daleytan-06

Hello All! I'm not "new" to the tanning industry at all. Have worked/managed the same salon for 15 years. The time has come for the owners to sell and my husband and I are really interested in buying. Problem is we are having a hard time coming up with a fair price to pay that will still let us invest in some upgrades and moving forward with the business and not just digging ourselves out of a neverending hole of debt. To anyone who has purchased an existing salon.how much did you pay and how did you arrice at the price?(feel free to send me a private message) Our biggest hangup at this point is the equipment...The salon has 5 Klafsun Cosmos beds, a Klafsun Galaxy and 3 Hex classic booths. The salon had been in business for 25 years and has a solid clientelle. But in this economy we just fear that we are never going to be able to move forward paying the current asking price of $95,000 (not including the building or retail) and the monthly lease to stay at the very desireable location. Help please!

theislandtan

You'll need to post $$$ numbers before anyone can really tell you much. I will say the only way I'd think about buying a salon in todays market is if it one year net is at least the asking price.

I paid $21k for my salon two years ago, and had I know what I do now I would have waited for the price to come down even more or waited till the landlord locked the doors and spoke to him directly. The vast majority of these salons are not for sale because the want to, its because they have to.

jensaccord

95,000 is way to much. You can pretty much start from scratch with that. I purchased a salon back in Sept of 09 for 15,000. Depending on how old the beds are, the have probably already depreciated. You also have to take into consiseration that you are paying for client info as well, again don't know how many clients are there. 95,000 is way to much

daleytan-06

I don't know why but I'm just hesitant to post financial #s! My boss had instilled strict privacy in me and I'm new to blogging so I'm not used to the anoniminity of it all! But anyway..all of the equipment is at least 10-12 years old. There is one Klafsun Cosmos bed being isntalled now that is "new" in that it never came out of the box..but it has been in storage since about 1998. This is to replace the last of the OLD Klafsun Cosmos beds that we had that finally crapped out! There are about 14,500 clients in the database (but that's 25 worth of people who have come and gone).
They are willing to lease the building at a fair price but it's an expense that the business does not have right now b/c they own the property. So my biggest concern is adding another $2000+ in expenses. I love my job..I love my customer and my bosses as well as the salon. I just want to buy the salon at a fair price that w/o being offensive to the owners. I've heard to offer 2x the average of the last 3 years profit...has anyone heard that?

daleytan-06

What exactly did you get for the $15,000 and how long had the salon been in business?

Shane

How do you know $95K is too much? You don't!!!

The salon could be netting well over $100K which would justify the asking price. Or could be netting $30K and be nowhere near worth the asking price.

You need harcore numbers to factor the value of a salon. Without that, NO ONE will be able to accurately help you and assess a value.

daleytan-06

Well having said that..I will tell you that it GROSSES about $160k and I think last year it might have profited $22k! Not great!

theislandtan

It grossed $160K form 8 beds and only netted $22K??? I could pull a $100K net from that with very poor management from my salon with that kind of gross and I have 8 beds...


So lets dig a little. For $95,000 you are buying a job that will make you $22,000 + your current wages if you continue to work it. To make it simple, I am going to use $20,000 as your current wages.

$22,000 net + $20,000 current salary = $44,000
Out of the $44,000 you will have to:
pay off the $95,000 purchase
pay rent of $?,???
Upgrade for $??,???
Live through slow season with a savings of $??,????
Pay taxes of $?,???


How much will rent be?
How much do you want to spend on upgraded equipment?
Are you planning on making any other changes to the salon? (How much $$$?)

Why in the **** did it take $140,000 to run an eight bed salon for a year??? Did the owner pull a $50,000 salary? If so then you are looking at close to $94,000 net after you purchase it.

If that salon is really doing $160,000 gross I don't know if I would change anything its currently doing. I really can't see it costing more that $60,000 to run an eight bed salon so before taxes you'd be left with $100,000. The beds might be older, but customers are using the **** out of them.

I'd have a hard time paying $95,000 for any salon, but if its putting $75,000 back in my pocket each year I'd take a real hard look at it....