Most people pick the business they can picture themselves owning. The cool coffee shop. The brewery. The bookstore with a cat in the window.
I want to talk you out of that.
The business you should buy has almost nothing to do with the one you daydream about. It has to do with the one that actually fits your needs, your skills, and the life you're trying to build. Those are rarely the same thing, and confusing them is how people end up miserable owning something they thought they wanted.
Here's how I actually landed on a hair salon.
I started with the people, not the product
I spent 15 years in tech and 6 of that managing people. I knew one thing about myself going in: I'm good at managing skilled people who care about their craft. I did not want to run a business full of high-turnover retail employees clocking in for a paycheck. I wanted to manage people who were invested in what they do.
That single requirement pointed me straight at skilled trades. Electrical. HVAC. Plumbing. People with real expertise and pride in their work.
So I started researching trades. And I hit a wall almost immediately.
In Virginia, you can't just buy a plumbing or electrical company and run it. The business has to be tied to a license, and the license requires years of experience I didn't have. To own one without holding the license yourself, you need a licensed partner with an ownership stake. In a lot of states that partner has to own a majority, 51% or more. In some it can be as little as 1 to 5%, but it varies wildly.
Think about that. For my first business ever, I'd have to hand a controlling stake to a master electrician I'd known for about a month. No thanks. Not for deal number one.
I'm not opposed to doing it someday. But it wasn't the right way to start my hundred dollar empire.
Why a salon checked every box
That research is what walked me into beauty. Hair salons, nail salons, full-service spots that do hair, nails, waxing, lashes, esthetician work.
A few things clicked at once:
The licensing worked in my favor. In Virginia I only needed the salon owner's license personally, as long as the people performing services were licensed stylists. My receptionist doesn't need a license. I confirmed this by paying my acquisition lawyer a little extra to have his paralegal connect me directly with the Virginia Board of Barbers and Cosmetologists. More on that in a second.
Multiple lines of business hedge the seasonality. Hair, nails, and esthetics don't all slow down at the same time. When one dips, another can carry it.
It's recession-resistant. People's hair keeps growing whether the economy is good or not. Same reason the trades are reliable. Demand doesn't disappear.
The location math worked. I targeted Northern Virginia because the proximity to D.C. lets you charge more for services while keeping costs like rent and supplies lower than in the city.
The specific salon I bought had deep roots. It had been in the community for years, and all four stylists had been there at least six years, with real customer bases they'd built themselves. I wasn't starting from zero. I was buying a foundation.
The thing that looked like a problem was actually the opportunity
When I looked at the financials, one number jumped out: they were spending almost nothing on marketing.
To a lot of buyers, that reads as a red flag. "This business isn't being run well." I read it the opposite way. If they're producing these results with zero marketing, imagine what happens when someone who knows marketing shows up.
But there's a trap here, and you have to know how to tell the difference between the two situations:
A growth opportunity is a good business that nobody knows about. Strong reviews, loyal repeat customers, real quality, just no awareness.
A losing business is one where the actual service is bad. No amount of marketing can save it.
Here's the test. Marketing an inferior service just introduces a flood of new people to something they'll never buy again. You can't put lipstick on a pig. This is particularly important for a local business where your total addressable market probably lives or works in a proximity around your business. If you burn through that market by leading them to a bad experience, you're actively harming your business' chances for long-term success. But when the service is genuinely good and customers come back, a single dollar of marketing turns into dozens or hundreds over the following months. That's the difference between throwing money away and pouring gas on a fire.
This salon had strong Google and Yelp reviews built over six years. The quality was already there. The awareness wasn't. That's the buy signal.
The Fit-First Filter
Before you fall in love with a business, run it through these four questions. I call it the Fit-First Filter, because fit comes before fantasy.
Who would I be managing? Be honest about the kind of team you actually want to lead. This one question eliminated retail for me and pointed me at skilled labor.
Can I legally own and operate it? Every state has different licensing and ownership rules. Start with Google when you get serious, then pay a lawyer to confirm it with the actual licensing board. Do not skip this. Finding out after you buy is a disaster.
Does demand survive a bad economy? Hair grows in a recession. Pick something people need or reliably want, not something that only sells when times are good.
Is there a gap I can actually close? Look for a good business with an obvious unmet opportunity, like low marketing spend on top of strong reviews. That gap is your growth, and it should match a skill you already have.
One more filter that's personal to me: I stayed away from franchises on purpose. I didn't want to funnel money out of the community to a corporation. I wanted as much of it as possible to stay local, including in the form of real benefits for my team. That's a values call, not a financial one, but it's part of how I chose.
The business you should buy is the one that fits the owner you actually are. Figure that out first. The daydream can wait.
Next issue, I'll get into how I evaluated the stuff that doesn't show up on a P&L at all. The intangibles. And I'll share the exact spreadsheet Chelsea and I built to do it.
Michael
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I don't run comments on the blog. A comment buried on a website just disappears. Instead, I open one discussion thread per issue on LinkedIn. That's where you can ask questions about this article, push back on anything I said, and see how other owners are working through the same decisions. I answer as many as I can, right out in the open, so we all get to learn from each other.
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