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Old 04-01-2013, 05:34 PM   #1 (permalink)
 
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Possibly purchasing a new tanning salon in Canada

I am currently looking at purchasing a tanning business in Canada. It is a very cold climate here from sept straight on through until April/May. The location is OK. It's got potential. Close proximity to downtown, close to nightclubs and venues, it's slowly turning itself into a trendy little spot for day and evening business'.

The owner has been running it for 3 years. She grossed $181,000 at the end of 2012. She has 3 lay down beds, 2 Stand Ups (Heartland series, but do not know the models yet) and an Acclaim High powered bed as well as spray tanning .

The rent of the building is cheap for the space 2500/sq ft for $1666 a month. Roughly her bills are adding up to be about 500 a month. They told me less but I'm not buying it. I am responsible for any maintenance and repairs that happen within the space.

She has four rooms rented out at the moment. A massage therapist, two estheticians, and anti-cellulite technician(they all room rent). This space has A LOT of potential, but I am an esthetician and am looking at it more from a salon perspective than I am a tanning one. Tanning seems to becoming less popular (in my opinion, due to media)? I'm not really buying the story of why she wants out. If your business is profitable - you aren't going to leave it. Perhaps she's just making minimum wage and scraping by? I don't know. But my thoughts were to take it and continue with the tanning and continue on with spa upgrades and room rentals for other technicians and a space for myself to work as well. This way I can keep my payroll and other expenses down and still do what I love to do.

Any thoughts...

Also when I got the itemized list for equipment she stating that there is over 105,000 in assets. But I don't know why I should be paying top dollar for used beds? The three heartland laydowns were combined were for sale at 20 000 2 heartland standups at 30 000 and the acclaim high powered for 30 000? Thoughts on that as well. Any info would be great.

Last edited by beccasteps; 04-01-2013 at 05:57 PM. Reason: calculation error
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Old 04-01-2013, 06:00 PM   #2 (permalink)
 
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Re: Possibly purchasing a new tanning salon in Canada

Also I realize there are some market differences price wise between Canada and the States - when it comes to leases and utilities. I believe our utilities are substantially lower, but I would assume the beds and those prices would be fairly on par??
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Old 04-02-2013, 04:20 AM   #3 (permalink)
 
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Re: Possibly purchasing a new tanning salon in Canada

Grossed $181,000 with 3 laydowns and 2 standups????

Find that very hard to believe. I would ask her to 'show me the money'...tax records for all years in business.

If the 'bills' are adding up to $500 a month, THIS IS A FAILING BUSINESS.

My home utilities are more than that. This tells me, beds are not getting used much.

If, for such a small salon, she did gross as much, why sell?

Heartland beds are good, but those are probably older models, worth little. The Acclaim, I believe, is no longer made. They stopped producing it within a year of its debut..had problems...certainly not worth 30K, more like 3K.

What is the asking price? I would offer 15K, or walk..and tell her that.



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