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Old 11-15-2009, 08:38 PM   #23 (permalink)
Brian Oshman
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Join Date: Apr 29 2001
Location: Stewartsville, NJ
Age: 55
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Re: Do you want to open a salon?

Quote:
Originally Posted by malibules View Post
So whats your opinion on a special of 20 tans for $50.00?
We were planning on taking over a salon Dec. 1st and the owner has decided to run this special this month....leaving us to honor all these tans?
Why would you honor these tans? This is why you negotiate. The current owner will need to adjust the selling price on the day of transfer to compensate for these kinds of sales.

The only time that you honor packages (and you have no obligation to do so but it will win over screwed customers) is if you take over a salon that has closed and the prior owner screwed everyone with midnight sales.

The other time you do it is when you buy a database. Of course if you buy the place you honor current packages, that goes without saying but you don't settle for a price and then let the current owner sell you under the table without compensation. If they will not adjust then you walk. It is standard procedure to square up at time of transfer.

This is easy to do as you just pull reports and go from there. If there is no computer and you are just going by word of mouth then that is suicide. Did you get current reports? Did you see the actual last three years of filed tax returns? (not the cooked books but the actual filed returns) This is what you base the purchase price off of, not word of mouth and not just the books. The tax returns are the tangible value. From here is where you negotiate the price and then move on to compensation for packages sold during the transition period.
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