Building a successful salon exit strategy starts long before you put your business on the market. In this episode, host Michelle Seiler Tucker sits down with former client and Whip Salon founder Amy Pal to break down her journey from industry novice to a multi-million dollar exit. Amy shares how she grew her business across six locations by focusing on standard operating procedures, team culture, and brand building. You’ll hear how removing owner dependency allowed her to run the business smoothly without being trapped in daily operations. Michelle and Amy walk through the valuation process that doubled Amy’s expectations and generated six competing offers above asking price in just ten days. If you’ll ever want to transition your business into a valuable asset buyers compete for, you can’t afford to miss this conversation.

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Multi-million Salon Exit With Amy Pal

Welcome to another episode of the show. You know this because you’ve been tuning in to me for years and years. We always deliver valuable content. We always give you those golden nuggets that you need to really catapult your business. Those golden nuggets that you really need to take your business to the next level. That’s what we’re going to do. I used to be doing solos. I used to interview all the short-term guests. I have a really special guest on. Why is she so special?

She was my client, and now she’s one of my good friends. I love it when your clients become your friends. We have Amy Pal. She was a founder and CEO of Whip Salon. I say was, yes, because she had a huge exit, my friends. It’s going to be a special episode. You’re going to learn from a seller what it’s like to come into an industry with zero experience, grow that business to over six locations, build the operations, build the teams, build all the proprietary assets so she could exit rich. Welcome to the show, Amy.

Thank you so much for having me, Michelle. I’m so happy to be here and to see you again.

It’s a pleasure to have you. The sale was so successful. Amy came to New Orleans to meet with us. How did she meet with us? Picked her up in a limo, went to dinner, showed her all of New Orleans, and Amy’s from Connecticut. Amy, tell us a little bit about your story. Real quick, what’s your background? How did you decide to get into the salon space? You had zero experience, and most salon owners grew up in the business. They’re hairdressers, cosmetologists, etc. They typically have zero experience. Tell us your story.

You’re absolutely right. I did have zero experience, and it was a bit of a circuitous start for me. It was my second entrepreneurial venture. Whip Salon was. My first entrepreneurial venture was with Spin Studios, actually. The reason I decided to do that was that my kids were young. I had been in financial marketing most of my career, and I really wanted to do something that was going to free up my time a bit. I saw that there was an opportunity to open a spin studio in my town. I just did it as a licensee.

Transitioning From Licensee To Brand Owner

I had a licensor, and that was great because it gave me the confidence to really be an entrepreneur because I had someone I could ask the tough questions to. I had just that little bit extra support, even though it was my own money. It was still very terrifying. Starting as a licensee was great for me because it really gave me a lot of confidence, but it also taught me that I’m not very good as a licensee because I had a lot of ideas and enthusiasm and I wanted to take the brand and all these different directions and my licensor was like, “Could you just come and stay in your box and stop it with all these ideas?” I started getting frustrated and restless. Even on that first one, I was doing it.

Let’s start there real quick, because there’s a lot to unpack and I want my audience to be able to follow. My background before mergers and acquisitions, buying, selling, and fixing growing companies, was franchise development, franchise sales, and building franchise sales. I also did licensee opportunities, license sales, etc. I would take equity in all their companies. Franchising and the license model are really good business models.

If you have never owned a business before, and like Amy said, it was good. She has a support team. It’s good because you’re in business by yourself, but not for yourself, which makes it even better. However, if you’re a true entrepreneur, which Amy didn’t know she was from the beginning, then it does become difficult because then you’re going to start to do this because Amy’s very creative. She’s got great ideas. She’s very intelligent.

She’s going to come up with all these ways to improve the systems to make the business better, to grow the company, and franchising and licensing don’t always allow for that. When you go to buy a franchise or license, you really need to take inventory of what your skill sets are. Are you a person who butts heads? Are you creative? Are you the one who wants to do it your way? Do not get into licensing and franchising. I just wanted to set that clear for the audience, Amy. Go ahead.

That’s a great point, but I didn’t really know that. I’d always wanted to do something entrepreneurial. I felt like this was a great way to start.

It was a good stepping stone for you. It helps you identify what you want and what you’re good at. You want to be your own boss.

It did. It gave me confidence. Actually, I was a little bit frustrated and maybe a little bored with that first one because I started looking next door to my spin studio, where there was a hair salon. I was thinking, “Man, if I could take over that hair salon, all my riders would go in there and get blowouts, and I’d be killing it.”

It’s just strategic.

Actually, because Drybar was on the rise at the time and I was like, “I could do a blow-dry bar. That’d be kind of cool.” I did put together the Whip Salon business plan while I still had the spin studios. I approached my landlord. I asked him, “Are those guys on the way out?” I tried to take over that space, but it didn’t work out. I set it aside. I focused on the spin studios for a couple of years.

Actually, what happened there was that it did come to a head. Eventually, we just realized we weren’t compatible because I wanted to take the brand in so many different ways. They were just like it was contentious. Eventually, we sold the spin studios back to them, and we had a fantastic exit. That gave me a taste for what I wanted next. I was like, “This was great. It was a successful exit. Next time, I want to do that with my own brand.” That set the playing field for me and my next move.

That makes sense. You were right next door to the hair salon, like a hair salon. Why not? Did you ever think I’ve never done hair before? I’ve never done cosmetology before. I’ve never been an aesthetician. What makes me qualified to own a hair salon?

I never thought about that once. People would certainly ask me that, but I didn’t know anything about the spin studio business either. It was really fun getting under the hood of it and learning everything about it. I thought, “How hard can it be?” Looking back, I realized that it is a little bit insane. I’m a little afraid for myself, just jumping into the hair and beauty industry, because it’s very complex and there is a lot to it.

A lot more than a spin studio, for sure.

I had no idea. It was good that I went in blindly. Basically, what happened was I did assess my market after I exited the spin business. I realized that we really needed this in our town because we’re right outside of New York City. I wanted to create something for this market that was trendy, but warm and friendly. I felt those two things could coexist. I really knew that we needed a salon with a vibe in our town. I just knew I knew the market. I felt confident about it. Even though I had a lot to learn, I knew that ultimately if I persevered, I’d get there. That’s really what I spent the first year doing is honing the business and understanding how it all works.

For my entrepreneurs, you do not have to know an industry to go in and start in that industry to own a business in that industry, to run that industry. You need to do your due diligence. You need to do your market research, and you need to really understand what you’re getting into. Most importantly, will this market support the industry that you’re wanting to go into, like a hair salon? It was great. What year did you open, Amy?

You opened with one salon, then you went to six locations. When was it that Amy said, “I’ve got this under control.” I got a great system, great team in place, great operations, and great proprietary assets. Does Amy think about exiting?

Planning An Exit From Day One

Exiting? I thought about that. I knew that was something I was going to do in a finite period of time. I knew I wasn’t going to do it forever.

You knew that going into the salon industry, you were going to build this business to exit one day?

I did, for sure.

It’s because that’s the biggest mistake the business owners make. Eight out of 10 businesses will never sell. There are 30.4 million businesses in the United States. Forty percent will be up for sale at any given time. Eight out of 10 will never sell. Why? It’s because a business owner has not built a sustainable, scalable business that runs without them, that does not have owner dependency, and most importantly, is built on a solid foundation.

Starting as a licensee gives you confidence, but building your own brand lets you scale without limits. Share on X

When I think about selling, it seems like a catastrophic event has occurred, a burnout, or some type of issue that forces them into a sale, and that’s why the business typically will not sell, so they end up closing their doors or even worse, filing bankruptcy. Amy thought about this going into an industry, building a solid foundation, and boy did she. She has great operating systems, great processes, great teams, and great proprietary assets. You know what I’m naming here? The 6Ps and Exit Rich.

Systematically.

Go ahead, Amy.

I do have to say I was a big believer in Michael Gerber’s E-Myth book.

I know Michael Gerber very well. He’s a friend of mine.

I just took that to heart. I really wanted to build a brand and a company and something that could thrive without me, without losing my mind and having to spend every minute there. That was always at the forefront. I wanted that balance. That helped guide me from the beginning.

You went into this business saying, “I’m going to exit it one day,” but did you ever go into it and plan out what I call the Seiler Tucker GPS Exit Model, which is number one? What’s your exit price? What do you want to sell the business for? It’s your destination. Did you ever go into it knowing your destination? I said, “I’m going to sell for this one day.”

No, I didn’t have that all the way synthesized. I just knew that I wanted to build something that was valuable enough that I could sell it.

She did better than 99% of business owners do. As I said, most business owners will wake up and say, “I want to sell my business.” Guess what? It’s trending downward. It’s about to go out of business. It’s not sellable. It’s certainly not sellable for the price tag that owners need to retire on or enter the next phase of their life. I encourage all entrepreneurs to really think about this and say, “What’s my destination? What do I want to sell my company for? Pick a number.”

You know what clients tell me, Amy? “I do not know. I’m going to pick five million, but maybe I want to sell for more.” It’s not written in stone. Just pick a number. You want to know what your current evaluation is, what your business is worth today, and what your time frame is. If you want to sell for five million, you’re worth two million. Three years, let’s get going. You started in 2016. Your exit was in 2026. Ten-year exit. Was that the right timeframe for you? I know that you started earlier than with me.

I did.

Let me go backwards real quick, because I want to now talk about the 6Ps. When I said Amy really built a solid foundation. Let me go through that. Number one is people. Amy, tell me about your people.

I really had the best team. They really were the best. It was really about figuring out what the brand stood for and who we were trying to attract so that we had a very solid way of recruitment and hiring and making sure we had the right people who fit the prototype of what we were looking for and who would thrive in that environment and succeed in the environment. Having that blueprint really helped us attract the right people and keep the right people.

She figured out who her patrons were going to be, which is a fifth P in the Seiler Tucker 6Ps, in order to attract who her team should be. You had, correct me if I’m wrong, over 16 W-2s.

Yes. At one point, about a hundred, but yeah, we ended up like 70, 75.

At one point, about a hundred W-2s. They narrowed that down to get to the cream of the crop, and they had a little over 70 W-2s. One of the most important things that they did with their people was what, Amy? They had employment agreements in place. They had non-competes in place, and they had employment agreements in place.

We did.

Also, one thing that I love that they did is that they had management teams at every single location. Amy also got a director who would oversee all six locations. Four of the locations were in Connecticut, and the other two were in South Carolina. Amy, you had this great director that you hired, and so you didn’t have to be everywhere at once. You could pretty much operate the business from anywhere and not be hands-on. The business was no longer dependent upon you.

That’s absolutely correct. Do you know what was by design, and it really cracked me up? I was down in Hilton Head. I would go down there periodically, checking on the team. I’d definitely do FaceTime with them from when I was in town. One time someone there told me, like, “The impression is that you just swam into town and then you just went to the beach.” That just really made me chuckle because, like, that’s what I’m designing. That’s exactly right. I’m sure that was meant as some type of a slight, but I was like, “I really think that’s exactly what I wanted.”

That’s what business owners should do. We all go into business to have a better quality of life and financial freedom. Yet many business owners get stuck working in their business instead of working on it, creating a glorified job that they go to work in every day versus a business that actually works for them. Amy didn’t create that. She had over 70 W-2s. She had a great management team. She put a director in place so she could work a lot less.

The reason we were able to sell her business is that it did not have owner dependency. Her people, the other thing I liked, were the senior people, all the senior employees. Now correct me if I get this wrong, Amy, all the senior employees would bring in the newbies and really talk amongst each other saying, “Is this person a good fit? Is this a good culture fit? Is this going to work out? How do we train them up or train them out?” You had a great culture.

Maintaining Culture Through Team Alignment

Excellent culture. It was great because I think that mission statement really did a lot for us. We had it on the wall. Everybody knew what we were aiming for.

What was the mission statement?

Talent, positivity, coachability, teamwork, and always bringing your best self to work every day. Just those five elements. You can fake that in an interview, but you cannot fake it after the first 30 days. We had a 30-day probationary period for anyone who joined us. If you weren’t having those qualities that you said you did, then it would appear very clear and very obvious, very quickly, and we would just manage them out.

That’s a great process. Your mission does not have to be paragraph after paragraph. It should be 3 to 5 bullet statements, like Amy just said, boom. That’s your mission statement. She had the people now. Let’s talk about products. In business, you need to always ask yourself, “Do I have an Amazon, and am I at the top of my industry? Do I have a Toys “R” Us? I’m about to go out of business.” You’re either growing or dying. Amy, there’s really no in-between. Talk to us a little bit about your products, because to me, you’re on the cutting edge. You are growing and growing year over year. You have substantial growth, and you have multiple products, multiple concurrent revenue streams, including your own private line. I’m sorry, I’m talking for you. Go ahead.

You’re absolutely right. Products are like, it’s not just products, it’s products and services, don’t you think? What we always try to do is to keep it.

It is products and services. You are correct.

For me, it was always about what’s the latest service, what’s happening? Keeping tabs on what’s happening in the beauty industry to make sure that our clients are getting what is the very latest and greatest in the world. One of the greatest things that one of my staff members said to me after I sold was like, “What I really always liked about you is that you were always keeping it so fresh and you were always keeping things like cutting edge.” That was what the brand was representing. That was big. I was so happy to hear that. It was like we’d achieved that. Whether it’s like a new blowout trend, hair extensions, or a product line, it’s trying to deliver whatever’s the freshest thing to the market. That’s really where we were focused.

What Amy is saying is what I always say. The thing that kills businesses more than anything else even more than competition. It’s not even really competition that kills a business. It’s complacency that kills a business. I always say lack of Aim is what kills businesses. Always innovate and market.

I’ll remember that one. I like that Aim.

That’s a Michelle Seiler Tucker quote.

That’s my nickname.

You’ve got to innovate because you’re either growing or dying. Especially in the hair industry, you must innovate. Products are very important because you want to make sure you have a multitude of ways to get paid. Amy gets paid off of services. She had some spa services as well. In addition to that, she also had products, not just other people’s products, but she also created her own product. That’s a proprietary asset that she had. You get into business. When you’re in business, ask yourself three questions. I want you to ask yourself three questions.

Number one, what business are we in? Amazon did this a long time ago. Amazon said, “We’re in the book sales business. We distribute books.” Number two, what’s your superpower? Number three, what business should we be in? Amazon said, “We’re in the book e-tailer business.” Number two, “Our superpower is distribution.” What business should we be in? Distribution for everybody all over the world. Amy did that. Let me move to processes because I think one of Amy’s superpowers is operations.

For our processes, we had SOPs for everything from day one.

Standardizing Systems For Operational Independence

Standard operating procedures, you all.

That’s right. That was like the secret sauce, honestly, because I never wanted to reinvent the wheel. I never wanted to talk about the same thing twice. Anytime something would crop up, I’d be like, “Let’s get an SOP on that.” We put it all into a book, which was our essential book for all of the systems that we did. If we had a new hire, over to the book. It was always so easy to see what we stood for because we were all aligned across the board, because everything had been written down. That was so fundamental. Delivering the same quality, no matter what location you’re in. That really was a good guiding light for us.

A thousand percent. You heard her say this was essential. Of all the Ps, everybody asks me, “Michelle, what’s the number one P?” That’s very difficult to answer. You cannot have a business without people, and you cannot have people without processes because you do not want the employees to run the business. You need the processes to run the business, processes to run the employees. When you go to correct an employee’s behavior, it’s not personal because you’re pointing to that SOP. You’re pointing to that policy and procedure. You’re having them read it.

It’s not coming from a boss to the employee as personal criticism. It’s coming from that policy. What I love is that she put in her book of essentials, what we call it, as a wow and unwow book. Wow, Amy, and you did this over and over and over again in your business. Every time a client comes in, maybe somebody messed up. There’s always going to be mistakes in business. No business is perfect. Even with AI, there’s going to be a lot of mistakes in business.

The wow book is anything you did to correct that unwow. You go ahead, and somebody messes up your hair, but then you give them a product, give them the next visit, do something. That unwow becomes a wow. Every wow in your business brings you up that brand new ladder, and every unwow brings you down that brand new ladder. I would like to say that Whip Salon, Amy, had over a 98% rating on Google out of how many patrons?

We had over 2000 Google reviews and 4.9 ratings.

Four point nine, I said 98%. That’s almost unheard of in a retail business, especially hair salons. I’m getting a little ahead of myself here. The book of wow and the book of unwows are very important. Every unwow should bring you to an SOP, which Amy said she’s been doing in our company. Amy, out of the three Ps, now that she had the people, she had multiple congruent revenue streams, she was on the cutting edge, she was keeping up with the trends, and she had her processes buttoned up. The other P, which I call the most valuable P, because it can bring you from a three multiple to 5 to 7, even higher, is proprietary assets. Tell me about your proprietary assets, Amy.

Proprietary assets were really the brand and everything that we did that was, like, I want to say differently, but like that was like very Whip-centric. Making sure that we had a sequence of service that was echoed in every location and that it was systematized. I feel like that was something that not other hair salons were nailing necessarily, so that you’re getting the same exact three-minute scalp massage in the same way every single time.

Every single location. Every location had the same look and feel.

Every location had common elements, but I would not say it’s like a Starbucks. If you’re in Tokyo and New York, it’s going to look the same. You still think you’re in Starbucks. It’s more like we would lean into whatever great properties that space had. We’d have some common Whip elements that would always be there. You would know that you were, but it was more of a feeling.

The services were the same. You go to Connecticut versus South Carolina, you’re going to get the same experience.

They’re going to get the same experience. There’s this warmth because of the way that we hire people and the way that we do things that you could just feel because we have a lot of clients that went from Connecticut to Hilton Head. They would say, “I feel like I’m at Whip.” They get it, even though they looked vastly different. They were just conducted the same way. That really worked, really pulled through.

The other proprietary assets that you had, as number one, had a federal trademark. They were very well branded. They had been in business for over ten years. They were developing software, still in the development of that, that they still have a license to and rights to, that they still have rights to proprietary software in their industry. They had a lot of proprietary assets. Proprietary is not just trademarks and contracts and all this stuff. It’s also what she talked about. Her processes, her systems, the way that they do things, the way that you can go from one Whip Salon to another one to another one and get the same experience. Those are proprietary assets. Now let’s talk about patrons. This is your customer base.

That was fantastic. We were so lucky we started in Ridgefield, Connecticut, and we got a really fierce following there. It’s really down to the stylists. They’re just so good at what they do and very team-oriented. Our clients were really Whip clients. They love the name. It resonated with them. That’s part of it. We’d have ladies of all ages coming in like, “I’m ready to get whipped.” It’s just cute. I like saying that.

It was a good brand.

Our team, if someone’s going on vacation or is out for a bit, you can go to someone else in the salon. It’s a Whip client. We want them to come to Whip, not like, you’re away, so you have to wait for you to get back or even like to go to a different salon down the street. We want them to come back to Whip. That’s us all buying into that and knowing that we’re like a team that really helped.

One thing that I didn’t talk about in proprietary assets, but I need everybody to hear this because it’s something that most people do not think about. The other proprietary asset is your social media. It’s your videos. It’s your content. Content is still queen and king. It’s your ratings. As she said, she had a 4.9 rating out of 2000. When I go look at most salons, they are lucky to have a 2, 3, or 4, like a very low rating. Your social content, Amy, was really good, and her team was good at developing all these different videos on TikTok, Instagram, and all over social media that really drew traffic and probably even helped you to get stylists.

Absolutely, it did. I really think we’re like at a time where it’s just incredible to have that. In 2016, it was still up-and-coming. We were one of the first to, of course, embrace Instagram, but now it’s like people use Instagram to search. I’m always telling the team to hire like-minded people who were at the top of their game creating content, and it would help get clients in their chairs. At the end, like right before I sold, I would say most of our clients would come through Instagram because they discovered the stylist through hashtags, through the great content that we were producing. They would see that we were on top of our game and that we were active. Our clients would come through that.

That’s a golden nugget that she just dropped. I do not know if everybody picked it up and caught it. A lot of people think that when I have to recruit, I have got to go to Indeed, I have got to go to Zip, I have got to go to these job boards, or a lot of people recruit from LinkedIn. In some industries, you have to recruit from LinkedIn. In her industry, in the service industry, and in B2C, Instagram is a perfect way to go recruit and see what somebody’s already doing out there for content, social media, because now you know you have an A player. If you got somebody out there really producing quality content that’s a hairstylist, you know you have an A player versus a B or C player. That was a huge golden nugget I want everybody to take note of.

Great point.

Back then, we talked about patrons. Amy really has what she’s created brand loyalty, and most of them have a really high retention rate. Would you say that the retention rate was, Amy?

Definitely over 50%. We’re always striving for closer to 70. It depends on the average. Certainly over 50%, but like some of our top stylists, between 70% and 90%.

On customers, we’re talking about stylists. For customers who are patrons, what is your retention rate?

That is the patron retention rate for a stylist. We would look at all the retention rates by stylist.

The retention rate per stylist is 50% or above. Is that good in your industry?

That’s excellent, yeah. You have to remember you’re looking at a rolling period of time of 3 to 6 months. Some people are getting haircuts more regularly. If you have long hair, it might be coming back a couple of times a year. If you are doing highlights and you only need a balayage, and it grows out over 4 to 6 months, you might not come back. You have people who are getting roots done, like me, who are there every couple of weeks. It depends on the client and the nature of the clients that are in your area and the things they’re going to do. It was always very high, and it really worked for us. We definitely had a fierce following from clients, loyal clients.

Now we’re going to move into the 6th P. The 6th P is a reason everybody’s in business. Nobody’s in business to fail. Nobody’s in business to lose money. Last P is called what, Amy? What’s the most important?

Profit, baby.

I’ve looked at a lot of different salons, evaluated salons, and sold salons. I’m pretty big in the industry, and I’m valuing a lot of businesses. Just because your revenues are multi-million dollar does not mean you’re profitable, my friends. Here’s what I say about profits. Lack of profits is never, ever the problem. It is a symptom of not having the other five as part of your solid foundation. If you do not have the right people in place, especially in this industry, you’re going to lose dollars, you’re going to lose clients like that, you’re going to lose profits. If you do not have multiple ways that you get paid, then you’re going to lose profits. Let’s stop, pause right there. How did you do during COVID, and how did you survive?

COVID was tough. During COVID in Connecticut, I had three salons at the time. It just opened my first franchise. I did open my first two units.

Proprietary asset. She had an FDD agreement, a franchise disclosure agreement. Sorry to interrupt, Amy, but that’s another proprietary asset.

It was just terrifying because everything just turned overnight, and the beauty industry was hit super hard because it’s a very, like, one-on-one personalized service. We were closed for three months by the government mandate, and we still had to pay our rent. I was just like, “What am I doing with my life?” When we had to reopen, it was just so much. We had to take people’s temperatures before they came through the door and follow all these crazy things, wearing all these gloves and masks.

Standard operating procedures are the secret sauce to running multi-unit operations smoothly. Share on X

How were you generating a profit when you guys were closed?

There was no way to do it. You’re closed, and that’s that.

Did you keep your employees? Were you able to keep yourselves?

Yes. Everybody was able to just sit tight, and we reopened. I did have a small walkout in one of my locations, and I was just like, “What am I doing? I’m regrouping.” It’s like, “I didn’t sign up for this.” Right before COVID, I had all these irons in the fire for franchising. I was going to grow up big through franchising. After that, I was just like, I could barely just keep the doors open and just keep my head above water. I just took a step back, and I was like, “Maybe this is not for me.”

Most entrepreneurs will quit three feet from gold. There’s a book out there that I highly encourage everybody to read called Three Feet from Gold. It’s based on a true story of pioneers digging for gold. She didn’t quit. She questioned herself, but she didn’t quit.

I will say that I went as far as to hire my first broker to try and exit in 2020.

Before you get into that, let me finish these Ps. Lack of profit is never the problem. It’s a symptom of not having the right team in place. Not having multiple products, because you saw restaurants go out of business there on COVID because they had one way they got paid. Whereas other restaurants got very creative and started YouTube shows where they would say, “Buy these baskets, what level do you want? 100 all the way up to 600,” which included the food in the baskets. They would have cooking shows, wine-tasting shows, and all of that.

You have got to have multiple ways you get paid. If she didn’t have great processes, she would never have had the employee retention that she did. If you do not have the patrons, if you do not have the products, if you do not have the processes in place, you’re losing money. If you have not protected your IP, you’re losing money. Customer retention. You’re losing money. Do you see why profits are never, ever the problem? It’s a symptom of. I will tell you, she had one of the highest profit margins in the industry. That’s because everything else was so buttoned up. Let’s get into that exit conversation.

During COVID, I did talk to a broker, and after, just after COVID, just regrouping. I thought, “Maybe I should just think about it,” because it was a lot, obviously, a lot for everybody. You know what happened during that time is that the person that I hired did not deliver. I did not see one, not even one viable purchaser, not one buyer in twelve months of the contract.

Not one buyer in twelve months?

No.

Let’s break this down a little bit. How did you find the broker, and what were their credentials? I really want entrepreneurs to understand. All brokers are not created equal, like all attorneys and doctors, and hairdressers are not created equal. What credentials do they have? How did you find them?

I was talking to someone else who I was trying to find a mentor in the industry, like someone to help me not feel defeated. I reached out to this guy whom someone told me could be helpful. He referred me to this broker after I was like, “I’m not sure I want to do this.” It was a referral. I trusted it because it was a referral. I did look at a couple of other options, but it seems like it was good.

What credentials does this person have?

Other than that, he’s a broker, supposedly, and has sold other businesses and talked a good talk. I felt, here’s the good news. The fact that he was not successful is great because, actually, when I was doing the background.

For you, but it’s not great for a lot of people to hire a broker and not be successful.

I was trying to say that. It ended up being a good thing because I just forgot about him because he never brought anybody to me. I got back into it and recovered from COVID. The next thing you know, I started growing again, and I decided, “I’m not going to do FDDs. I’m not going to do franchising.” I’m going to grow through corporate growth because I can rely on myself. I am going to become really focused. I can follow through. I just went back to that.

You went back to the basics, and you went back to your core focus, which is going to corporate stores because you know how to do it.

100%.

When did you decide? You were contacted by a private equity group, too. Let’s talk about that real quick.

A couple of years later, I was back in the groove. I had four locations at that time. They seemed interested, and they contacted me out of the blue again through someone I’d known. I trusted the process of 4 to 5 months of really being seriously strung along, a lot of big numbers tossed around about how they were going to take it, how they were going to grow. They wanted us to be a part of it. They didn’t want us to be a part of it. They were going to pay us all this money. They were like, “First, we’re going to sign an agreement, and you’ll get it in like twelve months, but not a penny at first.”

No money down?

Yes. “I’m going to sell you my business. I’m not going to have any income.” I just like, “Who would do that?”

Avoiding Bad Deals And Unqualified Buyers

You’re going to sell the business or pay no money down. I have to repeat this because it is so imperative for entrepreneurs to hear. You’re going to sell your business, your life’s work that you built, and you’re going to get no money down and no income for a year.

They were like, “This is how it’s done.” That was that. I was like, “Time out. No, this is not how it’s done. It’s certainly not how I’m going to do it.” We walked away. Best thing I ever did because once again, I recommitted to the cause, and I ended up opening two more units that year because I was so fired up. I was like, “I do not need these guys. I’m going to keep going.”

Let me just tell you guys a few things real quick. When you’re going to interview a broker, you want to know how long they’ve been in business. You want to know if they’re the owner. If they are the owner, they are going to be working on your business. You want to know who spends the advertising budget because if it’s a broker in a firm, they have no control over how the money gets spent. You want to talk to the owner too and make sure that there’s going to be enough money targeted for your campaigns to sell your company.

You want to know how much experience that owner or broker has and how long they have been in the industry. You want to know how many businesses they’ve actually sold. You want to know not only how many LOIs or offers they’ve read, but how many of them actually closed and got to the closing table. Do they have any specific industry experience? It’s not as important as everything else, but those are the things. I’m here to tell you, if you’ve got a private equity company that calls you and they have no businesses in their portfolio, this is typically called a search fund or a private equity startup want to be that has no businesses in their portfolio, walk away from the startup.

Walk away. Do not walk away. Run from us, run. Any private equity groups that have nothing in their portfolio and run from us run from a search fund because they have no money. There’s Cody Sanchez out there and all these other, I do not know what you call them, entrepreneurs. Anyway, you got Cody Sanchez. You got all these other people telling consumers how to buy businesses without any money down. Run from us, run. You have to have money down. You have to have skin in the game. You cannot take a deal like that.

She could have lost everything. Everything. On that seller’s note, there probably was no PG, which is a personal guarantee. She’s getting no income. She would have no rights. If you’re going to do seller financing, we get PGs. We make sure that there’s a lien on Whip Salon. We make sure there’s a lien on all the proprietary assets, all the domain names, everything. You’ve got to run from us, run, do your due diligence before selecting an M&A advisor. Do not just grab a broker off the street. This broker probably sells coffee shops and very small businesses. You want to look for somebody who’s a small-to-mid-size M&A advisory. Go ahead, Amy.

After that, as I said, I recommitted to get, I really always loved running Whip. It was very fun. It’s my baby, and I loved doing it. Actually, enter Michelle. Michelle enters the chat.

Before we get to Michelle. You just said another golden nugget. You dropped all these golden nuggets. I got to pause. There’s a lot to unpack here. She just dropped a bombshell. It’s my baby. Every owner tells me, “This is my baby. My business is my baby.” No, it’s not. Your baby is your kid at home. Your baby is your friend, your husband, your life. Your business is your most valuable asset. It is not your baby.

I need you to detach from your baby because everybody says, “It’s my baby. It’s worth $10 million.” No, it’s not. It’s worth what the buyers want to pay for it. It’s my job to tell you your baby’s not as pretty as you think it is. Remember the Seinfeld episode? When Elaine looked at the baby, we were like, “This is the ugliest baby ever.” It is not your baby. Detach. It’s your most valuable asset.

Even though Amy said it’s my baby, Amy still had the wherewithal to know, “I’m not going to do this forever. Let me build a sustainable, scalable business that can run without me, that will sell one day when I’m ready.” When business owners tell me, “You’re never going to sell your business,” wrong because there are events that will drive you to sell in the business, and you will not get the value you want. Amy got more than what she wanted. Now here comes Michelle. Go ahead, Amy. I had to make that clear for the owners.

Thank you. It’s funny because I do not usually use that term. I agree that language is important, and I just meant it was something that I had created.

You were more attached to it. You were not as attached to it as most business owners are to their business. You viewed it as a valuable asset that’s going to get you from here to there.

I did. As I was saying, Michelle entered the chat, and in an interesting way, she reached out. Her team or you reached out to me through LinkedIn. I’m not like a big LinkedIn power user. I never go on LinkedIn. That’s why this is so tenuous. It makes me scared. Thank God I went on LinkedIn for whatever reason I did that day. She was in my DMs and was like, “Have you ever thought about selling?” I looked up Michelle, and I was like, “Man, this lady seems like the real deal. She’s sold salons before.”

She wrote a pretty amazing book, which I read immediately. I set up a meeting with her, and I will never forget that meeting. I know you will not either, Michelle, because I was having a day. It was just like one of those days where there were some issues happening. When you have brick-and-mortar, things are always breaking, or it’s just whack-a-mole sometimes, especially with six brick-and-mortar locations. I was feeling a little bit defeated that day, I guess. Anyway, I was in my car. I met with her.

You also fell in love. Go ahead, Amy. I’m sorry.

I was like, “Go ahead. Impress me.” I’ve been burned by these first two that go at this. I was like, “What is this lady going to tell me? What is she going to tell me?” It was the most miraculous meeting because everything you said, Michelle, honestly, was like, “I get that.” You totally turned me around to like 180. I was completely bought in by the end of the call. We talked for a full hour. I had my list of questions, and you answered them so professionally and deftly. I was like, “You gave me a lot to think about.” I went away for like about a month.

Let’s just say this real quick. She was completely stone-faced. You see Amy today. She’s all smiles. She’s all laughs. She’s all that. This was Amy. I do not think she’s in a car. I do not think she ever cracked a smile. Not once. I’m like, “This lady is tough.”

As I said, it was never the best day, but you were great and just so intelligent, and you could tell that you knew your stuff. I brought my husband in like a month later. I thought about it, and I said, “He helps me with business-side things and doing like, a lot of the books.” I said, “I think we should meet with her.” He’s, “If you think I’m a tough customer,” he is a very skeptical guy. It was just obvious that it was the right group to finally get us to the finish line.

He read Exit Rich too. Just a correction here. It did take about nine months to get to the process of where you guys hired me.

It was a while. It did take nine.

They both did read the book. Go ahead.

It did take nine months. With that being said, once we hit the ground running and went to market, end to end, four months were exciting. That was insane.

For six locations.

Especially for that. It was just the process itself that was so seamless. We just like to get right to work. Now, when Michelle valued the business, I also want to say this. Kevin and I had a figure in our head. Michelle came back at more than double that figure. She went through the valuation process of the 6Ps, and she rated us on a scale for every single one. She felt strongly that it was higher than what we had ever imagined. I remember Kevin’s reaction to that was, “No. That’s not possible.” I was like, “They’ll do their job, okay? They’ll do their job.”

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I know you kept saying, “That’s not possible. I do not believe it.”

Maximizing Value Through Competition

You guys really did a great job of extracting all the value out of it, but it was just more than that. When we first did the valuation, and you went to market, you said, “Just forget about us. I’ll get back to you.” This was like in February, you know, maybe the beginning of March. Maybe March 1st, we listed the business, and you were like, “I’ll get back to you.” I was thinking in my wildest dreams right now. It’s August. I was thinking that by October, if I had one interested person, I’d be thrilled. In ten days, they came back to us, and they had 6 offers in 10 days and high-quality buyers. People we met, it was like, we couldn’t even pick them because they were such good quality. It was pretty astonishing. I was so impressed. Michelle was really something else.

Thank you. We ran an auction process, a silent auction process, in Connecticut. Sometimes we run silent auctions, and sometimes we do not. It depends upon the market. In Connecticut, there are probably 20, 30, 40, or 50 buyers from one business. The problem is most of them do not even get a shot at an LOI because by the time they get to the table, they’ve already got an LOI in hand. I told my team we’re running a process in Connecticut because we want everybody to have a fair shot. I gave everybody two weeks to get their bids in. Two weeks, that’s it.

We did not set up any calls except for one. We set up one call, but then we did not set up any other calls until we presented all the offers. I think when we set up that one call, Amy, we did have an offer for you. We never set up a call with Amy without having LOIs in hand. We set up one call and determined they’re not a good fit. We brought two other buyers, a really good fit, and I set up those calls. She did not meet with any of the other buyers. It was very streamlined, and obviously it was their choice. Go ahead, Amy.

It was hard to pick because they were, like I said, great buyers. Not only that, they were coming in above the asking price and were also blowing our minds.

I doubled that valuation from what they wanted. Because we ran a process and brought multiple buyers to the table, we got offers. Almost all of the offers were higher than the asking price. They ended up. You go ahead and finish, Amy.

We ended up, as I said, picking a great team to take over. We’re really happy with them. We really clicked with them. I thought they had great energy, great vision, and were just the right fit. We just felt super confident, and we went for it. There were a couple of sticking points along the way, but for the most part, it was a pretty straightforward transaction. Four months is astonishing.

It is astonishing. One thing I wanted to point out too is that Amy asked us, who would you go with? You remember that, Amy?

I sure did.

I told him exactly who I would go with because that person was the most likely to close. That person had to buy the business if they couldn’t get funding in place.

They were also the best fit as well. I thought it was really a great fit. It was just amazing. The thing about working with your team and with you is that even though you have a lot on the go, it was just very impressive. We always felt like we were your only client and favorite client. You really give a very personalized and very quick response. With any doubts or issues, there are highs and lows when you’re going through a sale. It’s very emotional. It’s very stressful. You guys are good about talking us off the ledge too when we need it.

I had to make a few calls to talk to you and Kevin off the ledge.

It’s the process, though. It’s just how it goes.

As she said, there was some stickiness along the way, but we got through it, and we managed all the due diligence.

Good.

Anything else you’d like to add?

It was a great decision, and I’m just so happy that it went by so quickly. We were able to close at the beginning of the summer, and just for my personal life, that was just like the perfect timing. I’m just astonished by how smoothly and quickly everything went. It was just very successful, and I am so grateful for you.

Thank you. You did help. You and Kevin helped make it easier because you did operate on all 6Ps, number one. Number two, both are coachable. I do not like it when people hire me to sell their companies, and they start to tell me how to do my job. If you’re one of those entrepreneurs who want to hire me, do not hire me. Hire the guy who never sold her business. I’ve got a client right now that’s like, “You need to do this, and you need to do that.”

I do not know how to run salons, but I know how to sell them. We’re always looking for those coachable clients who understand who we are and that it’s our job to get you more money. We got Amy and Kevin more than they ever thought possible. They made it easy because they were coachable. They listened. They gave us everything exponentially, and they were very attentive while running the company and taking all their vacations. They helped the process because I can only do so much. I need a cooperative seller.

We were such a good team, too. After I sold it, I wrote this article about selling in the salon world because it is unusual, actually, in the salon world to exit successfully. Especially this much so.

Let me explain why real quick. A lot of salon owners are revenue generators. If the salon owner is working in a business generating revenue, then many times that income comes off the top because those clients are not obligated to stay with that salon, and many of them will leave. It’s much more difficult to sell salons to salon owners. Nothing impossible. I do not want you to listen to this and say it’s impossible because with us, there’s nothing impossible. Go ahead, Amy.

After I put that article out, just saying what had happened, I launched a coaching service called Your Salon Pal. I had some people reach out to me as a result of that and say, “How did you do that?” What was really interesting was how you did that. I want to do that too. What’s really interesting is that sometimes when talking to people, they’ll be like, “What am I going to do next?” I’m like, “You’re going to do whatever you want.”

Mapping Out Your Next Chapter

This is an important nugget. I do not want to cut you off, but I just have to say what she just said is another huge and I want a huge point that I want you to take note of it. Business owners will never exit their business until they have figured out their next chapter, their new beginning. Amy had that. Amy’s had that figured out. Go ahead, Amy.

I loved the part of my business, especially growing people’s careers. When I was running a salon, I was always looking for a mentor myself. Now that I have ten years of experience and I’ve exited, that’s what I’m working on.

Million-dollar exit. Let’s get that in there.

I really want to focus on that. I already have some clients that want to focus on exiting and some clients that are focusing on growth. That’s helping people achieve what they want to do with what I’ve done and achieve their dreams. That’s really where I’m headed. It’s just really a lot of fun so far. I’m just enjoying it. I’m so grateful to Michelle for helping me get to the finish line so I can start my next thing. Without you, I wouldn’t have.

Thank you. What’s the name of it?

Your Salon Pal.

Your Salon Pal is the name of her new company. Think about this. If you think about exiting, think about your new chapter, your new beginning. Amy and I have some exciting news. Not only did I sell her company, not only are we friends, but now we’re going to be partners. What are we doing, Amy?

You can't successfully exit your business until you've planned your next exciting chapter. Share on X

We’re writing a book.

Not just any book, Amy.

Exit Rich Salons.

We are writing a book called Exit Rich Salons, and Amy is contributing. My book is there, Exit Rich, but she’s contributing all of her experience of how to build not just a business, guys, but a business that is sustainable, scalable, not owner-dependent, that you can sell for millions and millions of dollars. Amy and I are so excited, so delighted, that we’re going to be joining forces and writing Exit Rich Salons. The second book is Exit Rich. I cannot be more thrilled. I couldn’t even ask for a better partner, a better person, because Amy is wonderful. She’s honest, she’s ethical, she’s trustworthy. If you’re a salon owner tuning in, hire her. She’s going to send you to me. She’s going to send you to me to finish the job.

You got it, girl. Thank you so much.

Any last-minute golden nuggets for building a sustainable, scalable, sellable business? Any last-minute thoughts you want to leave with our audiences?

No, other than that, I really think you’re the real deal, Michelle. I really appreciate you having me on today and having this conversation. It’s just been such an amazing ride. I’m looking forward to the future.

Thank you so much. It was a pleasure having you on. I love it when my clients can become my friends. I remember telling you this story when I was in franchise development and franchise sales. I would never, when I was traveling, stay in a hotel. I stayed at their homes. I like to build not just businesses to sell, but I like to build relationships that last a lifetime. Thank you all so much for tuning in and joining the show.

I told you, as I always do, we always underpromise and overdeliver, lots of golden nuggets, lots of content. Make sure you subscribe to the show. Please share this with your network. Your network equals your net worth. Make sure you get this message out. Make sure everyone you’re in contact with tunes into this show. Also, go back and listen to yourself because it’s like drinking from a fire hose.  Until I see you next time on the show. Thank you. Plan your exit.

 

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