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Old 02-11-2004, 11:25 AM   #1 (permalink)
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I am helping my mother figure out what to sell her salon for. She is ready to retire and wants to sell it "as is". I don't want to take it over because it is too far away from my own salon and I already have two other companies that I run.

Any ideas on how we put a price on this? Currently I am going by the past 3 three years financials and what her equipment is worth. What else do I take into account?

Any ideas would be appreciated. Thanks, T.
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Old 02-14-2004, 10:54 PM   #2 (permalink)
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i am opening a salon in fl and am interested in buying equip. & possibly the contents of the salon if you are not able to sell there locally. send me an email w/info- mooresuntanning@aol.com
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Old 02-16-2004, 09:32 AM   #3 (permalink)
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Why don't you get a business broker to value it for you. Even it cost a professional services fee, it might be well worth it. Typically you would market it so that the new owners could recover their investment in 3-5 years. That might be a starting point for you.

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Old 02-16-2004, 11:07 AM   #4 (permalink)
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Most listing broker have no clue of the tanning industry.
I have been told many different ways to determine the selling price of salons.
here is info from tantoday. It could be helpful.
Quote:Guide to selling a salon.
The key here is to understand what you have to sell, and what the buyer wants to buy. Essentially, the buyer is buying:
First: the customer base, repeat tanners and the income they can reasonably be expected to produce NEXT year. Customer acquisition and confidence costs money, you have invested that money in the past, the new buyer will automatically have a customer base in place that he can count on to market products to. I would value my customer base at $10 per tanner who has tanned with me in the past 6 months. Some will be steadies, there every month, others seasonal in nature. Those customers who have tanned in the past 24 months, but not in the past 6 months are worth $3 per name.
Secondly: the lease. A favorable lease is worth money, and unfavorable one can spoil the deal, and make the salon worthless. Favorable conditions are a below market rate, unusual landlord concessions, and a long remaining term, or unclaimed lease extension options.
: The potential cash flow of the salon. If you can document the income and expenses of the salon, it is better. If you tell the buyer that the salon made more money than you have documentation for he will discount your statements. I would estimate that the "cash flow" of a standard salon is around 20-30% of the gross annual income. A buyer will usually pay around one year's cash flow to obtain the income stream.

However, if that seems overly complicated. Know that some broker will take your "NET Profit" and times it by 2.5(or 1.5 not sure.) And this determines the asking price THEY will list it for in their brokerage firm.

The easiest way is to sell her salon based on the last years Gross Sales. (As submited to the IRS.)

I suppose there is more then one way to skin a cat. Good Luck.

[ This Message was edited by: MJ on 2004-02-16 11:28 ]
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Old 02-18-2004, 06:23 PM   #5 (permalink)
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Where is the salon located and have you sold it, and if not, have you come up with a price? I maybe interested.
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Old 02-23-2004, 12:51 PM   #6 (permalink)
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The standard is usually one years gross sales. Thats what I sell for and it's how I place a value on a salon I'm going to purchase
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