Selling a Pet Grooming Business or Pet Spa

Why buyers look at the groomers first

Pet owners book with a groomer, and a good groomer has a following. When a buyer reads your schedule, they want to know how many of the regular clients ask for a particular person by name. If the answer is that most do, and that person is you, the sale gets harder. If the answer is that most clients ask for the salon and take whoever is open, the sale gets easier.

A buyer will want to meet the groomers, or at least learn how long each has been there and how they are paid. Commission arrangements are common, and so are hourly pay and a mix of the two. A buyer wants to see that the pay structure is written down and that it still works after the change of owner. Groomers who are paid on commission and who feel respected tend to stay. Groomers who learn about the sale from a rumor tend to start looking at other shops.

Our post on owner dependency applies here directly. If you are the head groomer and you also do the books, the ordering and the phones, a buyer will price in the cost of replacing you. Training a second experienced groomer to take your best clients, before you list, changes how a buyer reads the shop.

What the numbers show

The schedule is the best document you have. A buyer will ask for the appointment history out of your booking software, by month, over at least a few years. They want to see how many pets were groomed, the average ticket, how many were repeat clients, and how often clients rebook before leaving. A salon where most clients book the next visit at the front desk looks like a salon with a recurring base. A salon that lives on walk-ins and one-time visits looks more like a retail store.

Add-on services matter. Teeth brushing, nail grinding, de-shedding treatments, specialty baths and blueberry facials all carry a better margin than the base groom, and a buyer will check how much of the ticket they represent. Pricing by breed and coat is also looked at. Some salons have not raised prices in years, and a buyer sees that as room to grow, though it is also a sign that margins may be thinner than the sales figure suggests.

Retail adds a smaller line, such as shampoo, treats, collars and toys. Most buyers treat retail as a small bonus. Daycare, boarding and training are different, because those are separate businesses with their own staffing, insurance and facility needs, and a buyer values them on their own.

A mobile grooming van is a different asset. The vehicle, the generator, the water system and the route all matter. Buyers of mobile groomers want to see the service area, the days of the week the van is booked and how much the owner spends on fuel and repairs.

What a buyer will ask to see

Expect to hand over business tax returns, monthly profit and loss statements, a balance sheet and the payroll records. If your groomers are paid as independent contractors, a buyer and their accountant will look closely at whether that classification holds up, and rules vary by state, so your attorney confirms what applies. The wrong answer can turn into a liability the buyer does not want to inherit.

They will ask for a list of equipment with age and condition. Hydraulic tables, high-velocity dryers, bathing tubs with lifts, clippers and blades, kennels and cages all wear out, and a buyer wants to know what will need replacing in the first year. They will ask about the plumbing and the drains, because a grooming floor handles a great deal of hair and water.

They will also ask for the vaccination record policy, the incident log and the insurance history. Salons that carry coverage for pets in their care, and that can show a short list of incidents with how each was handled, are easier to sell than salons where nothing is written down. A buyer would like to know that a bite, a cut or a complaint was documented the day it happened.

If you want a closer look at what clean books look like to a buyer, our post on getting your financials ready covers it.

What has to transfer

The lease comes first. Grooming is noisy, wet and sometimes smelly, and the landlord has probably approved your use of the space for those reasons. A buyer needs the landlord to consent to an assignment, and the lender behind the buyer will want enough lease term left to cover the loan. Our post on the lease as part of the deal explains how that conversation usually goes.

Business licenses, local permits and any grooming or kennel registrations your area requires also have to be looked at. Some transfer with the business and some have to be applied for again by the new owner. Rules vary by state and your attorney confirms what applies to your salon. Zoning matters more than owners expect, since a buyer who plans to add boarding or a bigger water setup may find the space is not approved for it.

Client records move with the business, which means the booking software account, the phone number, the website, the social media pages and the review profiles. A buyer wants the phone number and the reviews more than anything else on that list, because the reviews are what new clients read before they book.

Groomers who have signed a non-compete or a confidentiality agreement make the buyer more comfortable. Where there is nothing signed, a buyer will want to talk with the key staff before closing. Our post on when to tell employees helps with the timing.

What tends to sink a grooming sale

The most common problem is a groomer who leaves in the middle of the process and takes a third of the schedule with them. Next in line is a set of books that do not match the schedule, where cash tips and cash sales were kept off the records. A buyer cannot pay for income they cannot verify, and their lender will not count it.

Equipment problems come up too. A buyer who finds that the tubs leak, the dryers are failing and the floor drain backs up will either lower the price or walk. A lease with a short term and no renewal option is a further reason a lender may decline. And a salon with an injury or a lawsuit in its history, even a settled one, will need that history explained in writing.

How to prepare the salon

Start a year out if you can. Move every sale through the booking system so the schedule and the tax returns agree. Raise prices to where the market allows, since a buyer will pay for the earnings they see, and the new prices will show up in the numbers by the time you list. Train a second groomer to take your regular clients, and put the pay structure for every groomer in writing. Keep the equipment serviced and keep the receipts.

If you are thinking about selling a pet grooming business, we start with a valuation built from your own numbers, then prepare the materials a buyer will expect and screen buyers before they see the salon. At Business Advisors of America we work with owners from that first valuation through the closing.

This article shares our opinion and general information. It is not legal or tax advice. Always speak with a licensed attorney for legal advice, and a qualified tax professional for tax questions, before you act.