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05-23-2012, 07:58 PM
| #1 (permalink) |
| Join Date: Apr 12 2012
Posts: 5
Rep Power: 0  | opinion on cost of buying a salon owner is looking to sell due to 'health' reasons...asking for $29k Very attractive and very well established, full-service Tanning Salon Located in a very busy shopping center anchored by an ethnic grocery store, liquor store, dry cleaners, Subway, 24-hour pharmacy and many other very successful businesses. Business is comprised of (2) 24-lamp, (3) high-speed 32-lamp, (2) 48-lamp, (1) High pressure 52-lamp tanning beds and (1) sunless, spray tanning booth. All equipment is in excellent condition! Owner is very motivated due to health reasons. Bring all reasonable offers! Gross Annual Sales: 76,738 SDE (Owner’s Cash Flow) 26,106 Avg Inv Value / Included in Price? $1000 R.E. - Buy, Lease, Rent Info: 1000 sq ft / $1800 month NNN inclusive Furn, Fix & Equip Value: $25,000 Utility Costs: Electricity / $250 per month 2010 2009 1 Sales1 $76,000 $85,000 2 Cost of Sales $- $- 3 Operating Expenses $72,000 $82,000 4 Unadjusted Operating Profit - Pre-Tax (1-2-3) $4,400 $2,800 5 Add: Depreciation $1,100 $1,400 6 Amortization 7 Interest on loans to business from all lenders 8 EBITDA (Total of Lines 4+5+6+7) $5,500 $4,200 9 Officer / Owner's salary $16000 $16000 10 Officers' Payroll Taxes $1,500 $1,500 Seller Discretionary Earnings - Cash Flow to Owners $26,000 $25000 |
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05-24-2012, 06:24 AM
| #4 (permalink) |
| Team TanTalk   Join Date: Aug 27 2002 Location: East Coast Age: 56
Posts: 2,888
Rep Power: 22 | Re: opinion on cost of buying a salon $6,000 Income -$1,800 Rent -$3,000 Payroll -$ 500 Utilities -$ 500 COGS and Lamps and Supplies - Insurance - Advertising - Maint and repairs - Interest - CC Fess - Etc Etc Etc |
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05-24-2012, 06:59 AM
| #5 (permalink) |
| Team TanTalk Join Date: Nov 23 2004 Location: ITA Member & Berman Supporter!
Posts: 3,136
Rep Power: 25  | Re: opinion on cost of buying a salon The "discretionary owner income" they are listing is actually them working for "free" and then taking that as their payment. As Robert K points out, the normal "payroll" at $8/hour plus small commissions with all the associated taxes etc -- would be about $3k/month. That means after the $1800 in rent and $3000 in payroll you have $1200/month left to pay all the utilities, supplies, advertising, bank fees, inventory cost, re-lamping costs, etc etc. It is running at a loss. So you could buy the "assets" -- but you have to ask what you think you would/could do differently to have it NOT run at a loss. If nothing - than don't buy. |
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05-24-2012, 10:55 AM
| #7 (permalink) | |
 Join Date: Apr 21 2004 Location: Frisco, TX
Posts: 1,502
Rep Power: 21 | Re: opinion on cost of buying a salon Quote:
now lets evaluate the current business model to determine what is not being done to generate business. Establish how much income can be generated with appropriate changes. Now you can decide if it is a salon that you would want to own. If you are still interested you can now establish the real purchase price. It is obviously not showing a profit so it would be an asset purchase. It appears that assets are worth less than asking price. This salon can be purchased for less than asking price. now these are just a few things that must be done before you should consider making an offer. I have a questionnaire I would like to send you that you can have the seller fill out that will allow the salon to be properly evaluated. Email me and I will send it to you. | |
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05-25-2012, 09:20 AM
| #9 (permalink) |
| Join Date: Apr 12 2012
Posts: 5
Rep Power: 0 | Re: opinion on cost of buying a salon from the broker, this is also included in the sale. Other FF&E: (1) POS computer system (1) Reception Desk (1) glass display cabinet for retail item display (4) chairs for waiting area (1) A/C unit / 5-ton |
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