Steve Underhill

Yes I have been busy. Working with my existing clients to make sure they stay aggressive during these times and getting a few new salons open. Now that Heartland purchased Tan/America I have been enlisted to speak at Heartlands seminars, so I have been doing a lot of traveling. Heartland is a great company and the marriage to Tan America has been great for me.

__________________
Stephen Underhill
Consultant
steve@smuconsulting.com

lyndie

Ok guys. Got some specs on this little salon. 8 beds. 6 20 min beds, 1 10 min bed, 1 high pressure bed. Airbrush tanning system. About $10k in inventory. Up to 172 people a day tanning as of Saturday. The salon could be updated a little as far as just paint, flooring, reorganizing. Nothing big at all. What do you guys think?

sunsally

You really can't evaluate anything without at least knowing the gross sales as well as a few key expenses -- rent, utilities. You can get your own estimates for the rest.

That said -

6 "20 min beds", 1 "10 min bed" and 1 HP doesnt' tell you much. Brands? Years? Hours? Condition? In general -- from an "asset purchase" - on the face of what you have told us, doesn't sound like much.

However - 100/day in slow, 172/day in busy -- these are numbers you COULD be making money from - if it is priced and structured properly!


Think of it this way -- if rent is $2K/month ($24K/year), payroll should be estimated at probably $50K/year minimum (you aren't working 1/shift if you are seeing 172/day in an 8 bed salon!), utilities and other will EASILY be another 25K/year -- so the EXPENSES of the salon -- depending on rent - are at LEAST $100K/year. And that is with no money in advertising (should be 5-10% of gross sales), no lamp replacement (probably $5-10K/yr), no product cost (30% of gross product sales),.....

So if it is GROSSING 120K/yr - you are paying $85K to break even, which means you never recoup your investment.

If it is grossing 200K/yr - you will nearly pay back your investment in the first year, which would be a good thing!


Also - if you WANT to upgrade the equip -- need to know if the room sizes are big enough, how much electric is available and the HVAC. So measure the rooms, find out how many amps of power (and three phase or single) and how many tons of HVAC.


Could be something to consider - but definitely keep gathering information!

lyndie

Ok, the beds are 8 years old, Ovation, bulbs just changed. They are in great condition. The rooms are pretty big, plenty of room for the bed a chair a table and a fan. Thats whats in there now.

There is room to put in another tanning room as well, that could be made bigger to accommodate a bigger bed.

All of your estimates on the rent and things are pretty much spot on.

All the costs were in the papers, and the net income is very very good.

But I will of course ask for audited financials as we get further in. My next step is to write a business plan.

I am excited, but trying to keep my excitement in check. You never know what could happen or what will come up once I get a lawyer on this to completely check it all out.

sunsally

Ovation beds are solid Level 1 beds - nothing flashy but they do the job and I'm sure will keep running without issue (or anything major) for years to come.

What is the "10 min bed" and the HP?

Ovations came in a 10, 15 & 20 min version. Converting those 20 min beds into 15 min would be the first thing I would do - HUGE difference on the number of people you can see! 3 15 min beds see the same number clients in a day (approx) as 4 20 min beds. I'd convert to 15 mins and probably sell off 1-2 right away to make room for upgrade equipment.

Then use those 1-2 rooms, plus build the new room, to add 3 upgrade units.

Same rent, same payroll, same advertising, almost the same utilities & insurance -- but more revenue generated!

lyndie

How do you convert the beds? Bulbs?

Robert K

Yes different lamps

__________________
Robert Klem
Superior UV Technologies
(888) 526-7712 x77
robertk@superioruv.com

lyndie

So is that a big complicated, expensive undertaking?

sunsally

Generally no.

But depending on what state you are in, and your regulations, you may need to go through a few more hoops or not.

Cost wise, the lamps are generally not any more or less expensive. So you are talking about a timer chip (a few bucks) and new stickers. About the most minimal expense you can make in a salon for the most maximum impact -- when you can do it per your equipment and state regs.