Hair Salon & Barber Shop Business Valuation Benchmarks

Business owners, prospective buyers, and industry investors rely on a diverse set of financial benchmarks to assess the value of a business. We have compiled data from current BizBuySell listings and sold businesses to provide insight into the business for sale market and important benchmarks for pricing and evaluating hair salon and barber shop businesses relative to industry standards.

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Highlights of Hair Salons & Barber Shops Sold on BizBuySell

Hair salons and barbershops are a staple business in every community. Barbers and hair stylists are kept busy with a steady stream of repeat customers because haircuts and styles are needed by everyone, at least a few times per year.

As a business, hair salons and barber shops generally provide consistent sales with reasonable profit margins. They are generally priced well within the means of most buyers, often selling to skilled barbers and stylists looking to own a business.

Most of the hair salon and barber shop businesses listed and sold on BizBuySell are independently owned brands, but franchise brands are also listed and sold and included in this report.

Hair Salon & Barber Shop Business Transaction Trends

The median sale price of hair salon and barber businesses sold on BizBuySell had been stable through the pandemic and initial interest rate hikes. In 2023, sale prices increased substantially as average hair salon and barber shop business revenue and earnings increased 40% and 15% respectively, over the prior year. This increase in sales is generally attributed to the return to office trends that begun in earnest that year. In 2024, sale prices declined 20% but remained above three of the four prior years.

Median days on market for hair salons and barber shops increased during the pandemic years, but has since returned to normal.

Hair Salon & Barber Shop Business Valuation Multiples

Valuation, or pricing, multiples are financial tools that allow for comparisons between businesses that have different levels of revenue and earnings. They represent the sales price of a business relative to its financial performance, and given enough individual business sales data, they represent what the market is willing to pay for a business given its revenue and earnings.

Valuation Trends

Business values and associated multiples fluctuate over time, influenced by a variety of macroeconomic factors such as interest rates, inflation, consumer spending, and overall economic growth.

Valuation multiples of hair salons and barber shops fell during 2020 and 2021 as these, and other service businesses struggled with slowing sales. However, valuations rebounded in 2022, and reached highs in 2024, despite increasing interest rates.

Earnings Multiples

Earnings multiples represent the value of a business relative to its owner’s discretionary earnings or "cash flow". Arguably the most important valuation metric - as seller's discretionary earnings will often dictate how much a buyer is able to borrow to finance the business acquisition - most valuations will hinge on the earnings multiple.

Revenue Multiples

Revenue multiples represent the value of a business relative to its overall sales or revenue. In conjunction with an earnings analysis, revenue multiples are commonly used to value a business based on its overall sales.

How to Interpret These Multiples

Recent Listings vs. Sold Businesses

We calculate and provide valuation multiples from two sources: Current and recent listings of hair salon and barber shop businesses for sale, and our database of "comparable" businesses sold on BizBuySell. Multiples based on listing data are generally higher due to owners setting asking prices above what their businesses might typically sell for. This occurs either intentionally as a negotiation strategy, or incidentally due to business owners’ common tendency to overvalue their own businesses.

Multiples based on comparable businesses - "comps" in business broker parlance - are much more useful as they represent the prices at which businesses ultimately get sold. Business brokers and valuation professionals will always turn to local comps when pricing businesses for sale or evaluating businesses for acquisition. We provide both sets of data at the national level to offer general context. Local business sale comps by sales class suitable for pricing and negotiations are available in BizBuySell's Business Valuation Report.

Quartiles, Median, and Average

No two businesses are identical, and as such, valuation multiples exist in a range. We have carved out four common values within this range: Lower quartile represents the value under which the lowest 25% of valuation multiples fell. Upper quartile represents the value above which the highest 25% of multiples fell. Median is the middle of the range, and average is the mean of the set. Mean is almost always higher than the median, driven by a minority of high volume, high value businesses sold at multiples above the upper quartile.

Businesses with consistent financial performance, above average revenue and earnings, demonstrable growth potential, low owner involvement, unique competitive advantages, and a seller willing to finance will command a multiple at or above the upper quartile. Lower volume businesses with thin profit margins, full-time owner involvement, and many direct competitors will trade at or below the lower quartile. Most businesses will fall somewhere in the middle.

Based on this data, half of hair salon and barber shop businesses are valued between 1.2 and 2.3 times their annual seller discretionary earnings, with 25% of exceptional, high traffic shops trading above this range, and 25% of smaller, less popular ones trading below.

Financial Benchmarks

To determine how a business compares in terms of revenue and earnings relative to industry peers, it’s necessary to have some insight into industry standards. "Benchmarking" describes the practice of comparing a business’s financial performance to typical industry standards to determine where a business falls relative to other businesses in the same industry. These benchmarks can help guide owners and investors towards appropriate valuation multiples from the range above.

To that end, we have aggregated financial ranges useful for comparing an individual barber shop or hair salon business to its peers in the market.

Hair Salon & Barber Shop Business Revenue and Earnings Trends

Hair salon and barber shop sales struggled through the peak pandemic years as fewer people were using their services less often. Revenue rebounded in 2023 with more of the workforce returning to office and pandemic-era behaviors waning, though median revenue fell again in 2024, though profit margins have improved.

Earnings Ranges

Discretionary earnings (used interchangeably with the terms "cash flow" and seller's discretionary earnings or SDE) is often the crux of business valuations, so it is important to benchmark it relative to other businesses traded on the market. Below you will find discretionary earnings ranges for barber shop and hair salon businesses sold over the past five years, as well as recent for sale listings.

Revenue Ranges

Sales volume plays a large role in business valuation, as it measures the size of the potential income opportunity for new ownership. It's not uncommon for buyers to select an earnings multiple range based on overall revenue. The table below includes revenue ranges of hair salons and barber shops sold over the past five years, as well as recent for sale listings.

How Revenue and Earnings Level Affects Business Values

Clearly higher levels of earnings lead to higher valuations, even given the same multiple. However, valuation multiples also tend to rise with business sales volume. Popular hair salons and barber shops that consistently generate higher revenue (and maintain reasonable profit margins) tend to sell for earnings multiples on the higher end. So, a hair salon consistently generating sales of $500k annually may sell for an earnings multiple close to 2.3, while a less popular shop with sales well below $200k would likely sell for an earnings multiple closer to 1.2.

This tendency for higher sales volumes to fetch higher valuation multiples is largely driven by the economics of business acquisition financing. Higher volume businesses give buyers more cushion to cover debt service obligations and still have enough left over to pay the new owner a reasonable income.

Sector Comparisons

For a more complete understanding of the market and valuation standards, consider comparisons within the broader beauty and personal care sector when benchmarking barber shop and hair salon businesses. The chart and table below includes key metrics from sales of select beauty and personal care businesses on BizBuySell between 2020 and 2024.

Compared to other businesses in the beauty and personal care sector, hair salons and barber shops tend to generate the lowest sales volumes. As such, when sold they are generally valued at a multiple on the lower end. They are not discounted, but rather, sell for multiples in-line with the rest of the sector given their sales class.

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