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02-23-2008, 12:09 PM | #1 (permalink) |
I'm Banned Join Date: Feb 23 2008 Location: Slippery Rock, PA
Posts: 139
Rep Power: 0 | Opinions? I came across this site while doing some research. I'd love to get some input. My wife and I had always wanted to open up a tanning salon. We came across an oppertunity to purchase an existing one for about $50,000. My wife is the one who would really be the owner in terms of the public. I'd help out in the salon too, but really I would run all of the business portion. The salon is so so on the outside, could use some upgrades to make it look more professional. Main issue to me is a nice sign. Interior looks fine, some minor changes. It has all of the basics any salon would have -washer/dryer, pos system, all the decor, seating in a 2000 square foot bottom floor building which means there is room for more of something too. It has 5 ProSun Lumina A beds and 1 Solaris Superbed. They also do massage which is by appointment only, with a 60/40 split on fees (This is a very small part of business). The things that really attracted me is the location which is basically right on campus of a 9000 student university, very low rent. There is a beauty salon that also offers tanning on the same block, but tanning is not their focus and saw much more traffic into my possible salon. My potential salon is the only tanning business allowed to solict directly on campus. My concerns are the timing, the expenses, and being handed a company with clients already under contract which I will not be paid (for now). I am going to get all the financial data for the last 2 years to review shortly. Last edited by caribbean tan man; 02-23-2008 at 12:12 PM. Reason: giving me a headache!~ |
02-23-2008, 12:15 PM | #2 (permalink) |
DERFTALK FBI AGENT Join Date: Jul 29 2003 Location: northeast Age: 48
Posts: 3,632
Rep Power: 46 | Re: Opinions? the timing is great, season is just about to start 4 most of us. buying a company with clients is a good thing! the amount of outstanding visits should be deducted from the selling price if its not already
__________________ someone PM me when a good tanning topic is posted. :lol: |
02-23-2008, 12:39 PM | #3 (permalink) |
Join Date: May 20 2003
Posts: 9,301
Rep Power: 29 | Re: Opinions? "My concerns are the timing, the expenses, and being handed a company with clients already under contract which I will not be paid (for now). I am going to get all the financial data for the last 2 years to review shortly." That's normal to think that but if you were to start from fresh you'd have ZERO clients and you'll be spending THOUSANDS in advertisments, and give aways that will cost you an arm and a leg. These people are worth it. Use them to practice selling tanning lotion to them |
02-23-2008, 12:50 PM | #4 (permalink) |
I'm Banned Join Date: Feb 23 2008 Location: Slippery Rock, PA
Posts: 139
Rep Power: 0 | Re: Opinions? Thanks, any thoughts on the beds too? It has 5 ProSun Lumina A beds and 1 Solaris Superbed. I do not have the hours in front of me, but all of the ProSun are from 2005 and the Solaris was purchased used but is also 2006. I'd like to also add a stand up unit. From my personal use, I always liked having a standup available to use after so many bed sessions. |
02-23-2008, 01:12 PM | #6 (permalink) |
Join Date: May 20 2003
Posts: 9,301
Rep Power: 29 | Re: Opinions? Those beds are pretty good. Solid. For a stand up look for a sundazzler. They are rock solid and never break and I've never heard of a lemon among then AND they can be found rather cheap. Couple thousand for a used one and they will outtan everything and everyone. |
02-23-2008, 01:12 PM | #7 (permalink) |
I'm Banned Join Date: Feb 23 2008 Location: Slippery Rock, PA
Posts: 139
Rep Power: 0 | Re: Opinions? It's being sold because the owner has moved out of town and has been running from a distance. He makes a weekly visit and is very active in the college (and will continue) but relies on his manager to run it. He has a full time job since and does not want to deal with the business anymore and would rather use the cash for a house. He's going to finance $25,000 at almost no interest. I think he basically graduated college saw the oppertunity to open a tanning salon because of all his contacts (which will be available to me). He made a good business out of it but most people can't live on $15-25k a year so he is moving on. This is a 2nd income for me, my wife is going to run it mostly (I'll handle the books) to supplement my income so I don't care if we make $10k or $50k (ok I care but it's not life or death) The net for the owner the last 2 years has been about $15k/year and he's paid the manager about $17k /year. The manager is graduating college so she is leaving in may. I am meeting Tuesday to get all of the financials and review the details. Rent is $600 and the landlord is open to any length lease. |
02-24-2008, 07:04 AM | #10 (permalink) |
Team TanTalk Join Date: Nov 23 2004 Location: ITA Member & Berman Supporter!
Posts: 3,136
Rep Power: 25 | Re: Opinions? Prayroll for a typical salon (open 12 hours a day, about $7/hour, with payroll taxes etc) is about 30K. Is he paying the manager 17K, PLUS paying other employees another 13K or so PLUS netting 15K or so? If so - the 50K represents over 3x yearly profit - which is high. It appears he is trying to recoup his investment in the beds and buildout as well. If not - if there are no other payroll expenses listed -- you are investing 50K in something that just breaks even - makes no $0. Don't consider time your wife works there - for free - as money going toward paying back your investment. AFTER she (or someone) makes a "fair wage" for payroll - can it make money. You can not pay her - for cash flow reasons -- but her working for free so it can show a "profit" isn't an investment. Get more information on the expenses and consider negotiating down the price - assuming it IS making money after you look at expenses. |
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