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07-26-2011, 01:40 PM | #21 (permalink) | |
Team TanTalk Join Date: Nov 23 2004 Location: ITA Member & Berman Supporter!
Posts: 3,136
Rep Power: 25 | Re: Buying my first Salon Quote:
In fairness.......... This thread started with one person asking "is this a good deal". Now, interestingly, we have "the other side of the story" - the salon owner/seller themselves has come on giving their perspective. I have traded some emails with the owner, and I have no reason to believe it is NOT as she suggested. Specifically: 1. They have owned it 6 years 2. It has been a good business for them 3. They now have made a personal decision that they would like to move, out of state, and are in the position to retire 4. She, like many owner/operators, wants to leave her clients in "good hands" - and so is looking to sell it to someone who will treat them as she has over the years. From her perspective - she it taking 40-50K out of it a year - it is a GOOD "job". And that makes sense --- when an owner/operator WORKS the store, the number we put in for "Payroll" can go to them instead. She may not be advertising as we suggested a new owner might, maybe she doesn't feel a need for the internet and/or software/cameras to be able to monitor her business from off-site --- because she is working it. That fits a LOT of salon owners in this country! Now - it still goes back to the "investment" question. Is this a good "investment"? Well - if you want to buy a job - sure. If you have run the numbers and are CONVINCED you can increase sales with some ideas you have in mind - sure again. If you are comparing it against the cost of starting a salon from the ground up right down the street - yes again. From the standpoint of "Should I quit a current job (or plan to be an absentee owner) and take 55K of my money that is burning a hole in my pocket and put it into this expecting an immediate return"? No. | |
07-26-2011, 01:52 PM | #22 (permalink) |
Team TanTalk Join Date: Nov 23 2004 Location: ITA Member & Berman Supporter!
Posts: 3,136
Rep Power: 25 | Re: Buying my first Salon This is a pickle a lot of salon owners find themselves in today. They have put a lot of money, time and sweat into building a business. Maybe it USED to make money. Maybe you finally got loans/leases paid off and you got to the point where it SHOULD start making money. Then the economy tanked. So they keep looking forward, to when they SHOULD start making money. When the salon SHOULD start profiting. When business SHOULD get back to what it used to be. Or what they thought/hoped it would be. It is a tough question. When do you "cut bait"? How long do you "hang on"? How much more money do you feed, hoping it will work out? When is "optimism" just plain "bad business decision-making"? And if you DO "cut bait" - and decide to sell --- how do you price it? How do you put a price on the investment in time and money you put into the buildout (even though the landlord "owns this")? How do you put a price on the equipment given the price YOU paid for it - which is probably a lot less than somebody could pick it up for used today How do you put a price on the hours you or friends or family members spent working the counter, for "free", trying to save payroll and keep the doors open? How do you put a price on the "potential" that you really FEEL is there.....even though maybe it has never yet lived up to those feelings and hopes The real "fair price" for any business is ALWAYS the same - whatever the buyer and seller can agree on!! If someone is asking $1M and someone will pay $1M -- it really doesn't matter if someone else thinks it is only worth $500K (unless you need to borrow money based on the business valuation). As a SELLER - I'm trying to get you to "put yourself in my shoes". Share my passion for what I built, be willing to pay me for what I created. As a BUYER - I'm looking at hard core numbers and comparing it with my other options and deciding what I'm willing to risk based on what I think I can do differently to improve those numbers. And therein lies the negotiation :-) |
07-26-2011, 04:36 PM | #23 (permalink) |
"The Man" Join Date: Mar 4 2003 Location: ohio
Posts: 4,015
Rep Power: 23 | Re: Buying my first Salon Ok.......... Just my 2 cents here. No reflection on any above posters. 23 years ago I atarted with 3 units and made money, That was a long time ago. In todays market and economy, I do not see how any one can MAKE money with less than 10 units. I closed both of my 10 unit stores. They made money, But only for the people I was paying. But of course there are different markets. I think anyone getting into this biz now should go with atleast 10 or more units. Every will tell you fewer level 1 beds and more big boys. Well in this economy I see people down grading evvery day, Or down sizing their buys. Yes you need good upgrades, But atleast have at least 4 or 5 level ones to get thru the current slump. If your doing a new build out, Do not skimp on rooms you put base beds in. Build the rooms so that late on you can upgrade if you want. Bob |
07-26-2011, 04:44 PM | #24 (permalink) |
"The Man" Join Date: Mar 4 2003 Location: ohio
Posts: 4,015
Rep Power: 23 | Re: Buying my first Salon Location loction location, Every one screams it. Again I disagree. My oldest store is around back, under a strip mall. For 15 years I was not even allowed a sign of any type. Why was this a good location ? In 2011 I'm paying 2k for 5k sq ft. I know of people paying 7500 for half the space because they had to have that location. Run a great and clean salon and they will find you. It may not happen over night, But with word of mouth and the right advertizing they will find you. Bob |
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