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need advice

Posted 09-29-2008 at 06:42 PM by porter
i live in a small town in arkansas of about 5000 people, i am thinking about buying an already existing tanning salon, which makes 3 salons total in this town. the salon has 7 beds, 2 beds are brand new a couple are not as old as the others, the salon has been in business for 10 or 11 yrs, the owner is selling to travel with hubby. the salon comes with the building its in, which also has 2 other businesses in it that pay rent to the salon part. here is the catch the cost of the place is $130,000 and i'm just worried that is too much for an area this small, i have no business owning experience and i have yet to see any books or income taxes, but i have interviewed with the current owners and talked to a banker about the loan. can anyone give me any thoughts on the risk involved and if the price sounds right. the building is really large but parking is only about 15 spaces for all 3 businesses. Any advice will help, thank you
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Old
engfant's Avatar
That seems like an awesome idea seeing you already have income as soon as you buy it.

There's TONS of risks involved. Building might be out of code, falling down, on fire, plumbing is gone, roof is junk, foundation is crumbling, tennants are bums.

Who knows.
Posted 09-30-2008 at 09:00 AM by engfant engfant is offline
Old
allenj's Avatar
I would have an inspector look at the building. Owning the building can help to lower your monthly fixed expenses, but does come with different tax consequences and responsabilities.

You say you have no business owning experience, how about retail management? Sales?

If not, I highly recommend working in one or both of these areas before you take on a business of your own. Could you work at the salon for a week or two with the current owner to get a understanding of how it works?

Look at the other salons, better, same, worse? Know what you would do differently.

Good-luck!
Posted 10-20-2008 at 08:55 AM by allenj allenj is offline
 
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