What would you pay for this salon? - Page 2 - tanTALK

Steve Underhill · 04-03-2012, 11:10 AM

Quote:

Originally Posted by magicvent

Hey Guys-Thanks for all the great info and advice you've all left over the years. I have read many posts and learned a lot which I did not know. I am seriously considering purchasing an existing salon, and here are the details. The shop has been at it's present location for about 6 years, both times I went in to meet the owner it has been busy. It's clean and well laid out, the colors of the paint are bright and it's also a gift shop with purses, candles, etc. so I think that is a plus. The location is not so great, you can't see it from the road but the locals know it's there and they have won awards for being the best in the area by the readers of a local paper. According to the owner and the financials, they have grossed about $115K each year for the past three years, they have a decent computer system, standup, and spray tan. The only negatives I've noticed so far are the beds are Tropical Rayz, which I have gathered from reading posts are not highly regarded in the industry. It does seem to be making a profit and with some tweaking could do better. A competitor opened up down the road and that may be hurting business right now. The owner wants to focus on other business interests and I believe is a bit burned out on the tanning industry, and is asking $50K for the shop? I was thinking since I will have to buy new and better beds sooner than later, I would offer her $35K. What do you guys think? Thanks in advance for all the info and advice for a total newbie.

What you offer for this business should not be a random number. You must evaluate the worth of the business based on net profit, inventory and equipment. If it is not showing a profit, the value will be based on equipment and inventory alone.

You must also determine exactly why the business is on the decline and what must be done to make the salon successful. There is also a cost associated with these changes and that cost becomes part of the overall investment.

I suggest you approaching it as though you are starting new. Demographics, business model, lease, marketing and so on. With all of this you can determine what the business is actually worth. Pay no more than the actual worth and in most cases you can pay a little less.

reggiewjr1 · 05-04-2012, 03:29 PM

Quote:

Originally Posted by MATT A

The beds are worthless. The editor of the newspaper that gave them the readers choice award needs his head examined.

Rent 20,400
Electric 600 x12 7,200 if it is actually 600 per month
Paryroll 50,000 having it staff daily taxes etc. (don't reply you will work all the hours)
Lamps 10,000
Maintence 5,000
Phone,gas 350.00x12 4,200 average
lotion 14,000
Misc, Supplies cleaning, attorney fee's, credit card fee's, 1,200x12 14,400
Insurance 3,500
Marketing 10,000

Ballpark off the top of my head expenses 138,700 which have not included you setting up your corporation relamping upon buying marketing it or other expenses asscoiated with you taking it over. The place is not worth 3,500 let alone 35k.

This is gold for anyone writing a 'Cash Flow Projection'... +1 Matt A.

rsantini · 06-05-2012, 09:21 PM

Hello everyone,
I am new to this site and in need of some help. I am thinking of buying the tanning salon I've been going to for years. It was profitable at one time but hasn't been with the last two owners. There are 5 beds and spray tanning , two 20 min beds, 18 min bed, 12 min bed, and a stand up. The beds are outdated around 12-15 years old, and the bulbs will need to be changed soon. The salon is 1200 sf and the rent is $895 a month, The hair stylist pays $450 a month to rent a room. The electric bill runs 275-400. Insurance, Health dep, and city run about 1,400 per year. The salon was closed for 7 months before this owner took over 2 years ago. The only advertising the owner has done was sending out post cards to the former client base and an ad at the local pizza shop. After expenses to run the place ,she is only taking in 7,000 a year, wich is real bad! She is asking 8,500 but, I'm thinking it couldn't be worth more than 4,000 if that. The salon is in a good high traffic area right on a main road next door to a very busy nail salon. I think it has potential, Obviously, I plan to do equipment updates and add some extra services. what do think this salon could really be worth? I would really appreciate some imput :)

Black Sun · 06-06-2012, 04:55 AM

First off...you need to start a new thread and not steal someone elses...also, have you not read all above and more..??

That being said, if you were to give them $4,000 (what you believe it is worth, and frankly, I believe it is worth ZERO), what would you be buying?????

The beds would be need to be replaced ( for 5 beds assume 30-40K spent on replacing w/pre-owned)...even re-lamped expect avg $1,000 a bed...also, at $275 month for electric...REALLY???

There IS a reason the last 2 owners were not successful with this place...what makes you think you could do better??

It would take about 50-70K to turn this place around, based on what you are giving..expect AC/Electric upgrades/pre-owned equip upgrades/supplies/inventory/ 6-9month reserve to carry buisness over..

MOVE-ON>>>This place is a dead dog.

If the location is good, wait till they close..and they will...take over site, work out good rent w/landlord

06-06-2012, 04:55 AM	#14 (permalink)
Black Sun Join Date: Nov 19 2010 Location: GA Posts: 933 Rep Power: 14	Re: What would you pay for this salon? First off...you need to start a new thread and not steal someone elses...also, have you not read all above and more..?? That being said, if you were to give them $4,000 (what you believe it is worth, and frankly, I believe it is worth ZERO), what would you be buying????? The beds would be need to be replaced ( for 5 beds assume 30-40K spent on replacing w/pre-owned)...even re-lamped expect avg $1,000 a bed...also, at $275 month for electric...REALLY??? There IS a reason the last 2 owners were not successful with this place...what makes you think you could do better?? It would take about 50-70K to turn this place around, based on what you are giving..expect AC/Electric upgrades/pre-owned equip upgrades/supplies/inventory/ 6-9month reserve to carry buisness over.. MOVE-ON>>>This place is a dead dog. If the location is good, wait till they close..and they will...take over site, work out good rent w/landlord

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