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08-09-2011, 09:24 PM | #1 (permalink) |
Join Date: Aug 9 2011
Posts: 3
Rep Power: 0 | My friend is selling his salon Hi there, My friend is selling his local tanning salon and I've had a bit of interest in purchasing it. I would like to see what other people in the forum think of the idea and if you have any feedback I would appreciate it. Asking price $38,888 2000 Sq/ft @ $14/ft 4 tanning beds ( 3 regular and 1 super ) 2 stand-ups Spray tanning room with equipment Computer with T-Max system installed Gross annual sales (not including $700 a month for 1 sublet) 2005 - Total sales $75,503 2006 - Total sales $85,570 2007 - Total sales $82,023 2008 - Total sales $83,239 2009 - Total sales $64,800 2010 - Total sales $54,478 The salon has 4 employees that all work for minimum wage and their commisions of sales. As far as I can see, I believe his business is breaking even and he's clearly past his prime for what he figured he could accomplish. The only value I really see here is in the clientelle & the equipment. All the equipment is aged(3-4yrs) but was well maintained and is in good working order. Estetically the business looks good which is one relief. It has been operated as a sole propriotorship since opening and needs to be incorporated. The salon is in a very good part of the city. Their is a hair salon 1.5 Km's away that offers minimal tanning and then the next salons are near the malls roughly 3 km's. If I was going to purchase this business I would be willing to offer a very low amount just to take on the existing contracts and the location. As the busy season approachs I believe it would take a **** of alot of advertising to get these numbers back up. Fortunately I do have about 75-100 friends that tan I can send personal messages to through social networking and let them know of my new venture. I do know this is a minimal amount, it is just a start as they are locals to the area. I don't personally know how viable this business can be at the moment so I plan on doing a little more research ino equipment, advertising, and price adjustment. Essentially the reason for this post was to feel out your experience and see what sort of ideas the online community of owners has. All the best |
08-10-2011, 05:46 AM | #2 (permalink) |
Team TanTalk Join Date: Aug 27 2002 Location: East Coast Age: 56
Posts: 2,888
Rep Power: 22 | Re: My friend is selling his salon Breaking even???? Income 2011 $4,000 per month Expenses per month $2,333 Rent $2,600 Payroll (Only 60 hours per week) CC fees COGS Ins Utilities etc They are in the hole for at least 20K per year |
08-10-2011, 08:46 AM | #3 (permalink) |
Team TanTalk Join Date: Nov 23 2004 Location: ITA Member & Berman Supporter!
Posts: 3,136
Rep Power: 25 | Re: My friend is selling his salon Robert is correct! My numbers: Rent - 28K/yr Payroll - 36K/yr (even if you work it, have to figure in minimum wage for yourself or what is the point of buying it to work for free??) Utilities - 6-10K/yr (depending on A/C, etc) Supplies - 1K Phone - 1K Inventory - 3-6K Maintenance (re-lamping) - 2-5K Insurance - 1-2K Bank Fees (credit card, etc) - 2K Advertising ---- Total - $80-90K/expenses per year --- BEFORE you factor in what you would PAY to buy the place. Salon has basically NEVER broken even - and right now is on a CLEAR downward trend. I wouldn't take this salon FOR FREE - you will wind up losing money. Period. |
08-10-2011, 08:46 AM | #4 (permalink) |
Join Date: Apr 25 2010 Location: Simi Valley, CA
Posts: 143
Rep Power: 14 | Re: My friend is selling his salon Ask for a profit and loss statement. Then offer 1.5x net profit for the year which is pretty standard. Chances are he should be paying you to take over the salon. Walk away from this one.
__________________ Alex Chuang Owner Coco Beach Tanning |
08-10-2011, 02:28 PM | #6 (permalink) | |
Join Date: Aug 9 2011
Posts: 3
Rep Power: 0 | Re: My friend is selling his salon Quote:
& Kookyguy, thanks for making sarcasm so much easier to read over the internet. Those types of names on beds are a gimmick, even I know and i've never owned or lost my shirt owning a salon;) | |
08-10-2011, 04:20 PM | #9 (permalink) |
Join Date: Aug 9 2011
Posts: 3
Rep Power: 0 | Re: My friend is selling his salon After thinking about it a lot last night and a today, I believe I will take a pass on this opportunity. If the numbers didn't drop so dramatically I would have stayed positive and put some serious thought into bringing in more numbers. But, I have a gut feeling their must be something seriously wrong with the existing salon or a new one is attracting all of the local business. Taking the clientele in this particular deal would be the only feasible option for anyone. I myself, am going to pass. I appreciate all the feedback. I hope it starts raining and everyone gets some business soon. :P |
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