TheBoss

Hello - I have really enjoyed doing research and reading what everyone thinks about the tanning business on this forum.

I am planning on either starting/or buying a tanning salon for my wife.

I have been speaking to the owner of a salon and have negotiated a price for his business $35k -

the salon has the following beds
1996 Cyberdome, 3 Sundash 26 2-from 1995 and 1 from 1997, 1 Sundash from 1998 and 1 sundash from 1999. 1 stand up Sun Capsule year 2000. That is a total of 6 beds and 1 standup. Of course it comes with the Washer/Dryer, tv, sofa, computer etc.. with it.

It does need some fixing up - paint , new carpet etc..we are going to be a themed saloon and it will take some time to get it ready etc..

The person really has not run the place that well and his numbers do not look good. But the location is really good EXCEPT there is a 24 bed salon about a mile away, off the main street that really looks nice and has all new beds. This really scares me...and there prices are $20 for unlimited monthly - which is what ours are going to be.

Now - I have been thinking about going down the road where there is not a salon in site for about 20 miles and opening one up in a new strip mall.

My question - is it worth it to start from scratch in my instance and go with the location far from the competition and spend the extra money, or do I spend the $35,000 get the other salon that is already set up and try and put more money into it down the road.

thanks for any advice you might have!!!

Mark

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[ This Message was edited by: TheBoss on 2004-11-14 19:25 ]

tanu01

Does the one your looking to buy have room for expansion ?

TheBoss

Quote:
On 2004-11-14 18:59:00, tanu01 wrote:
Does the one your looking to buy have room for expansion ?


Its got 1 room already wire for a bed and I have room to build 2 more rooms for beds, so that would be 3 more beds. What do you think about his price?

thanks!

Mark

tanu01

The price is fair concidering just a 7 room build out would cost you close to 10k.
To do anything but trade money you'll need those extra 3 units

MJ

Here are some Key questions you should ask.....JMHO
OH BTW, I also noticed,You did not mention the client base...
*Is it hard card or cumputerized?

*How long has the salon been there?

*How new is the PC or software?

*How many clients in the system?

*How many of those are active?

TIP: if the salon is computerized and they say there is no ONE REPORT they can run to get you the Number of active clients in the last year-18 months.....stop here build your own...or keep looking for a more honest seller.
Currently 'active' clients ready to spend their money at your salon.
That is the purpose of purchasing an existing salon....right?
Who gives a rats a$$ about how many clients they accumulated thru the years if over 70% of them have not been active for over 18 months. JMHO


*How does the current owner advertise?


*The Lease..is there one?
-what is the length remaining on the current
lease you would have to honor?
-Is it a gross lease or a triple net?
-Is there an option to renew after it has expired?
-If there is no lease, what terms are they looking for?
-Are you experienced in negotiating a fair lease?
-If not can you afford help in negioating a lease?

*How about the electrical....is it enough to support your future plans?

*The HVAC......air conditioning tonage that is currently there?
-Is that enough to support any changes you might have in the bed line up you plan to have in the near future?

*what kind of prices/packages does the current owner base thier PPA(average Per Person Average) on?

Last but not least...
what does your gut say?

Listen to it.
Do not get caught up in what you would do differently.....Or what they are doing wrong.
Pay attention to the details that could cost you alot later. Superficial changes are the least of your worries. Paint... smaint You have all of next slow season to redecorate.

OH another thing:
The number of tanners per day and the ching numbers that most sellers( and non sellers) boast about, on and off line, are so full of it.... I can smell them from here.

Think about it...
Which one would you rather have:
An Established smaller salon that is tanning 35-35 people a day, during slow season earning 9-12 dollars PPA.(Visable 'claimed' income)
OR a similar salon that is tanning two to three times the daily tanners for the same amount of money..or less? (they usually show less too, not to mention have larger bills, electric, lamps, supplies, staff payroll and are often badly managed from an almost-absentie ownership state)



You make the call.
Just my two cents.


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Jane... You Ignorant Sl*t!!!

[ This Message was edited by: MJ on 2004-11-15 00:28 ]

studio 102

I say, WALK! With a mega salon a mile away, that could be why this salon was not run well..the present owner knew it was too competitive, and put little effort in maintaining it.

The 35K you would spend could open a nice 5-6 bed salon, further from the 20 bed competitor. With the proper mix, a 5-6 bed salon could be very competitive. You may want to look into leasing some new equipment..contract the buildout yourself, negotiate w/landlord to do most..save $$$ to carry thru..just MHO

By the way, the beds in the salon are too old. The Cyberdome is old..not made anymore..and is underpowered. Also, a 26lamp base bed is for home use. A base bed should be 32lamps in todays market..I would put no less than a 34 lamp bed for a base bed..PM me for some suggested models, if you wish.

TRTS

If you have a choice, I would give serious consideration to a new salon. You will need to purchase new equipment either way. By doing so, you will not want to offer monthly unlimited for $20.00. The cheapest tan in town is not always the best tan in town. NEW excites people and others will come from other salons just to check you out. We have been open since May of this year and people are not afraid to drive a little distance for a better service. There is a salon in a neighboring town that has been in business for 20 years. I recently got two more of her clients one has tanned with her 8 years and the other 15 years. Both said it was kind of hard to switch but they like everything we have to offer. My point is regardless of what you do to make the existing place better some may not give you a try because of what they already know about the place. A "NEW" salon may bring clients to you from the salon offering $20 unlimited tans. Good luck to you in whatever decision you make!

engfant

I don't think that this is a bad deal ESPECIALLY if the space is not maxed out electricity and space wise.

"The 35K you would spend could open a nice 5-6 bed salon, further from the 20 bed competitor. With the proper mix, a 5-6 bed salon could be very competitive. You may want to look into leasing some new equipment..contract the buildout yourself, negotiate w/landlord to do most..save $$$ to carry thru..just MHO "

Oh MAN does anyone ELSE not see reality in that statement? Are you sure you meant that? You can set up a complete salon with buildout, logo design, signs, etc for $35K? If so you REALLY should look into seting up salons for people, seriously.

I say, check out the area for other POTENTIAL dangers AS IN, buildings that LOOK like they could carry a tanning salon. The salon I bought is across the street from a GRAVEYARD and a full shopping center that has septic problems.
THAT'S IT. There are NO other places that can hold a salon WITHOUT A HUGE INVESTMENT that would NEVER pay off.

If this is your situation, you got a pretty good deal on your hands.

DON'T BELIEVE THE HYPE ON THE SURROUNDING SALONS. The "top dogs" that were SUPPOSED TO run me out of business (according to the bitter locals) are ALL out of business or changing hands cause you CANNOT support a lifestyle of LUXURY IN MASSACHUSETTS when your $300K tanning salon is only bringing in $4K/month 6 months a year.
If you got the SACK, you'll throw down the dough and go for it.

24hr salon? Do you know what kind of HASSLE that must be to keep going? If the place is filled with children workers then you SHOULD have no problems. Take out a $50k loan, do over the place, trade up those beds (atleast a couple) with some WORKHORSES and tan some arse.

Focus on being there for the people. Bring in tanning lotions that are more "adult" which DOESN'T mean pornographic. Something people can go back to WORK wearing.

sunshinetanningfactory

I have to disagree with studio 102 on your beds. I think it really depends on where you are located to say that these beds are no good. My salon is in a small town and I have the same sort of mix.(minus the cyberdome) If I was to replace with the latest and greatest i would put my self out of business. Last year I added a face tanner beds and could not get anyone to go in it. Like I said it all depends on where you are located to base you equipment on.

As for buying the existing salon. They are in the ballpark for price, but I would do some research about the area and go take a look at your competition. Go with what you gut says. It usually is right.

I bought my salon last August. The previous owners stuffed the computer, were crooks and just scum bags. I have sense moved my location and have gotten back tanners that they turned off. Its really hard to say what to do i would say go with your gut! Good luck!

TheBoss

Thanks for all the input - I will keep you posted -

Mark