How to determine price to pay for existing tanning business?

bekat · 06-27-2004, 10:59 AM

Looking to buy an existing business..price seems high....is there something or someplace I can look up info to determine value and price for the business?? Or is there someone I can talk to?? ANY info would be appreciated!! You can e-mail me direct at Bekat2000@msn.com

Thank You!!

West Side Tanner · 06-27-2004, 02:31 PM

Did you search here at TanTalk ? There was a BIG discussion here last month !

vette5960 · 06-27-2004, 09:01 PM

Give some details on the business. How many beds? What's included in the sale? How many customers? What's the asking price?

gripmarketing · 06-30-2004, 01:06 PM

EBDIT (Earnings Before Depreciation Interest and Taxes) times a multiple of 2-3. The multiple can be adjusted up or discounted downward due to age of equipment, good will of customer base (lifetime value), accuracy of info, location, buildout, etc.

jbme · 07-04-2004, 03:36 AM

I am also looking at an exsiting business. Hard to figure out what the income was with the bookkeeping they did. The business showed one amount with the p & l and the balance sheet also showed the monies taken out by the owner, draws and personal. What do you base the income on one plus the other??? HELP!!!

vette5960 · 07-04-2004, 09:57 AM

I am in the process of looking at one also. First off, don't even bother looking at "official" documents (tax returns, p&l sheets) Odds are they did not report nearly what came into the business since it was mostly cash. Ask if he/she kept a ledger of daily income for their personal use. Ask for a copy of the electric bill. Someone who tells you they are doing $20,000 in business in the busy month but has a $300 electric bill is obviously lying. Also, check the hours on the bed...some have meters. You will never be completely satisified (like me) until you take over the business and you can see for yourself. That's the nature of cash businesses....you just don't know.

tanu01 · 07-04-2004, 07:57 PM

In my opinion the only thing a salon is worth is the cost of a new build out. The only time I would pay more then that
would be if I wanted there location and beds.
I recently bought a five bed salon,3 hair stations and all the stuff that comes along.paid 30grand. I gutted the the building and started from scratch. New beds,new AC, new heat,New electric. The only reason I bought it was because it was the only downtown site open,and had private parking for 30 cars.
Flick

West Side Tanner · 07-06-2004, 02:33 PM

Electric bills ?? From what I read on another post, the NE has very high electric rates, compared to other areas. So, to say a low bill would not reflect sales is incorrect.

vette5960 · 07-06-2004, 09:02 PM

Regardless of where you from and what your electric rates are, a $100 per month electric bill means you are doing nothing. Plus, look at the last 12 months and you can get a good idea of the busy and slow months.

West Side Tanner · 07-06-2004, 09:09 PM

What if they are cheap and don't run the a/c ?

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06-27-2004, 10:59 AM	#1 (permalink)
bekat Join Date: Jun 27 2004 Posts: 2 Rep Power: 0	Looking to buy an existing business..price seems high....is there something or someplace I can look up info to determine value and price for the business?? Or is there someone I can talk to?? ANY info would be appreciated!! You can e-mail me direct at Bekat2000@msn.com Thank You!!

06-27-2004, 02:31 PM	#2 (permalink)
West Side Tanner Join Date: Dec 27 2003 Location: Florida Posts: 2,548 Rep Power: 5	Did you search here at TanTalk ? There was a BIG discussion here last month !

06-27-2004, 09:01 PM	#3 (permalink)
vette5960 Join Date: Jun 12 2004 Posts: 13 Rep Power: 0	Give some details on the business. How many beds? What's included in the sale? How many customers? What's the asking price?

07-04-2004, 03:36 AM	#5 (permalink)
jbme Join Date: Jun 25 2004 Location: Pismo Beach, CA Posts: 13 Rep Power: 0	I am also looking at an exsiting business. Hard to figure out what the income was with the bookkeeping they did. The business showed one amount with the p & l and the balance sheet also showed the monies taken out by the owner, draws and personal. What do you base the income on one plus the other??? HELP!!!

07-04-2004, 09:57 AM	#6 (permalink)
vette5960 Join Date: Jun 12 2004 Posts: 13 Rep Power: 0	I am in the process of looking at one also. First off, don't even bother looking at "official" documents (tax returns, p&l sheets) Odds are they did not report nearly what came into the business since it was mostly cash. Ask if he/she kept a ledger of daily income for their personal use. Ask for a copy of the electric bill. Someone who tells you they are doing $20,000 in business in the busy month but has a $300 electric bill is obviously lying. Also, check the hours on the bed...some have meters. You will never be completely satisified (like me) until you take over the business and you can see for yourself. That's the nature of cash businesses....you just don't know.

07-04-2004, 07:57 PM	#7 (permalink)
tanu01 "The Man" Join Date: Mar 4 2003 Location: ohio Posts: 3,977 Rep Power: 7	In my opinion the only thing a salon is worth is the cost of a new build out. The only time I would pay more then that would be if I wanted there location and beds. I recently bought a five bed salon,3 hair stations and all the stuff that comes along.paid 30grand. I gutted the the building and started from scratch. New beds,new AC, new heat,New electric. The only reason I bought it was because it was the only downtown site open,and had private parking for 30 cars. Flick

07-06-2004, 02:33 PM	#8 (permalink)
West Side Tanner Join Date: Dec 27 2003 Location: Florida Posts: 2,548 Rep Power: 5	Electric bills ?? From what I read on another post, the NE has very high electric rates, compared to other areas. So, to say a low bill would not reflect sales is incorrect.

07-06-2004, 09:02 PM	#9 (permalink)
vette5960 Join Date: Jun 12 2004 Posts: 13 Rep Power: 0	Regardless of where you from and what your electric rates are, a $100 per month electric bill means you are doing nothing. Plus, look at the last 12 months and you can get a good idea of the busy and slow months.

07-06-2004, 09:09 PM	#10 (permalink)
West Side Tanner Join Date: Dec 27 2003 Location: Florida Posts: 2,548 Rep Power: 5	What if they are cheap and don't run the a/c ?

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