AceShopper

As I read more posts on this forum, everyone agrees that the tanning industry is on a downward trend.

I have been looking over the financials of a few tanning salons that are on sale in our neighborhood areas. Most of them show a steady decrease in revenue and a serious decline in year-over-year numbers. Some owners are just looking for a way out and after reviewing their financial reports, I do not blame them.

Sure - this leads to fire-sale prices and great "deals" for people looking to buy them. However, the fixed costs are not going to change and your revenue is going to continue to dry up ... So, for someone who has not been in this industry before and is thinking of buying these salons, does it make sense to even attempt to jump in at this time ?

I am new to this forum, so just looking for your thoughts - no offense meant to anyone.

JimmyAK

The concept of taking over a struggling business and changing the business model and succeeding is not uncommon. However, there are several factors that need to be considered, which you have been reading about here.
What do the potential clients think about the existing salon? Likes/dislikes? Equipment? Competition? If another salon in town is dominating the area, find out what they do right. I truly believe that not every market in every corner of the world can support a tanning salon. Based on demographics, and financial factors.
Expect to spend lots of money at least in the first year on upgrading the services and promoting the **** out of what you're doing, or expect a new owner doing the same old same old and failing.

delany

Check to see the level of competition in your area. I closed my salon and in 3 months 2 of my 4 major comps closed (the 2 non local chains). Had I known they were closing, I might have made another year go of it. But as it was, my market was too saturated to support all of us. (and this is after about 5 or so other salons had closed in the last 2 years)

AceShopper

That is probably what will end up happening - All the over-saturated areas might see many salons close shop and the ones who are able to weather through will get all the customers ?

Yupp - I think a new salon owner has to determine what can they do differently than the old owner to turn the business around. Buying at a fire-sale price and then doing nothing new is going to have the same result in the end ...

delany

That is exactly what is happening now. The market was over saturated with people that took money out of their homes at the peak of the market, thought it would be fun and easy to open a salon/created a hobby for their bored wives. Those places are now closing.