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Old 03-30-2012, 08:24 PM   #1 (permalink)
 
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Cool What would you pay for this salon?

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.
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Old 03-31-2012, 12:08 PM   #2 (permalink)
 
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Re: What would you pay for this salon?

Pretty sure we need more info
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Old 03-31-2012, 02:34 PM   #3 (permalink)
 
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Re: What would you pay for this salon?

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Pretty sure we need more info
Such as? I did fail to list the number of beds, which is 7 plus the stand up and spray tan . The salon is 1500 square ft. with a rent of $1700 per month, electric runs $300-600 per month, they have two main employees in addition to the owner. I haven't gotten a P/L statement yet so I don't know all the expenses but this looks like a good place to buy. Just wondering what you guys would pay if it were you?
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Old 03-31-2012, 05:31 PM   #4 (permalink)
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Re: What would you pay for this salon?

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Originally Posted by magicvent View Post
Such as? I did fail to list the number of beds, which is 7 plus the stand up and spray tan. The salon is 1500 square ft. with a rent of $1700 per month, electric runs $300-600 per month, they have two main employees in addition to the owner. I haven't gotten a P/L statement yet so I don't know all the expenses but this looks like a good place to buy. Just wondering what you guys would pay if it were you?
$300-$600 a month? My house runs $300-$600 a month for electric. That figure is real low for a tanning salon. Get the tax returns amd the electric bills for the last three years and judge from there.
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Old 04-01-2012, 09:31 AM   #5 (permalink)
 
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Re: What would you pay for this salon?

Totally agree with brian...too low electric for 7beds (my home with AC this month alone:$362)..then again, with Troical Rayz beds I could understand why.

I doubt very seriously the salon is profitable. In fact, based on what you posted, it is not...wait for the place to 'fold', take over space...invest in 5 good/pre-owned beds to start and go from there...

OR..offer her 15k, take over lease..

The#'s matt posted is proof that the place is a losing proposition as is..
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Old 04-01-2012, 10:28 AM   #6 (permalink)
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Re: What would you pay for this salon?

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The owner wants to focus on other business interests....
Translation:

The place is bombing and I want to get something for it before it shows evidence of financial loss and I am stuck either waiting it out and defaulting on my lease and the landlord getting everything or just getting a dumpster and throwing it all away now.

Other statements with the same translation are:

My husband has been transfered and we are moving.

We are having family issues right now.

My mom has cancer and needs an operation.

My dog has rabies and we need to sell to pay for the revolutionary procedure.

People that have successful businesses don't sell or close them to fund new ventures. They keep it to maintain so they can afford to fund a new venture and eventually grow bigger.
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Old 04-01-2012, 02:25 PM   #7 (permalink)
 
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Re: What would you pay for this salon?

Thanks for the advice, guys! Brian, I'm worried about you if your house is costing $300-600 for electric every month. That means you aren't living in a sustainable fashion, and conserving energy like Al Gore wants us too. Shame on you! lol....
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Old 04-01-2012, 06:02 PM   #8 (permalink)
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Re: What would you pay for this salon?

I'm an electrician. I burn watts like it's going out of style.
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Old 04-01-2012, 09:15 PM   #9 (permalink)
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Re: What would you pay for this salon?

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Thanks for the advice, guys! Brian, I'm worried about you if your house is costing $300-600 for electric every month. That means you aren't living in a sustainable fashion, and conserving energy like Al Gore wants us too. Shame on you! lol....
It takes a lot of electric to run all those grow lamps. I'm surprised the pot authority drug inforcement team hasn't come a callin'. LOL
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Old 04-02-2012, 10:27 AM   #10 (permalink)
 
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It takes a lot of electric to run all those grow lamps. I'm surprised the pot authority drug inforcement team hasn't come a callin'. LOL
I was waiting for that comment! LOL!
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