sleslie31

I have an opportunity to take over a salon at a reasonable price. Well, at least it sounds like it is after reading some of the other posts.

It's a 10 bed facility with 1 hex 1 SuperNova and 1 40 bulb pull down.

Apparently the story is this...It's been around for years, and then sold 3 years ago to a couple who ran it into the ground (supposedly dirty and not well kept). Then the owner of the complex had someone he knew close it down and totally refurbish it. Not all the beds are new, just half.

They only reopened last April, which from what I'm reading is right in the middle of busy season. So they didn't really get a chance to see what their full potential was before they put it on the market last fall.

Here’s the potential I see:

It's listed for $95k, including equipment, fixtures, etc.
It's on a corner space in one of the busiest shopping centers in town
The building owner basically wants someone in that space, so he's willing to cut a rent deal
There are 2 other salons within a mile. One was a ***hole, and the other was closed in the middle of the day. The plant inside was dead, so maybe closed forever.
There are 2 gyms within walking distance, a travel agency and it's a sister city to a college town.
There's been virtually NO marketing done at least within the last year, maybe longer.
Their hours are crazy- like 9-3 on Saturdays, and closed at 6pm on Friday night. Wouldn't that be a busy day?


I think I can turn it around because it's in such a great, convenient location. I've got the marketing side down.

But you guys are scaring me with 'JASON sucks' and save for two slow seasons, etc.

People have asked this question on the newbie board and everyone said RUN!

I'm not looking to get rich. I've been a stay at home mom for 5 years. Now that my kids are both in school I am out of my mind board. I do build web sites, so that's an easy marketing tool for me I suppose.

I wouldn't mind making $30k a year (since I'd have to hire a part timer). This is more of a challenge and a sanity keeper.

I just don't want to buy a time bomb and lose my azz. I'm thinking with some good marketing strategy it could only go up.

What do you guys think? I know I'll get some smartazz comments, but just lay it on me.

I know there's a learning curve. But I'm all about learning, that's why I'm doing research beforehand here :)

BP

Did they give you previous year $ figures?

sleslie31

No. I had to sign an confidentiality agreement, and havent gotten the numbers yet.

According to the broker, the people who ran it into the ground never kept P&L so there really isn't anything for me go to on but figures from several years ago.

I'm not even sure that the current owner/partner has kept good numbers since they opened in April. I think hes a maintenance type that probably got a good deal to fix it up & run it until it sells.

I'm looking at it from a start from scratch type thing :)

unity

First, 95k seems a but steep for a 10 bed salon, no matter the condition. You WILL need to get the books and look over them well, we can help you with that.

If you do, you WILL want to change the name and re-paint the place. You want to separate yourself from its past as much as possible. Since its a busy place, you may want to consider giving out the first visit free - something I am not a fan of, but if half buy packages your off to a start.

There are billions things that could be done right and a trillion other that could be done wrong.

Note: Around here a salon is listed for 80% of its annual sales. So if a salon did 100k in sales, it would list for 80k. Normally they sell for 60% when all is said and done. Now every market is different so dont quote me! :)

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OMG! I made a post! :)

RedLime

What's the demographics within a 3 mile radius? How many clients are in the salon software? I would definitely recommend, as others have, to have an accountant review the financials prior to even consider buying it.

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Scott
Red Lime Products, Inc.
redlimeproducts.com
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megatanman

95K for a 10 bed salon is wayy to much.Im willing to bet it does about 80-90K a year.

Depending on the rest of the equipment it might be worth 30-35K.

You will probably have to upgrade the older equipment and do a complete salon make-over to bring the traffic back in.

caribbean tan man

u need to see tax returns for as many previous years as possible. u can also look at bank deposit slips anc credit card deposit slips to get some figures. even the software can give you income figures.

ALSO A DIRTY SALON reputation is hard to change, youll DEF need a name change!

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someone PM me when a good tanning topic is posted. :lol:

rayway

Sounds like way to much money for me for a 10 bed salon with a bad rep. With no documentation I would only pay the amount that the equipment is worth. Becasue you are basically not buying a business you are just buying equipment and also agree about changing the name, paint, look etc.

sleslie31

Thank you guys so much!

Yes I was planning on a name change.

The building owner, however did have it all redone on the inside. They closed it down for a couple months to do that and reopened last April. I shouldn't have to do it again after only one year should I?

I went in and pretended I was a customer. It was quite nice actually. Of course you always see things you can do 'better' when looking at someone else's stuff. But it was clean, smelled nice, etc.

I appreciate the tax suggestion. I can go to the county online and find that out myself.

And thanks for the sales price calculation. I at least have something to go on now. Lets see what I can find out.

Thanks again!

sunsally

So you would like to make $30K, not get rich? Why not get rich? If you are going to tie up 100K of your money, just to make 30K, that means it would be over 3 years of solid effort before you even got back to "0"!


Stay at home mom with kids in school. "Mommy - can you go on the field trip with us??" "Nope - I've got to work". "Honey, what's for dinner?" "Are you kidding me? I was in the salon all day, I'm exhausted!"

Summers? Spring break? Christmas holidays? If you are going to try to work the "days" -- it is hard to find someone else just hanging around with nothing going on who can "fill in" for you when you want time off.

Oh - and the Days are slow! The evenings and weekends are when you'll see most of your traffic, and have the best selling opportunities. So do you want to do that yourself, and give up your family time? Or do you want to trust your $100K investment in the hands of a couple of PT, $7/hr 18 year olds?

Someone calls off their shift -- you cover it. Someone quits - you cover until you find, hire and train someone new. You fire someone for stealing - you cover it.

A hex is worth $1K

A Supernova? A few thousand.

A "40lamp pulldown"?? Not sure what that is, but again - maybe a couple K

Other stuff? Sounds like not worth much.

Then factor in the "run it into the ground" factor. And closed down twice (with lost packages each time??). Takes time and effort - and money - to recover from that sort of history.

Get as much data as you can. The more they say "we don't know, we don't have that", the more the price drops.

But more than anything - look at this as an investment. After all -- you could go a 100 places right now and make $30K/year -- without having to put $95K of your money down first to get that!