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Barefoot Beach · 08-21-2007, 10:01 PM

ltaylor.....
I own two salons in Atlanta and here are my thoughts about your purchase for what they're worth. Your numbers indicate an annual overhead of only $50K. That's extremely cheap which could be a big negative. Low rent due to bad location? Owner involved full time minimizing payroll? Careful. 90K in annual sales is very weak for a 15 year old salon. Is this a rural area? The "season" is over Sept 1 and it is survival until Feb 1. A 90K salon is likely to have negative cash flow the next 6 months. Factor that into your offer. If you have the cash, I'd always go for salons with higher sales (125K minimum) and pay a higher price. See if the owner will take a sizable down payment and owner finance the balance.

08-21-2007, 10:01 PM	#20 (permalink)
Barefoot Beach Join Date: Mar 31 2007 Location: Marietta, Georgia Posts: 7 Rep Power: 0	Re: Buying a 14 yr old salon ltaylor..... I own two salons in Atlanta and here are my thoughts about your purchase for what they're worth. Your numbers indicate an annual overhead of only $50K. That's extremely cheap which could be a big negative. Low rent due to bad location? Owner involved full time minimizing payroll? Careful. 90K in annual sales is very weak for a 15 year old salon. Is this a rural area? The "season" is over Sept 1 and it is survival until Feb 1. A 90K salon is likely to have negative cash flow the next 6 months. Factor that into your offer. If you have the cash, I'd always go for salons with higher sales (125K minimum) and pay a higher price. See if the owner will take a sizable down payment and owner finance the balance.