before Most successful business people have a mentor – somebody who works behind the scenes, offering helpful insights and important advice. This person doesn’t necessarily need to have set up their own nail care salon business, but they should have an entrepreneurial past. The cost to open a nail salon can be high, so always choose a mentor who understands business concepts.  A good mentor is someone who:  Understands how the nail salon business works Can be there for you long-term, particularly when the going gets tough Has well-developed business acumen and can advise you on financial matters Has experience gaining clients in a market-facing role If you don’t like the idea of owning a nail salon by yourself, you can always ask a partner to join you. Joint ventures can be highly successful since each person can support and motivate the other. However, the person you choose must be:  Competent in their role Committed to the success of the joint venture Responsible Passionate about opening a nail salon business Someone you can trust Step 4: Write Down Your Business Plan Once you have all of the preliminaries out of the way, it’s time to write down your business plan. This document describes in detail what your business will sell and what you would like it to achieve, and it serves to remind you of what you do and why you do it. There are many business plan templates available on the web. These make organizing your goals easy. As you write your business plan, you’ll want to consider the following:  The cost of opening  The recurring costs The target market How much you’re going to charge customers The services you will offer The competition in your area The amount of profit you think you can make each year The contribution any funding will make (and how you can pay it back) How you’ll market your nail room ideas How you’ll charge customers (subscriptions, membership of pay-as-you-go) How you’ll pay back any startup capital or bank loans Step 5: Decide on Your Nail Salon’s Name and Branding If you go to any nail salon open in your local area and ask people why they are in there, most of the time, you’ll find that it has little to do with their nails. Instead, nail shops are places people go to escape the madness of the world for a few minutes and get an all-round pampering.  For this reason, it’s imperative that you get your nail shop’s name, branding, and interiors right. The more you can sell yourself as a location that offers the ultimate pampering experience, the more customers are likely to frequent your business.  When choosing a name, go for something that really describes who you are and what you offer. Try to avoid something that sounds generic or creates a false impression of what your customers can expect.  For interior design, pick décor that complements your salon’s goals. Find a designer who understands how to make people feel welcome, pampered, and cozy. Step 6: Flesh Out Your Financial Plan Starting a nail salon business costs between $75 and $125 per square foot, depending on where you are in the country. Therefore, if you open a small 500-foot salon, you’ll be paying $37,500 to $62,500 in startup expenses. Because the sums of money involved in opening a fixed or mobile nail salon can be quite high, having a financial plan in place makes sense. Where possible, separate your business finances from your personal accounts. Financial plan templates make it easy to record all relevant details. When fleshing out your financial plan:  Estimate how much your running costs are likely to be Estimate your weekly income Calculate your future cash flow by subtracting running costs from weekly income To keep your nail shop open, you’ll need to ensure that the flow of income is positive.  Other things to include in your financial plan are:  Key performance indicators you’ll use to determine whether your business venture is successful A pricing strategy based on your location, demand for your services, brand image, and competitors’ pricing A record-keeping system so that you can report all your income and expenses to the relevant authorities Your personal financial situation, including how you’re going to manage any outstanding debt you might owe Step 7: Pick a Location Once you’ve written down your business and financial plans and have a strategy in place, you’re ready to choose a location. Ideally, you want an area that is:  Easy to access Close to a large and interested target market Near to popular intersections, transport hubs, and pedestrian routes Close to other businesses Many nail places open in residential areas, office buildings, and even college campuses. These tend to offer reasonable rents and high footfall.  Step 8: Gather All Licenses and Permissions Many people want to know if they can open a nail salon without a license. The answer is - it depends on your location. Some states allow you to open nail businesses without first applying for a license, while others don’t. You should be able to check state rules on your local government website.  Common requirements include:  Business licenses State-mandated training for nail techs Building permits Cosmetology licenses Step 9: Attract Customers Once your nail business is ready to go, the last thing to do is to attract customers. Here are some of the things you’ll need to do:  Post Your Salon on Directories Posting your salon on directories makes you easier to find and also helps with SEO. Many nail salon owners put their shops on Beauty Seeker, Best Salon Guide, Who Do You, and Yelp.  Reach Out on Social Media If you own a nail business, Instagram and Facebook are your friends. Both platforms provide ample opportunities for you to show off your skills and what you can do.  When marketing on Instagram, make sure that you:  Make your feed appealing, showing customers the types of services they can get if they go to you Interact with clients by regularly replying to their comments and messages Experiment with reels, showcasing the newest nail art trends  If you market on Facebook, be sure to:  Set up your own business page. You can use this for posting videos and messages to your audience. It also offers a shop facility where people can hire services with you Join local communities and groups interested in cosmetics, such as manicures and pedicures Pay for highly targeted promotions, targeted at people who are likely to want to use your business For Google and SEO, you’ll need to set up a Google My Business account. This service ensures that the search giant displays your business in Maps results, along with your website link, opening times, review rating, and branding images. It’s one of the best ways to boost your position in search results.  Further Reading 30 Essential Customer Retention and Brand Loyalty Statistics Ladies Who Lead - 35+ Amazing Women in Business Statistics Conclusion Opening a nail salon can be a lot of fun. However, it also requires a business mind and strategic thinking. Ultimately, the goal is to generate an income for yourself that allows you to give up your regular day job.  Getting to the point where you can manage your own shop takes a few months, but if you follow the right strategy, you can attract clients who keep coming back for more and create a lucrative business.

Business planning is an essential part of success, but people often forget that it doesn’t end once your enterprise starts doing well. It can be easy to forget about a succession plan when your business is thriving, but it’s in your best interest not to.  In this guide, we’ll talk about all the benefits of such a plan and present a checklist that will guide you through the process of business succession planning. What’s a Business Succession Plan? A business succession plan is a step-by-step set of instructions on procedures and processes detailing how your business will continue to function if an entrepreneur, business owner, or even a key employee leaves.  It answers questions like who will take over the affairs of the business, how long this succession will take, and which operating processes and procedures will be maintained or changed. Business owners can create a business succession plan in a number of ways, including engaging the professional services of someone who handles these types of events exclusively. Who Should Create a Succession Plan? Entrepreneurs or business owners should always do succession planning for their businesses. A succession plan is mainly considered in the context of a business being sold or the owner retiring. Still, there are other scenarios where a company succession plan can be useful, such as in the event of sickness or untimely death. In a way, you can think of this plan as a sort of a testament for a business, ensuring its best interests are carried out, regardless of what happens. When Should You Create a Succession Plan? Just as creating a will is dependent on several factors, making a succession plan needs to consider various business factors, so you can’t rush its creation. That said, the sooner you have at least an outline ready, the better for your business. Succession plans require a lot of time and effort. This is why many businesses plan for succession well in advance, and business transition planning takes place long before there’s a buyer ready or disaster strikes. Succession plans are contingency plans and should be taken as a way forward for any event in which dramatic changes to the business will occur. Why Is a Succession Plan Important? Here are some essential benefits of creating succession plans: It Protects the Future of Your Business Bad things can happen to any enterprise, no matter how careful the people running it are. Employees leave, business owners become unable to run their companies, the market becomes hostile, and so forth. How then do you safeguard your business operations from any of these often unforeseen circumstances? That’s where a succession plan comes in. Just like we have various types of insurance to give us cover from mishaps, a succession plan is an insurance policy for your business’s continuity. It Aids in Identifying the Most Qualified People in Your Company One of the most important benefits of succession plans is that they allow business owners to see which employees are best suited for the transition. This is a key aspect of succession planning for business owners and plays a key role in the continued success of the company’s operations. With a succession plan, you get to see which of your employees are most qualified as future leaders. It also helps to narrow down which positions within the company are most critical for its success. It can also shed light on potential vulnerabilities, helping identify and remedy them. For example, If there are no employees suitable for leadership roles within your organization, you would know to look externally early on. In the same vein, business succession planning is a process that could lead to increased employee retention and motivation, as it lets hardworking members in the organization know that their efforts have been noticed and encourages others to do better. It Helps Create a Training and Development Structure Building on the previous point, another benefit of succession planning is fostering an environment friendly to training and development. One other positive thing about identifying leadership prospects is picking out competency gaps and filling them by training your staff. Professional development can come in many forms, such as mentoring, coaching, giving staff increased responsibilities or even job shadowing. Some positions may require employees to head back to school for further education or certification. This early tapping on successors puts you and your business ahead of the curve, giving everyone enough time to prepare and build the skills or experience needed in leadership and other roles. It’s an excellent method to consider even before you start thinking about how to transfer business ownership to someone else down the line. It’s also an excellent way to let employees know you are willing to invest in them. It Maintains the Brand Identity of Your Business Succession planning helps identify employees that can keep the torch burning within the company and helps ensure that a brand identity built over several years doesn’t get thrown out the door when there’s a change in power. Even when there’s a new boss around, succession plans help ensure nothing crucial changes. It Puts Extra Eyes on the Job Succession planning is a company-wide exercise, meaning that you can have junior managers and veteran staff working together on the same tasks. This can help wring out any weaknesses and further finetune processes and operations. Resources for Succession Planning Now that we’ve covered why succession plans are essential let’s touch on what resources can aid the process of making one. A  business succession planning template is a great way to start getting all your business affairs in order and prepare for the future. You may need help, and a great place to turn to is your accounting firm. Note, however, that this only applies if they are experienced in succession planning. There are other factors to consider, such as the size of your business and the complexity of its operations. How urgent you need the succession plan is also a consideration. You can choose to hire an accounting firm or bring in temporary professional services (free accounting tools are also an option, but most don’t offer succession planning features). Here are some succession planning resources you can look to: PwC PricewaterhouseCoopers is widely known as one of the Big Four in the accounting industry (alongside KPMG, EY, and Deloitte). The company has an extensive background in succession planning and is a great fit for small businesses as it mainly focuses on smaller privately-owned enterprises. SCORE SCORE’s well-developed guide on business succession planning is a fantastic resource. SCORE is one of the largest networks in the world, providing small businesses with access to mentoring. The best part is that as a small business owner, you can ask to be paired with a mentor that’s a perfect match (these business mentors volunteer their assistance). It’s an option you should seriously consider if you require help with succession planning. Local Accountant If a local accountant is experienced with succession planning, then they’re a good option to consider as well. You can ask around your network for contacts, try to use your local Chamber of Commerce, any business support groups you know about, or just search for a certified public accountant in the American Institute of Certified Public Accountants directory. Steps To Creating a Succession Plan Succession plans can be tough to work on. However, there are some steps you can take to make it easier and create a better succession plan template. Let’s go over them: Succession Timeline Succession plans can be split into two types: an exit succession plan and a death-or-accident succession plan. The former covers the transfer of ownership at a specific date, while the latter deals with the event of owner death or disability.  An accident plan can be considered at any time but exit plans should be written when retirement is close by or the owner wishes to leave the business. There should be a specific date in mind when the transfer would take place, and the plan should also indicate whether you would still be involved after the exit or want to be done with the business completely. Determine Your Successor Who takes the reins after the business owner’s departure?  Many owners hand the reigns over to their families in business succession planning, and children often continue the family business. Sometimes, it is handed over to a  business partner or one of its key employees. Other times, the business is outrightly bought by an outsider. It’s a tough decision, but the successor must be someone that cares about the business and has similar values as the owner. Keeping it within the family is great, but you should bear in mind that most second-generation businesses have a high failure rate. That said, almost a quarter of small businesses fail because they don’t have the right team running the show. This just shows that succession planning is crucial in ensuring that the best people for the job inherit the key responsibilities. Record and Formalize Your Standard Operating Procedures Recording your SOPs for future reference is something that every small business owner should do daily. It is beneficial for employees and any future owners. They vary depending on the business, but most SOPs usually include: Org Chart Operations Manual IT Manual Employee Handbook Training Programs Skill Retention Strategies Performance Management Meeting AgendasEvaluate Your Business There are many succession planning best practices, but one of the most essential is evaluating your business. How much is your business worth? You should have a rough idea about this at any stage of running your business. Don’t make the mistake of overvaluing your business, though, as it can lead to poor financial planning. There are various ways to do it, too, from using a business valuation calculator to a professional appraiser. Some companies like Guidant Financial offer valuation services for businesses.  Handling the Finances of Your Succession Plan Your succession plan must cover how someone will buy your business - by paying a lump sum, purchasing it in installments, using credit facilities, or some other option. You should also have a buy-sell agreement, a legal document where the buyer agrees to an action that enables them to purchase your business. To draft this agreement, you’ll also need to meet with a legal professional, such as a business succession planning attorney. Succession plans are typically funded in one of the following three ways: Life Insurance: usually more common in family successions. A policy taken out on the business owner can help finance the buyout of the business in the event of death or other events such as owner retirement or disability.  Acquisition Loan: this is money borrowed from a bank to purchase a business. Typically, a buyer can get about 70% to 80% of the purchase price from a bank or the Small Business Administration (SBA). Seller Financing: or installment payments, occurs when the buyer pays for the business gradually after a down payment has been made, usually about 10% or higher. Final Thoughts One mistake many make is not reviewing their plans after they’ve been made. Succession planning in business is something that has to be reviewed regularly, and changes sometimes need to be made on the fly. Succession planning deals with answering difficult questions and dealing with unexpected events. Who takes over, and how if the need arises? Will the new business owner handle things the same way as the old one did? Which employees and positions are essential, and which ones can the business go on without? With our template, answering these questions should be a lot easier. Don’t forget that you can always seek the advice and services of legal and financial experts that have experience in succession planning.

Running a business is expensive, and entrepreneurs are always exploring ways to cut costs. And while some expenses are unavoidable, there are certain processes that you don’t have to spend money on.   For example, all LLCs or corporations are legally required to list a registered agent. When evaluating the most efficient and cost-effective way forward, many business owners ask a simple question: Can I be my own registered agent? The straightforward answer is yes, but it’s important to weigh the pros and cons of being your own agent. What Is a Registered Agent? Whether you’re setting up a limited liability company or a corporation, you’ll have to designate a registered agent. This is an individual or an entity tasked with handling all of the legal and government correspondence related to your business. In other words, registered agents act as a channel through which the state can reach the owner(s) of every registered company. That’s the basic purpose of a registered agent. One scenario where this is especially important is when a business finds itself facing a lawsuit and needs to receive service of process documentation. A registered agent can also assist your business with everything, from legal services covering compliance requirements to mail forwarding.  Without a registered agent to act as a bridge between you and the state, you run the risk of missing filing deadlines or inadvertently failing to respond to lawsuits in a timely manner. Should You Be Your Own Registered Agent? We’ve established that it is impossible or rather illegal to run an LLC formation without a registered agent. So, should you become your business’s registered agent, or is it better to go with a professional service? There are many different types of LLCs, but there is nothing in the law that stops you from becoming your own agent. Simply put, the owner of an LLC is legally permitted to act as a registered agent as long as the business is founded in the same state where the owner lives.  So, it all boils down to individual preferences. To help you make the right decision, here are some of the key advantages and disadvantages of serving as your business’s registered agent: Pros of Being Your Own Registered Agent It Helps Your Business Save Money While employing the services of a professional registered agent isn’t the most expensive thing that your business will spend money on, you won’t be able to use those services free of charge. Serving as your own registered agent is the only sure way to avoid paying for the service. If you’re operating on a tight budget, you’ll certainly appreciate having the option to avoid this cost, which can typically go up to $300 per year. It Can Be Very Convenient When business owners are trying to figure out whether they should become their own agent, one of the critical factors to consider is how comfortable they are with this arrangement. If your daily routine already involves being at your business’s office during working hours, then being your own agent wouldn’t cause you any particular inconvenience. Cons of Being Your Own Registered Agent Always Be Present at the Physical Location A major downside of being your business’s registered agent is that you have to be present at the physical location you list during all business hours, typically between 9 a.m. and 5 p.m. from Monday through Friday. This is the only way to ensure that you don’t miss any important and time-sensitive correspondence. Of course, you wouldn’t have to be there during federal holidays. You Could Miss Important Deliveries Circling back to an earlier point, it’s important to underscore the immense risk of missing deliveries of legal documents. Being constantly present at the listed location isn’t really possible from a practical standpoint. As such, stepping out for one moment at the wrong time can result in unnecessary inconveniences for your business.  Receiving a Lawsuit  at Work If your business is facing a lawsuit, then service of process documents will be sent to the listed address. Since you’re the business registered agent, you will be served the lawsuit at the relevant location. This can be embarrassing and undermine the credibility of your business if it happens in front of your employees or customers. The Costs of Fighting Default If you are not at the registered office when the process server shows up and you fail to receive the notice of the lawsuit on time, your business may face substantial costs for default judgments and lawyer fees. Ultimately, this defeats the purpose of trying to save money by being your own registered agent.   If You Use a Personal Address, It Becomes Public Record If you are running a small business from your home, then being your own registered agent means your private home address becomes a public record. This can be a serious issue if you’re concerned about your privacy. And even if privacy isn’t your main concern, having both your business and personal affairs tied to the same address can become problematic after a while. You Will Be Limited to Operating in One State  To become your own registered agent, you’ll need to show proof that you’re a resident in the state where your business operates. This limits your operations to the state that you’re registered in. Unless you’re willing to hire another registered agent, you won’t be able to expand and set up offices in other locations. Every state requires businesses to use a registered agent with a local address. Should I Hire a Registered Agent Service? After weighing the pros and cons, it’s clear that it isn’t advisable for business owners to become their own registered agents. This brings us to registered agent services. First and foremost, hiring a professional service eliminates your exposure to all the aforementioned risks and downsides. You can focus on running and growing your business, knowing that every legal document is being received and forwarded in a timely manner. When it comes to privacy, registered agents use their official business address, not yours. This means that sensitive information about your physical address is kept private. You also don’t need to make yourself available during working hours and can expand to as many states as you want.  When you're starting your business, it’s perfectly natural to ask: Can I be my own registered agent? But there are many reasons to consider professional registered agents instead of taking this burden onto yourself. Keeping up with all the compliance requirements set by the state where you’re forming your business can be tasking. A registered agent service can be a big help with things like filing annual reports. The service keeps tabs on your due dates and informs you about approaching deadlines. The only real downside to hiring a professional agent is the cost. Prices vary, depending on who’s offering the services, but you typically expect to spend around $100 annually. Further Reading White Label vs. Private Label: Differences Explained Opening a Campground: A Step-by-Step Guide How to Start a Meal Prep Business? A Step-by-Step Guide Final Thoughts Whether you choose to act as your own registered agent or go with a professional service is entirely up to you. It’s perfectly legal to do both, but the former isn’t always advisable.  The downsides can outweigh the cost-cutting attempts by small businesses that are operating on a tight budget. So be sure to take a step back and carefully review all your options before appointing yourself as a registered agent.