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Old 01-21-2011, 07:40 AM   #46 (permalink)
sunsally
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Re: Do you want to open a salon?

Pros:

1. You and your wife are already experienced business owners. I assume your other businesses (dry cleaning and martial arts instructor) are successful, you understand how to hire, deliver customer service, attract and retain customers, etc. This is important.

2. You are experienced in sales. This is a RETAIL business and that is critical. It also sounds like you have a good awareness of marketing.

3. Sounds like they previously had a large clientele - and you have those addresses (emails?).

4. Short term lease commitment. If it doesn't work out - you aren't tied into 5-7 years.


Irrelevant:

1. I don't see anyway this buildout was $350K, even including equipment (it appears most/all of the equipment was bought used since it is all fairly dated. It's value today is maybe $50K)





Cons:

1. You and your wife already have a LOT going on. 2 current businesses AND 3 small children. Are either of you "hands-on" at the dry cleaning business now? Sounds like you are already out of the house several evenings for the Martial Arts classes - does your family want you to be out the OTHER evenings to work in the tanning salon? Sounds like no family time left. You don't get back the "years with young kids" - once it's gone - it's gone.

2. Your equipment mix is very "average". The 7 level 1 and 2 beds are adequate - but certainly nothing special. And 3 stand-ups -- as the only "level 2" option - is not desirable. From what you're telling me and what I know of their operations, the UE, LA Tan and the local independent with "Big Red" all probably have equipment at LEAST as nice as yours. In the end, tanners are retained by a QUALITY tan - not an expensive buildout.

3. The "very high end spa and salon" may actually HURT you more than help - if they are heavy into the "tanning is BAD for you, as many are". Ditto the higher income level - many of them are highly educated and have been repeatedly been given the message "Tanning causes cancer and wrinkles" by "Doctors". Many of them have turned AWAY from tanning and won't let their kids tan either.

4. Your location is in a high traffic area - but not high residential. As you said - you go to a salon near your home. For SOME - they would rather go to a lower traffic strip mall where they can get in and out and park easily, then have to deal with going into the more congested area. Make sure you analyze what it will be like for people to try to park to use your salon, getting in and out of the strip given traffic patterns, etc. Tanning is a 'destination' business. The visibility aspect of your location just helps for marketing but not necessarily getting customers unless it is also convenient for them to use regularly.

5. You are getting late in the game. Unless you can open the doors NOW - even minute you waste is time of you "holding" it during slow season - and using your own money to front the place. Do you have adequate capital if this happens??


Continued in next post......
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