| How to Purchase an Existing Salon
You must approach the purchase of an existing salon with the same evaluation process as opening a new salon. This starts with the evaluation of the location demographics. In addition are a list of questions you must ask.
Name and address of salon
Square footage of salon
How many tanning systems in salon
Type and description of each tanning system and manufacture date.
When did the salon open
How many active clients in the data base (tanned in the past 12 months)
Gross & Net income for 2004, 2005, 2006 based on tax returns.
What percentage of gross where lotion sales
Complete tanning price structure in detail
How many tons of AC in salon
What type of advertising do you do and how often
How much did you spend on advertising in 2006
What type of signage do you have in your salon?
What is the dimension of salon?
What are the dimensions of each tanning room?
What is the monthly rent?
How many months left on the lease?
You must calculate the changes that are required to make this a profitable salon and calculate the cost associated with the changes. These cost must be considered part of the purchase cost.
The worth of the salon should be based on 2 to 2.5 times net profit depending on the age and condition of the salon. If the salon is less than 2 years old, the value of the equipment must be considered if it is new. If a salon is for sale it is typically struggling or failing, as the potential buyer you have the leverage. |