considering purchasing an existing salon - tanTALK

tnally · 07-17-2005, 07:01 PM

My huband and I have been asked if we want to purchase a tanning salon. It is the only salon in town and has been opened almost 2 years. They have already moved to a larger place because business was demanding more beds. We don't know where to start! The owner offered at $75,000, everything included. We know we need to look at her books to see what the business grossed since it has been open. Don't know what else we should do! Anyone have any advice?

mr belvedere · 07-17-2005, 07:08 PM

Go for it! Are you kidding?! The only salon in town, no competition. You'll killem! Unless of course they only have a few 20 minute beds, then $75k might be a little steep. I wonder what the current owner's excuse is for wanting to sell?

tnally · 07-17-2005, 07:18 PM

There are 4 20 minute beds, 1 15 minute bed and 1 10 minute bed. She told us she has over 450 clients, but I am not sure how many are current. Is that a good amount after just being open for 2 years. We are in a small town in Tennessee, but it is growing and the people who are moving here are wealthy. She is a nurse and her husband also owns a business. She says she can make $500 a day as a nurse and this business is wearing her down. She runs it alone and only goes to make deposits. Does this price seem reasonable? The place is real nice and decorated very nice.

mr belvedere · 07-17-2005, 07:29 PM

First of all, I'd probably only pay about 40-50k for that set up, tops. Most beds lose 50% or more of their value when they're installed, and I'm sure those beds are probably ETS and were cheap to begin with, so maybe $20k in beds. If the money the store was making was worth it, she'd be keeping it or hiring someone to run it for her while she worked as a nurse. I'd probably still take it for $50k depending on what her books showed. Good luck.

tnally · 07-17-2005, 07:33 PM

Thank you so much for the insight. I will find out more info and get back with you. I am so glad I found this web page before making a decision!

mr belvedere · 07-17-2005, 07:40 PM

I am too. Good luck.

sunsally · 07-17-2005, 09:31 PM

Look at the books (is she computerized) as well as their filed tax statements for the past 2 years.

Are you giving up any current income to take this on?

450 clients isn't very many if that is "everyone" not just "actives". Of course, if you are in a small town, maybe you've already got everyone that would ever even CONSIDER tanning. What is the population around you - they estimate about 10% of the population will do indoor tanning.

Listen to what she told you -- she can make more money as a nurse, and this is 'wearing her down'. I guess it depends how much you want to pay to buy something that is likely to "wear you down" and MAYBE recoup your investment after the first few years.

Good luck - keep us posted!

tnally · 07-17-2005, 10:04 PM

Thank you sunsally! You have helped put this in perspective for us and we are seeing the other side, after the first excitement wears off. The thought of me quiting my high stress job at a pharmacy (only 23,ooo a year), made this seem wonderful. But I am so glad that we can talk to people who are actually living the life, and get a more reasonable idea of what to expect. I hope to know more soon when we ask to see the books. That should tell us all we need to know. Or at least all ya'll need to know to help us make a smart decision. THANK YOU FROM THE BOTTOM OF MY HEART!!!

tnally · 07-17-2005, 10:04 PM

Thank you sunsally! You have helped put this in perspective for us and we are seeing the other side, after the first excitement wears off. The thought of me quiting my high stress job at a pharmacy (only 23,ooo a year), made this seem wonderful. But I am so glad that we can talk to people who are actually living the life, and get a more reasonable idea of what to expect. I hope to know more soon when we ask to see the books. That should tell us all we need to know. Or at least all ya'll need to know to help us make a smart decision. THANK YOU FROM THE BOTTOM OF MY HEART!!!

sunsally · 07-18-2005, 09:14 PM

Let us know. Feel free to PM me with any questions as well. In the meantime, while you're waiting for her to produce numbers, READ, READ, READ!! Go back in the archives a few months (read November posts when people are REALLY feeling the "slow season"!) to and read there, as well as current. Gather up some info for us in the meantime like:
1. Number of people in your town (or nearby enough that would drive here to tan)
2. Monthly lease amount (the rent, including any "CAM" charges)
3. Exact manufacturer, model and year of the equipment she has
4. If all the equipment is paid off, and if not, what is still owed and if she is assuming she would be paying that off or that you would be "assuming" that
5. How many sq feet, how much extra room (if any) there is to add more beds, how many amps of electric she has and how many tons of AC

That ought to keep you busy enough for now!

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07-17-2005, 07:01 PM	#1 (permalink)
tnally Join Date: Jul 17 2005 Posts: 7 Rep Power: 0	My huband and I have been asked if we want to purchase a tanning salon. It is the only salon in town and has been opened almost 2 years. They have already moved to a larger place because business was demanding more beds. We don't know where to start! The owner offered at $75,000, everything included. We know we need to look at her books to see what the business grossed since it has been open. Don't know what else we should do! Anyone have any advice?

07-17-2005, 07:08 PM	#2 (permalink)
mr belvedere Mr. b Join Date: May 10 2005 Age: 54 Posts: 7,247 Rep Power: 68	Go for it! Are you kidding?! The only salon in town, no competition. You'll killem! Unless of course they only have a few 20 minute beds, then $75k might be a little steep. I wonder what the current owner's excuse is for wanting to sell?

07-17-2005, 07:18 PM	#3 (permalink)
tnally Join Date: Jul 17 2005 Posts: 7 Rep Power: 0	There are 4 20 minute beds, 1 15 minute bed and 1 10 minute bed. She told us she has over 450 clients, but I am not sure how many are current. Is that a good amount after just being open for 2 years. We are in a small town in Tennessee, but it is growing and the people who are moving here are wealthy. She is a nurse and her husband also owns a business. She says she can make $500 a day as a nurse and this business is wearing her down. She runs it alone and only goes to make deposits. Does this price seem reasonable? The place is real nice and decorated very nice.

07-17-2005, 07:29 PM	#4 (permalink)
mr belvedere Mr. b Join Date: May 10 2005 Age: 54 Posts: 7,247 Rep Power: 68	First of all, I'd probably only pay about 40-50k for that set up, tops. Most beds lose 50% or more of their value when they're installed, and I'm sure those beds are probably ETS and were cheap to begin with, so maybe $20k in beds. If the money the store was making was worth it, she'd be keeping it or hiring someone to run it for her while she worked as a nurse. I'd probably still take it for $50k depending on what her books showed. Good luck.

07-17-2005, 07:33 PM	#5 (permalink)
tnally Join Date: Jul 17 2005 Posts: 7 Rep Power: 0	Thank you so much for the insight. I will find out more info and get back with you. I am so glad I found this web page before making a decision!

07-17-2005, 07:40 PM	#6 (permalink)
mr belvedere Mr. b Join Date: May 10 2005 Age: 54 Posts: 7,247 Rep Power: 68	I am too. Good luck.

07-17-2005, 09:31 PM	#7 (permalink)
sunsally Team TanTalk Join Date: Nov 23 2004 Location: ITA Member & Berman Supporter! Posts: 3,136 Rep Power: 25	Look at the books (is she computerized) as well as their filed tax statements for the past 2 years. Are you giving up any current income to take this on? 450 clients isn't very many if that is "everyone" not just "actives". Of course, if you are in a small town, maybe you've already got everyone that would ever even CONSIDER tanning. What is the population around you - they estimate about 10% of the population will do indoor tanning. Listen to what she told you -- she can make more money as a nurse, and this is 'wearing her down'. I guess it depends how much you want to pay to buy something that is likely to "wear you down" and MAYBE recoup your investment after the first few years. Good luck - keep us posted!

07-17-2005, 10:04 PM	#8 (permalink)
tnally Join Date: Jul 17 2005 Posts: 7 Rep Power: 0	Thank you sunsally! You have helped put this in perspective for us and we are seeing the other side, after the first excitement wears off. The thought of me quiting my high stress job at a pharmacy (only 23,ooo a year), made this seem wonderful. But I am so glad that we can talk to people who are actually living the life, and get a more reasonable idea of what to expect. I hope to know more soon when we ask to see the books. That should tell us all we need to know. Or at least all ya'll need to know to help us make a smart decision. THANK YOU FROM THE BOTTOM OF MY HEART!!!

07-17-2005, 10:04 PM	#9 (permalink)
tnally Join Date: Jul 17 2005 Posts: 7 Rep Power: 0	Thank you sunsally! You have helped put this in perspective for us and we are seeing the other side, after the first excitement wears off. The thought of me quiting my high stress job at a pharmacy (only 23,ooo a year), made this seem wonderful. But I am so glad that we can talk to people who are actually living the life, and get a more reasonable idea of what to expect. I hope to know more soon when we ask to see the books. That should tell us all we need to know. Or at least all ya'll need to know to help us make a smart decision. THANK YOU FROM THE BOTTOM OF MY HEART!!!

07-18-2005, 09:14 PM	#10 (permalink)
sunsally Team TanTalk Join Date: Nov 23 2004 Location: ITA Member & Berman Supporter! Posts: 3,136 Rep Power: 25	Let us know. Feel free to PM me with any questions as well. In the meantime, while you're waiting for her to produce numbers, READ, READ, READ!! Go back in the archives a few months (read November posts when people are REALLY feeling the "slow season"!) to and read there, as well as current. Gather up some info for us in the meantime like: 1. Number of people in your town (or nearby enough that would drive here to tan) 2. Monthly lease amount (the rent, including any "CAM" charges) 3. Exact manufacturer, model and year of the equipment she has 4. If all the equipment is paid off, and if not, what is still owed and if she is assuming she would be paying that off or that you would be "assuming" that 5. How many sq feet, how much extra room (if any) there is to add more beds, how many amps of electric she has and how many tons of AC That ought to keep you busy enough for now!

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