| Re: I think I've come to the right place.
Ok - I'll start....
1. Rent is very good -- that alone makes it attractive
2. When you say "no air" -- does that mean there is no air conditioning?? If so, plan on an expense of at least $10K -- that is critical! That is a critical question to ask her (or the landlord) - how many tons of HVAC are there? Also condition of the furnaces since it is 23 years old and you are in Michigan going into the heating season. Make sure landlord would cover those if they needed replacement (or have a HVAC guy come out and give you an estimate on their life expectancy and current condition and replacement costs if necessary)
3. Need to also find out the electrical situation. How many amps are there total, what sort of amps and wire size running to each room. My guess is it only has 200 amps, which will limit you. Again, have an electrician come out and give you an analysis of what it has, and what it would take to upgrade it if necessary.
4. The equipment probably has very little value at all. Find out the manufacturer of each bed, the model, and the hours (there is an hour counter on each bed, often located on the back of the bed, or underneath on what is called a "ballast tray" where all the battery looking things are contained). This will help you assess value.
5. If it JUST needed to be relamped, assume (assuming the beds are basically smaller base beds as well as the two standups) that you are looking at a cost of at least $3500 (the standups will be about a grand each) and could be more. The acrylic will cost you another $200+.
6. If it has been there for 23 years, lots of people know about it. On the other hand, if it has been driven into the ground the past few years, everyone will now be avoiding it. Can be very hard to turn that around. Shortened hours, poorly maintained equipment are the DEATH KNELL of a business and substantially reduce it's value.
OK...so you are getting the idea. Now - do this (besides the above estimates on THIS business):
1. Assess ALL the local tanning competition. Salons as well as beds in hair salons. How many, what kinds of equipment, do they look/seem nice, etc. Do a full scale competitive analysis - walk in as a potential customer, see how you are treated, get pricing information, look over the equipment, etc
2. Drive around and scout out other "Great" locations that are empty. Call the realtors and find out about rent rates to see how they compare.
3. Begin writing a business plan and assessing your finances. For THIS business, as you have planned it now, you would be spending $20K or best offer, then throwing out the equip (so no relamp costs) or MAYBE selling/trading it for a SMALL profit (less than 5K). 4 beds, 2 standups and a spray booth, could run anywhere from 25K to 100K depending on what you did. Cheaper is not necessarily better, nor is more expensive a guarantee. But plan on that expense, on top of the purchase price. Also plan on some significant advertising initially (5-10K in the first few months?). Licenses, insurance, probably need more lotion inventory, etc. Now you're looking at more like a $100K investment, even on the lower side.
Do that, check back in with your results, and tell us if you are still interested. If so, we'll go from there!
Good luck - |