THE_KINGDOM

So there has recently been an opportunity to take over a salon, it would be my first salon.

I haven't yet seen the books but I will be able to see them shortly.

They were saying that if I offer $50,000 or more it's basically mine, but after doing some reading I've read this is a lot to pay for a salon. I wouldn't pay more than $40,000, as it stands right now.. but I wanted some more experienced people within the industry to chime in and give me some friendly advice as to what sounds reasonable for a salon with this setup.

The salon has the following beds:
- UWE Ibed
- UWE Silverbullet
- UWE Cobra
- Beauty Angel (Red light therapy)
- Mystic Tan HD

- The rent for the space is between $3000-4000 a month I believe.
- The Salon has space for 2 more beds, in roomed off sections that are unused.
- Some things in the salon should be repainted, and fixed up. I'd prob want to change all the doors to the tanning rooms to make it look nicer, although it's a big investment and I believe the landlord/building owner should be participating in the unit renovations.
- I think the Salon has been around for around 2 years, but I will be able to confirm this shortly
- Computer system running Helios 12 Enterprise (is this a subscription software or paid off?)
- T-max Manager G2

The reasons they're selling the salon are not quite clear, but one of the owners is no longer living here, and the other partial owner/manager was really just managing the salon and just had a child etc, no more time to manage the salon.
Marketing for the Salon was never done properly so I believe there is more potential to make the salon a lot more busy with adequate marketing and better pricing etc

peach

I would approach it as though I was starting a new store; check out the demographics and decide whether the area can handle the number of salons that already exist. Then investigate your total fixed costs to run the store. (rent, lights, phone garbage, etc.) Check the employees situation-do they have any, what is there pay, will they be willing to stay. if you are confortable after all that, look at the equipment-what is it selling for on ebay and other sites?-Without a spray booth, I wouldn't give $20k for the equipment. Do not pay for the buildout, if he moves, he will leave it anyway. Sell the red light bed-it is overpriced and wouldn't be worth what he would want for it. You need some basic beds and a spray booth to go with what he already has.

THE_KINGDOM

So sorry I completely forgot to mention that there is a Mystic HD unit here also, which I gather is one of the better of the Mystic booths.

Thanks so much for your reply.

I was thinking to sell the red light bed, or have them sell it before selling me the salon? to lower the price?

What do you mean more basic beds? I was thinking about buying the UWE P90 which is a top of the line bed, better than the iBed.. to add to the salon?

peach

Something in the 32 bulb 100 watt category-maybe 2 of them to catch your entry level tanners.

THE_KINGDOM

Ok i see what you mean, I'm going to keep the Cobra pretty occupied, maybe I'll try and add another cobra, thats certainly an entry level bed.

With the Mystic HD unit also, do you think $40,000 is too expensive for the salon? Actually they are asking $50,000

Robert K

The equipment alone is worth 40K but it does not mean the business is. You need to determine the value of the business based on the numbers. How much is the salon grossing? What is the net? Is there room to grow the business in that market?

__________________
Robert Klem
Superior UV Technologies
(888) 526-7712 x77
robertk@superioruv.com

THE_KINGDOM

Thanks for the reply. I will be updating the original post with those stats this week as soon as I have a meeting with the owners.
Again, one problem is that they say there is a lot of income "off the books" but I will only show here what is actually documented and claimed.

HOT STUFF

If it is not on the books, it does not exist.

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THE_KINGDOM

Exactly, and I will certainly abide by this rule.

I'm just thinking that $40,000-$50,000 is quite a lot for a salon with this equipment? Even though I haven't seen the figures yet

Robert K

40-50K may be a bargain for a salon with that equipment if it is making money.......

__________________
Robert Klem
Superior UV Technologies
(888) 526-7712 x77
robertk@superioruv.com