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Old 01-03-2005, 07:57 PM   #1 (permalink)
NewbieInFL
 
Join Date: Jan 3 2005
Location: Lakeland, FL
Posts: 12
Rep Power: 0 NewbieInFL is on a distinguished road
Please bear with me... this is long.

There is a salon that I go to, and the owner approached me about buying the place. He says that he is in financial trouble and needs out pretty bad. I will try and list everything as best as possible, if someone can let me know if they think it's worth it or not.

The salon is located in a strip mall with about 15 other stores... a barber shop, a hair salon, a women's fitness center, ice cream shop, pizza place, nail salon, among other things...

It's on a fairly busy two lane road, with many subdivisions in the immediate area, and another half dozen under construction.

I know NOTHING about the tanning industry, but I do own a couple of other businesses that are succesful, so I do have good business sense, or at least I like to think I do.

About the salon... the strip mall is pretty nice. The area is middle class, and low crime. Lots of starter homes (younger people) in the area. The current owners do not advertise at all that I know of. The salon's sign is hard to read from the road, as the sign has yellow letters on a white background.

Inside the salon, there are 4 units: 1 Sunstar ZX32 3f (1150 hours), 1 Phenix Sun 28/1 HP (1437 hours), and 2 Peacock standup booths (284 and 456 hours). Other than that, there is a cash register, a computer system that is not hooked into the units, but merely for personal use and Quickbooks. There is also a moderate amount of lotion for sale that is included. Of course, the shelving, and other stuff is included as well.

The equipment is all paid for, and no money is owed to anyone, with the exception of the rent. The rent is actually overdue now (December), and they plan on paying it with the money from the sale (kinda scary).

There is 150 amps of power to the store, and a 3 ton A/C unit. I do not know if I'll need to upgrade or not... part of the reason I'm writing. The salon is not the best to look at, but it needs a female's touch that I can give it. The current owner's are both male.

As for money, it hasn't done as well as it should, in my opinion... In Feb. through May of 2004, it made over $5500 a month (gross), with March at $7800. But, since June of 2004 until present, it has been consistently around $2500-$3000 a month. Subtract all the bills, and it's darn near breaking even. It's only been open since January of 2004.

The rent is $900 a month. There are $1000 a year in taxes. The current owner says that his electricity is about $350 a month. Insurance is about $300 a month. Then, there's phone, internet, cable, etc. (Am I missing anything?)

As for customers, he's had approximately 700 different people through the doors in the last 12 months, with 163 in the last 90 days.

He wants $10,000 for the business. Any advice for a newbie?
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