essentials

Currently I have a small salon in a small town. Most tanning facilities are located within hair dressing salons and run by the stylists. Most of these salons do not have quality equipment with good lamps, good lotions, friendly staff and most are not very clean.

The one dedicated salon closed in September, due to what I believe, poor management. I knew the owner previous to this gentleman and she ran the salon quite well and profitably. I have some of the financials from her last year in business (2005/2006.) Her sales were $80,000 for four, 20 minute lie-downs and one 10 minute stand-up.

I am on the cusp of taking over the salon and need some advice now that panic is starting to set in :)

My current salon shares space with a hair salon although we are two separate businesses. I have a good stand-up and a good lie-down machine. I'd obviously taking these with me, as well as a good client list. We are told everyday that our equipment in the best in our area and people love the friendly, professional and clean atmosphere.

The space I want to expand to has been a tanning salon for probably over 15 years. It currently has a decent stand-up and four MUCH older lie-units. One is not worthwhile refurbishing. I plan on refurbishing two units to be busy season back-ups. There are also a few business assets such as a laundry team, fridge, towels, some lotions, accessories, furnitures, room furnishings, etc.

I plan on buying another two lie-down units. So I will have two stand-ups, three lie-downs plus the two back-up, older work-horses.

The space is in a popular strip mall on a busy main street. The local high school (grade 10-12, over 900 students, 80 staff.) , hospital, call centres and several professional buildings are within walking distance. The town the business is located in is a small town, about 9500 people, although the business serves an area that has a population base of about 46,000.

The space is about 1600 square feet and has been appropriately built out for a tanning salon.

The lease is $1500 per month for the first two years, $1600 for the next and $1700 for the last two. I am going to try to negotiate a better deal.

My approximate yearly liabilities will be as follows:
Rent: $20,000
Staffing: $20000
Power: $14000
Loan: $7500
Maintenance: $5000
Phone, Internet, Supplies $3000
Insurance: $3000
Advertising: $3000
Admin.: $2400
Misc. :$1200
Total: $79,100

My projections show first year's sales of about $112,000

How does this sound to you guys???

JOHN @ URI

Why do you think you can do sales of $112K when in 2006 they only did $80K?

How did you come up with this $112K? Did a bed sales guy tell you that?

__________________

trackerbuddy

I'm guessing they took their current sales of $32k and added it to the $80k.
Projected growth, I'm starting to think that is an oxymoron.