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Old 03-18-2012, 08:23 PM   #1 (permalink)
 
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Help me...Is this a good business decision????

Hello All,
I am in the beauty business but new to the tanning industry. I have an opportunity to purchase a existing tanning salon that has been open for 10+ years. Beautiful location, very clean, busy intersection. The following is the list of beds:
1 Ergoline 650 changed all bulbs and acrylic this week
1 Avant Garde 600 new bulbs
6 Sundash Competition 232 base beds
1 Sundash Radius 252 Stand up
4 BRAND NEW Ergoline Passion 40/3 turbo power
1 Brand new Ergoline Beauty Lounge
1 Tan Envy airbrush tan unit

The salon has 2011 expenses of 141 and revenue of $191. The payroll is very high 61K we plan on keeping 2 exisiting people and my husband and I work the business. I am an esthetician so plan on adding some spa services such as facials and waxing (have all equipment)...They are asking 160 for the business..Would love to hear some feedback
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Old 03-19-2012, 08:08 AM   #2 (permalink)
 
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Re: Need help det. to buy exsisiting salon

Maybe my title was not a good choice...I really need some EXPERT advise....is this a good investment? opinions on beds? Thank you in advance
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Old 03-19-2012, 02:51 PM   #3 (permalink)
 
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Re: Need help det. to buy exsisiting salon

The salon has 2011 expenses of 141 and revenue of $191. The payroll is very high 61K we plan on keeping 2 exisiting people and my husband and I work the business. I am an esthetician so plan on adding some spa services such as facials and waxing (have all equipment)...They are asking 160 for the business..Would love to hear some feedback

Expenses, I assume you mean 141,000 and revenue of $191,000 (??)
If that is correct, it shows a profit of 50K ???
and they are asking 160K ??? That is 3times what the place makes each year...

RUN!!!!!!

Why do you think this is a good deal? I would offer 25K, take it or leave it..

And NEVER would add any esthetician services
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Old 03-19-2012, 03:15 PM   #4 (permalink)
 
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Re: Need help det. to buy exsisiting salon

Blacksun why would you never add other services? I have to pay no one to do them and have all supplies and equipment on hand? and yes 141,000 and 191,000. I think the reason she is asking 160 is because she just put in 5 new beds totaling 65K. I was thinking more of an offer of 100k
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Old 03-19-2012, 04:47 PM   #5 (permalink)
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Re: Need help det. to buy exsisiting salon

Make sure the beds do not have any liens on them (do a UCC search on all equipment).

If the build out is nice and the beds are all yours for the sale price and the gross is verifiable; it could be a good purchase. $160k is too high IMO. 3x net is possible in some industries, but we have not seen that in the tanning biz in a while (for a good reason). If I had vetted everything and the numbers look good, I would offer $75k and maybe go up if needed.

Black sun makes a good point about other services. Tanning salons are loud at times and smell like tanning lotion all day long. Not the best place for relaxing services like facials, massages and so on. Something to think about.

I would love to break this down more, but I am just too slammed today. I might be able to chime back in as the discussion develops over the next few days.
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Last edited by House of Tan; 03-19-2012 at 04:49 PM. Reason: Flippy-Floppin letters to make real words
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Old 03-19-2012, 05:36 PM   #6 (permalink)
 
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Re: Need help det. to buy exsisiting salon

House of tan, thank you for your reply. We verified that all equipment is free and clear. Should my next step be asking for 3 years of returns to verify the info she provided and then go from there?
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Old 03-21-2012, 11:34 AM   #7 (permalink)
 
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Re: Help me...Is this a good business decision????

Quote:
Originally Posted by chloesmoma View Post
Hello All,
I am in the beauty business but new to the tanning industry. I have an opportunity to purchase a existing tanning salon that has been open for 10+ years. Beautiful location, very clean, busy intersection. The following is the list of beds:
1 Ergoline 650 changed all bulbs and acrylic this week
1 Avant Garde 600 new bulbs
6 Sundash Competition 232 base beds
1 Sundash Radius 252 Stand up
4 BRAND NEW Ergoline Passion 40/3 turbo power
1 Brand new Ergoline Beauty Lounge
1 Tan Envy airbrush tan unit

The salon has 2011 expenses of 141 and revenue of $191. The payroll is very high 61K we plan on keeping 2 existing people and my husband and I work the business. I am an esthetician so plan on adding some spa services such as facials and waxing (have all equipment)...They are asking 160 for the business..Would love to hear some feedback
I would like to send you a questionnaire that will help evaluate this salon. I would also like to talk to you and give you some direction with this purchase. Please give me a call at your convenience and I will take a look at the information you have. If you do not wish to speak with me, just send me an email and i will answer some important questions.
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