beachtanning

Neon, Yes they actually have several reasons that revenue has gone down...some good, some not so good. First, the road in front of their salon was under major construction for all of 2004. For most of the year, the road turning into their salon was totally closed...you had to go against traffic to even get in their parking lot, and often there were workers there flagging you in the other direction.

Secondly, they had employee theft. It went so far as to go to court for missing inventory, cash, etc. Upon further review, they found many people had paid but it never made it into the computer (pocketed). I blame them on this, for not having controls in place, but with a total absentee owner and employees that I personally would never have hired, I can see how this happened.

Third is related to the second. The employees had complete control of the place. At minimum wage, and no one ever checking up, they would close for 2 hour lunches, close for days at a time and not come in, let their friends and family tan for free, etc. etc. I understand that the owner didn't have a choice and she was very ill and is still ill...and that is why they are selling as she is not getting better.

I think it has great opportunity to succeed - with work. It's at a great location - here in Florida where spring breakers come by the tens of thousands. HOWEVER, the running of the business has ruined their client base and will need mending. I think a GREAT marketing campaign with direct mailing, in-house specials, loyalty incentives, etc will make a world of difference. Also, the road construction is nearing completion and the road is again accessible (but has only been since November).

The owner did have great intentions. A beautiful build out, upgrades to equipment/electrical/hvac...but when you don't advertise and your customers walk up to tan and there is constantly a "we are closed" (for one reason or another) there are significant problems.

Are these reasons good enough to take a chance at paying $60K?? I know after much negotiations that they will not come down from this price. I also know that I couldn't pick a better location for a cheaper price here on the beach. So it's a catch 22. Either go with this one and hope for the best (with work) or go into a different business totally as I don't have the money to create a start up here.

Angie

DWhite6872

How many tanning salons are in the area? How many beds per salon? The best salon there..what is it like and what type of equipment? Have you pulled a 1,3,5 mile demographics? Is there any new construction of retail in your town? Will this be your job?

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[ This Message was edited by: DWhite6872 on 2004-12-26 16:09 ]

beachtanning

There are only three other tanning salons in the area - between 1-5 miles. The one I'm interested in has the best location. The one closest is an older salon that is tucked away in the back of a building. The second is new but in a residential area that will not get tourists. The third is about 3 miles away and is about equivalent to the one I'm interested in. We have another salon that only does airbrush tanning - and two of the other salons offer that too. I would not offer it. The salons offer between 5 and 8 beds.

There is plenty of new construction in this area for retail, but it's mostly a year out or more. The problem is that rents are so high for the new construction that a tanning business would have a hard time surviving.

I plan to make this my job and have part time help as needed. I would like to eventually buy out or start a second salon and go from there.

DWhite6872

why would you not offer sunless? The booth... not airbrushing....can you get an SBA loan..so you can save most of the 60k for reserves?