View Single Post
Old 04-01-2013, 04:00 AM   #57 (permalink)
Black Sun
 
Join Date: Nov 19 2010
Location: GA
Posts: 933
Rep Power: 14 Black Sun is on a distinguished road
Re: Going to take over salon?

Quote:
Originally Posted by sunsally View Post
$13k/month expenses with $150 and 20 customers/day average pretty much tells you all you need to know.

The costs are way, way, WAY too high for the revenue here.

Even with NO advertising - they have been there 2+ years. By sheer LUCK they should be able to make more than $4k/month. And you have only worked there 2 months - busy season. If they are seeing 20 ppl/day now, it could be 1-3 in September.

It wouldn't matter if the equipment was worth 100K and they were asking 50k. Unless you are planning on just selling off the equipment, you would be paying to sign up for a commitment that loses approx $9k/month or $100k/year.

It also doesn't matter that the rent is pre-paid for a few months. That just means that, on average, you would only lose $5k/month initially. So you would pay $40-50K, spend some more on licenses, insurance, signage,... and then lose another $35K by the time January hit - and then you would start losing $100K/year.


All that said - I also have to agree with BlackSun -- planning on working an estimated 40-50 hours --- whether behind the desk or out front - for a business that is deeply deeply in debt from the start -- says it will never get out of the hole. When you open the first location of a a new business that is cash poor to start...., you need to plan on working 70-80-100 hours/week initially --- in, out and around the business!! It is non-stop. It is weekends. It is evenings. It is holidays. It is every time a staff member quits or no shows. It is doubling up with them to train. It is monitoring while they work. It is going over the books. Paying bills. Ordering supplies. Updating the computer................AND trying to get out and build a "presence" in the community!

This is not the investment for you and probably not for anyone.
The BEST reply yet.
Black Sun is offline   Reply With Quote