A hair salon in Australia is typically worth between 1.5 and 3 times its annual seller’s discretionary earnings — the profit left over after you add back your own wage, super, and personal expenses run through the business. For a suburban salon generating $80,000 SDE, that’s a sale price somewhere between $120,000 and $240,000. The gap between that lower and upper number is almost entirely explained by three things: the quality of your lease, whether clients are loyal to the salon or just to you, and how the business is staffed.
What a Hair Salon Is Actually Worth
Australian hair salons sell across a wide range, and that range is driven mostly by size and business structure rather than how long you’ve been there.
A home-based or mobile operator typically sells for $20,000 to $60,000. There’s no lease to value, clientele is entirely personal, and there’s very little the buyer is acquiring beyond a client list and some equipment. These deals are common but rarely exciting.
A standard suburban strip-mall or high-street salon — the most common format — sells for $80,000 to $350,000. The wide range reflects lease length, number of chairs, weekly turnover, and staff model. A six-chair salon in a Perth suburb with a 5-year lease and $4,000 weekly rent, netting $100,000 to the owner, should sell for $150,000 to $250,000 in a normal market.
A larger city salon with multiple stylists, a product retail line, and a manager running the floor can attract $300,000 to $700,000+. These businesses are genuinely transferable — the buyer isn’t buying your personality.
The rule of thumb: most Australian hair salons sell for 1.5x to 2.5x normalised SDE. The 3x figure gets thrown around a lot; it’s achievable but requires something genuinely transferable.
How the Maths Works
Buyers aren’t paying for revenue. They’re paying for what’s left after the real costs of running the place — including a market-rate wage for someone to do your job.
Start with your reported net profit. Add back your owner drawings, super, any personal expenses run through the books (yes, the car lease and the phone), one-off costs that won’t recur, and any depreciation on equipment. That number is your SDE — seller’s discretionary earnings. It represents what the business pays a single working owner.
A Miro Capital rule of thumb: if your SDE is under $60,000 a year, most buyers won’t bother. At that level, the risk-adjusted return isn’t compelling enough to justify taking on a lease, staff, and working capital. There are exceptions, but they’re exceptions.
Then apply the multiple. Low end (1x to 1.5x): short lease, owner-dependent clientele, no systems, single operator. Mid range (2x to 2.5x): reasonable lease, staff in place, decent retention, three to six chairs. Upper end (3x+): manager-run, documented client base, long lease, retail revenue, multiple revenue streams.
Add plant, equipment, and stock at fair market value — not what you paid for them five years ago. A second-hand styling chair has a fraction of its purchase price in resale value. Buyers know this.
If you want to understand how your financials should be normalised before going to market, read our guide on EBITDA add-backs when selling a business.
What Affects Your Salon’s Multiple
Four things move the multiple more than anything else.
The lease. If your lease has less than two years remaining with no option, you don’t have a business — you have a going concern with an expiry date. A buyer taking on $40,000 in goodwill needs at least five years of lease to recover the investment and then some. If your landlord is awkward, your sale price suffers. If you’re on a month-to-month arrangement, you’ll either sell for almost nothing or not at all.
Client retention and who owns the relationship. This is the one that most salon owners underestimate. If your clients are loyal to the salon — they book whoever’s available, they respond to SMS promotions, they’ve been coming for ten years through three different stylists — that’s genuinely valuable. If they’re loyal to you personally and will follow you down the road if you open somewhere else, that’s not much of a business.
Buyers will ask to see repeat booking data, client frequency, average spend per visit, and how client numbers have tracked over time. The ATO benchmarks for hairdressers show typical gross profit margins of 50-60%; a salon well above that benchmark with stable client numbers has a story to tell.
Staff. A salon staffed entirely by employees is more predictable than one relying on chair renters, but it’s also higher cost. Either model can sell well — but the buyer needs to understand what they’re getting. More on this below.
Clean financials. I saw an owner last year who couldn’t tell me what his weekly turnover was within $2,000. He’d been running his salon for eleven years and had a loyal staff, a good lease, and a nice strip location. But his books were a mess — cash receipts unrecorded, personal spending blended with business expenses, no clear COGS tracking. He’d been paying himself whatever was left at the end of the month. The business was probably worth $220,000 to the right buyer. He sold for $110,000 because he couldn’t document what he had. Clean records double sale prices.
Chair Rental vs Employed Staff: How It Changes the Number
This is the gap that most valuation guides skip over, so let’s be direct about it.
Under a chair rental model, stylists pay you a fixed weekly fee (typically $200 to $600 in an Australian suburban market, depending on the city and location) and keep everything they earn above that. Your revenue is predictable but capped. Your costs are low. Your reported profit looks good.
Under an employed model, you pay wages, super, leave, and WorkCover. Your revenue is higher but so is your cost base. Your net margin is often similar, but the revenue line is much larger.
Why it matters for value:
Chair rental businesses look attractive on paper because margins are high and costs are low. But buyers are cautious: if two of your five chair renters leave after the sale, revenue drops immediately. There’s no employment contract, no restraint of trade, and no notice period. The whole revenue base can walk.
Employed salons are more defensible. Staff have notice periods and (sometimes) restraint clauses. Client relationships are partly owned by the business rather than the individual.
Most buyers will discount a chair rental salon more than a comparably profitable employed salon — perhaps by half a multiple turn. If you’re thinking about selling in the next few years, converting at least some chair renters to employees (or hybrid arrangements) before going to market is worth considering.
Common Mistakes When Valuing Your Salon
Valuing on revenue, not profit. Revenue is not value. A salon doing $800,000 in revenue but netting $50,000 to the owner is worth far less than a six-chair shop doing $400,000 in revenue netting $120,000. Multiple what you keep, not what comes in.
Assuming the fit-out is worth what you paid. That $80,000 fit-out from 2019 is not worth $80,000 today. A buyer will value it at replacement cost minus depreciation, which in most cases means $10,000 to $25,000 at best. Good-looking interiors matter for retention and presentation, but they rarely move the needle on price.
Ignoring the effect of your personal brand. If your Instagram has 15,000 followers and you are the face of the business, a buyer is factoring in the risk that your personal brand doesn’t transfer. Either agree to stay on through a handover period, or adjust expectations.
Leaving the lease conversation too late. Many sellers only raise the lease with their landlord when they already have a buyer. At that point, the landlord has maximum leverage. Start that conversation 12-18 months before you intend to sell.
If you want a comprehensive checklist of what to sort out before going to market, our guide to preparing your business for sale runs through the full process.
Tax When You Sell
The sale proceeds from a hair salon sale are generally treated as a capital gain — the difference between what you sell for and your cost base (typically what you paid to set it up or acquire it).
If you’ve owned the business for more than 12 months and meet the basic conditions for the small business CGT concessions, you could pay little to nothing in tax on the gain. The 50% CGT discount, 15-year exemption, and retirement exemption can stack powerfully for owner-operators selling a business they’ve built from scratch.
The detail matters, so read our full breakdown of tax on selling a business in Australia before you start telling people what your business is worth.
What Buyers Are Looking For
Buyers shopping for a hair salon are typically looking for one thing above all others: a business they can walk into without it falling apart.
That means:
- A lease with at least five years remaining, ideally with an option
- Staff or contractors who have agreed in principle to stay on after the sale
- A client base that books the salon, not just you
- Documented revenue — EFTPOS records, POS reports, appointment software history
- Margins consistent with ATO benchmarks (buyers will check)
The buyers willing to pay top dollar are usually existing industry operators looking to add another site, or well-funded career changers who understand the sector and want something turnkey. Both types will walk away from a business where too much depends on the outgoing owner.
For a deeper look at what makes a business buyer say yes, our piece on what buyers look for when buying a business covers the psychology and the checklist.
Getting an Accurate Number
The only way to know what your salon is actually worth — not what you hope it’s worth — is to run the numbers properly. That means normalised financials going back three years, a realistic assessment of your lease position, and an honest read on client retention.
If you want a starting point, use the Miro Capital valuation calculator. It’s not a substitute for a proper assessment, but it’ll give you a ballpark and highlight where your business sits relative to typical multiples.
If you want to talk through your specific situation — lease, staff model, client profile, exit timeline — contact us. Hair and beauty businesses are a sector we see regularly, and the numbers are almost always more interesting than people expect.
Frequently Asked Questions