Quote:
Originally Posted by sunsally  Before you can come up with a price, you need to see records on:
a. How much total revenue they brought in
b. How high their costs are.
If I were to guess, if someone is selling this after a year, it isn't making any money. They probably sunk everything they had into opening the place and now don't have the money to run it at a loss so they are trying to get someone else to take that on. If so, you will be paying for the negative profit it is already making, along with paying back the money you give them to buy it. So you will run at an even bigger loss than they did.
With only 22,000 people in the town, probably 2000-2500 of them are tanners. That isn't many to spread across 4 salons! The others may be "dirty", but you would be surprised how many tanners don't care about that! They might also be close to their homes or work, by where they shop, run by someone they know, where their friends tan, cheaper, etc etc etc. Lots of reasons for people to tan at one salon over another!
5 beds, a spray booth and an aqua massage is a tough mix to make profitable. Will depend on your rent, how much they owe on the equipment etc etc but I'm going to guess this looks like too much of a gamble to take on.
If you can get more information about their revenues and costs, please share. |
Thank you for the reply. More demographics for this area, %98 caucasian, median age 34, 60 female/ 40 male population. At anytime in any of these salons, there is a wait. I personally know the salon owner and the reason for the sale is she and her husband own a huge company and now she is realizing she doesn't have time for it. Owning a tanning salon was something she had always wanted to do. She did say the aqua massage is a bust and she is trying to sell it. The versa spa always (I was surprised too but have personally witnessed this) has someone waiting in line for it. She has done some amazing advertising. The town was originally 8 miles North of where the salon is located and the town expanding quickly. (It's a suburb of Little Rock) The town is also a "dry county" so people get off of the new exit (where the salon is located) to go to the liquor store on their way home from work. The salon is right next to the liquor store. :)
She says her gross last year was 70,000. Doing some off the top of my head calculations of what costs were, I'm guessing her salary was only about 30,000 last year. I'm not looking at this to be our source of income, my husband has a good job. BUT, I don't want to work my tail off for free either...
Does this additional info help any greater?