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Due Diligence Guide · Microblading & PMU Studio

Due Diligence Guide: Buying a Microblading & PMU Studio

Verify licenses, assess artist dependency, and protect your investment before acquiring a permanent makeup business.

Find Microblading & PMU Studio Acquisition Targets

Microblading and PMU studios trade at 2x–3.5x SDE, but value depends heavily on staff independence, licensing compliance, and client retention. Thorough due diligence uncovers whether revenue survives the seller's departure.

Microblading & PMU Studio Due Diligence Phases

Phase 1: Financial & Revenue Validation

Confirm reported earnings are accurate, recurring, and not artificially concentrated in the outgoing owner's personal production.

Verify 3 Years of CPA-Prepared Financialscritical

Request accrual-based P&L statements, tax returns, and bank statements for three full years. Reconcile booking platform revenue against reported figures.

Analyze Owner vs. Staff Revenue Concentrationcritical

Break down gross revenue by artist. If the owner generates over 50% of studio revenue, post-acquisition earnings are at significant risk.

Review Touch-Up Appointment Cadence and Rebooking Rateimportant

Touch-up appointments every 12–18 months drive recurring revenue. Confirm rebooking rates exceed 60% as a baseline indicator of client loyalty.

Phase 2: Licensing, Compliance & Operational Risk

PMU studios carry meaningful regulatory exposure. Validate all permits, certifications, and health department records before proceeding.

Confirm All Artist Licenses and Bloodborne Pathogen Certificationscritical

Obtain copies of every artist's current state PMU or cosmetology license and OSHA-compliant bloodborne pathogen certification. Verify no lapses or violations.

Audit Health Department Inspection Historycritical

Request the last three health department inspection reports. Any unresolved citations, sterilization violations, or permit holds are deal-level concerns.

Review Lease Terms and Transferabilityimportant

Confirm the studio lease has at least 24 months remaining, includes an assignment clause, and that leasehold improvements transfer cleanly with the sale.

Phase 3: Brand, Client Assets & Transition Risk

Intangible assets — reputation, social following, and client goodwill — drive PMU studio value. Validate their transferability before closing.

Assess Online Reputation and Social Media Ownershipimportant

Audit Google reviews, Yelp ratings, and Instagram follower counts. Confirm social accounts are branded to the studio, not the seller's personal profile.

Evaluate Client Database and CRM Qualitycritical

Confirm all client records are documented in a transferable platform such as Vagaro or Mindbody. A database existing only on the owner's phone is a red flag.

Review Seller Transition and Non-Compete Agreementimportant

Negotiate a 6–12 month seller employment or training agreement and a geographic non-compete to protect client relationships during the ownership handoff.

Phase 4: SBA Financing and Deal Structure Validation

Verify the Microblading & PMU Studio acquisition qualifies for SBA financing, the purchase price is supportable by the verified cash flow, and the deal structure protects the buyer's downside.

SBA Eligibility Confirmationcritical

Confirm the Microblading & PMU Studio meets SBA 7(a) eligibility requirements: the business is for-profit, U.S.-based, within SBA size standards, and the buyer meets personal financial requirements. Some industries have specific SBA restrictions — verify before LOI.

Normalized EBITDA vs. SBA Debt Service Coveragecritical

Model verified normalized EBITDA against projected SBA loan payments at current rates. A $1M SBA 7(a) loan at 10.5% over 10 years costs approximately $13,000/month. The Microblading & PMU Studio must generate at least 1.25x debt service coverage after a market-rate manager salary to pass underwriting.

Seller Note and Earnout Structure Reviewimportant

Confirm the seller note is properly subordinated to the SBA loan and goes on 24-month standby as required by SBA rules. If an earnout is included, define exact measurement metrics, time period, and dispute resolution process before signing the purchase agreement.

Microblading & PMU Studio-Specific Due Diligence Items

Request proof of current state-required PMU scope-of-practice compliance, as laws vary significantly and can restrict services mid-operation post-close.
Verify all equipment — pigment machines, needles, sterilization units — is owned outright, not leased, and meets current health department standards.
Confirm the studio carries professional liability and medical malpractice-adjacent insurance covering adverse cosmetic outcomes and client injury claims.
Review before-and-after portfolio quality and consistency across all employed artists, not just the seller, to validate team-wide service standards.
Assess pigment supplier relationships and product inventory; proprietary pigment formulas or exclusive supplier agreements can represent hidden transferable value.
Verify that the purchase price divided by verified normalized EBITDA produces a multiple consistent with current market comparables for Microblading & PMU Studio transactions — overpaying by 0.5x–1.0x EBITDA is the most common buyer error in this sector.
Confirm the lease terms are assignable to the buyer with the landlord's written consent, and that the remaining lease term extends at least through the SBA loan term — lenders require this before funding.
Request copies of all material vendor contracts, supplier agreements, and service relationships — confirm which are transferable, which require novation, and which may terminate on change of ownership.

Standard Document Request List

Before signing a Letter of Intent, request these documents from the seller. Missing or incomplete items are a red flag — not a reason to proceed without them.

3 years of business tax returns (Schedule C or Form 1120)
Last 3 years profit & loss statements (monthly detail)
Current balance sheet and accounts receivable aging
Customer/client list with revenue by account (anonymized)
All active contracts, subscriptions, and recurring agreements
Equipment list with condition and estimated replacement cost
Employee roster with tenure, title, and compensation
Any pending or threatened litigation or regulatory complaints
Owner compensation and discretionary expense add-backs
Year-to-date financials vs. prior year same period

Frequently Asked Questions

What valuation multiple should I expect for a microblading studio?

Most PMU studios sell at 2x–3.5x SDE. Studios with trained staff, strong rebooking rates, and low owner dependency command the higher end of that range.

Can I use an SBA loan to buy a permanent makeup studio?

Yes. PMU studios are SBA 7(a) eligible. Expect to inject 10–20% equity. Sellers often carry a small subordinated note to bridge any financing gap.

What happens to clients if the seller leaves after the acquisition?

Client attrition is the top post-close risk. Mitigate it with a seller transition agreement, warm client introductions, and retaining at least one familiar staff artist.

How do I evaluate whether the studio's social media following has real business value?

Correlate follower count with actual booked appointments and new client acquisition sources. Engagement rates and DM-to-booking conversion matter more than raw follower numbers.

More Microblading & PMU Studio Guides

Buy a Microblading & PMU Studio Business →Sell a Microblading & PMU Studio Business →Valuation Guide →EBITDA Multiples →LOI Template →SBA Loan Guide →Deal Structure →Acquisition Checklist →Exit Readiness Checklist →Financing Guide →Buy vs. Build →Common Mistakes →Post-Acquisition Integration →Roll-Up Strategy →Roll-Up Guide →Find a Broker →

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