Are these Typical numbers?

Definitions · 08-01-2005, 01:32 PM

I am in the process of purchasing a tanning salon. I would like to hear some feedback on the expenses I have been shown. Are they typical for a salon of this size, etc.

This is what I have, yearly figures:

Rent 61,188. 3,000 sq ft.
Emp Wages 42,000
Prop tax 2,700
Elec 10,800
Phone 864
Lotions 6,000
Bulbs 5,500 (once a year change)
Credit card fees 3,600
Insurance 3,800
Work Comp 1,200
Manager/owner (1) 17,290
Cell phones 1,380
Accountant 1,800
Manager/owner (2) 21,600
Security 300
Magic tan solu 2,000

In total that is 182,022.00. Are they not telling us about anything? We don't want to have some huge unexpected cost. I work next door,and tan there myself... beds are in good working order. Onsite laundry. I can't think of anything else.

Definitions · 08-01-2005, 01:35 PM

Oh, before the questions come, I forgot a few things. They have 16 beds and one Magic spray. Two of 16 are standup, no High pressures. All ETS.

OASIS BEACH · 08-01-2005, 02:02 PM

This is yearly costs correct?

Definitions · 08-01-2005, 02:28 PM

Quote:
On 2005-08-01 14:02:00, OASIS BEACH wrote:
This is yearly costs correct?

This is correct. All figures are yearly.

Mama Tan · 08-01-2005, 02:42 PM

I really think the bulb amount is very very low for a salon that size............and only a once a year change? A busy salon would definitely change their bulbs more than once a year. Why are you paying property tax if you're renting the building? I'm sure you could cut some of these costs if you shopped around.......like the accountant seems pretty high, and cell phone bills too. Also, the lotion cost seems very low. If they are only making $12,000 a year selling lotion.......they are missing the boat for a salon of that size.

doc1 · 08-01-2005, 04:03 PM

If they have $3600 worth of credit card fees then they must be doing a **** of a lot of business on cards!

Tanology · 08-01-2005, 04:11 PM

Rent seems a little crazy where are you located? I am soo lucky I have 4 beds and a private area for services (skincare) and I pay ONLY $385 per month with all utilities included yeah believe it or not aircondition, electricity, heat, snowremoval, insurance on building is even included. What a steal!! I am dreading expanding because that means I have to move and my rent will be a total reality check!God Bless my landlord he even does the maintenance like if a bulb goes out!

sbtan · 08-01-2005, 08:11 PM

$100,000 in overall payroll... owner, 2 managers and payroll? cell phones? Think of what you may end up with after eliminating the excess.

TheBeachStop · 08-02-2005, 12:55 AM

What state are you in? Workers comp seems really low for the employee payroll. For Beauty Salon/Barber Shops as a lot of tannings salons are classified under is about 11% +/-. Also, depending on where you are located, the electrical seems low also. How many A/C's? For that size you should have at least 4 - 4ton units, but should have at least 20 tons for the size shop and equipment. Also, I agree with sbtan, cut the fluff out. You can add whatever you want, but start with what is really essential first.

sunsally · 08-02-2005, 06:46 AM

Rent appears to be about $20/s.f. Not outrageous depending on your market, but about as high as you would want to go for a tanning salon. Does it make sense given what you pay?

Payroll calculates out to paying someone $7/hr for 16 hrs/day as well as minimal owner salaries ($350-400/wk). With that size salon and traffic, I'm sure that means the owners put in significant hours but have extra help during busy season (would probably have at least 3 on some shifts for busy season) and probably someone to cover a decent chunk of the weekends/evenings during the rest of the year. Ask to be sure, but I'd bet they have a full-time "job" for that 20K each.

Find out when they change lamps. Agree with others - 1x/year is probably letting them go way too long with this kind of traffic, giving a poor result. It's based on bed usage hours, but I'd bet on at least 2X/year.

Missing stuff?
1. Shop supplies - TP, papertowel, laundry soap, cleaning products, tisses & wipes, ...
2. Other utilities/monthly charges - gas, water, internet access (?), salon software support (?), mag subscriptions for lobby,
3. 6K in lotions translates to about 20K retail sold (max). That would be a VERY low amount of lotion sold for this total revenue. Most salons aim for at least 30% of retail sales being product - in this case, more like 50-60K (which would cost 15-20K)
4. The BIGGIE - there are NO advertising costs shown at all!!!! Would expect to plow back at least 5-10% of revenues toward advertising normally -- another $10-20K.

Hope this helps! PM me with any other questions if you want.

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08-01-2005, 01:35 PM	#2 (permalink)
Definitions Join Date: Jul 31 2005 Location: CO Posts: 31 Rep Power: 0	Oh, before the questions come, I forgot a few things. They have 16 beds and one Magic spray. Two of 16 are standup, no High pressures. All ETS.

08-01-2005, 02:02 PM	#3 (permalink)
OASIS BEACH Join Date: Mar 23 2004 Location: Florida Age: 46 Posts: 405 Rep Power: 5	This is yearly costs correct?

08-01-2005, 02:28 PM	#4 (permalink)
Definitions Join Date: Jul 31 2005 Location: CO Posts: 31 Rep Power: 0	Quote: On 2005-08-01 14:02:00, OASIS BEACH wrote: This is yearly costs correct? This is correct. All figures are yearly.

08-01-2005, 02:42 PM	#5 (permalink)
Mama Tan Join Date: Jun 15 2005 Posts: 54 Rep Power: 0	I really think the bulb amount is very very low for a salon that size............and only a once a year change? A busy salon would definitely change their bulbs more than once a year. Why are you paying property tax if you're renting the building? I'm sure you could cut some of these costs if you shopped around.......like the accountant seems pretty high, and cell phone bills too. Also, the lotion cost seems very low. If they are only making $12,000 a year selling lotion.......they are missing the boat for a salon of that size.

08-01-2005, 04:03 PM	#6 (permalink)
doc1 Join Date: May 21 2005 Posts: 8 Rep Power: 0	If they have $3600 worth of credit card fees then they must be doing a **** of a lot of business on cards!

08-01-2005, 08:11 PM	#8 (permalink)
sbtan Join Date: Dec 2 2003 Location: East Amherst, NY Posts: 648 Rep Power: 5	$100,000 in overall payroll... owner, 2 managers and payroll? cell phones? Think of what you may end up with after eliminating the excess.

08-02-2005, 12:55 AM	#9 (permalink)
TheBeachStop Join Date: Nov 6 2004 Posts: 247 Rep Power: 4	What state are you in? Workers comp seems really low for the employee payroll. For Beauty Salon/Barber Shops as a lot of tannings salons are classified under is about 11% +/-. Also, depending on where you are located, the electrical seems low also. How many A/C's? For that size you should have at least 4 - 4ton units, but should have at least 20 tons for the size shop and equipment. Also, I agree with sbtan, cut the fluff out. You can add whatever you want, but start with what is really essential first.

08-02-2005, 06:46 AM	#10 (permalink)
sunsally www.highlinecapital.com Join Date: Nov 23 2004 Location: ITA Member & Berman Supporter! Posts: 2,445 Rep Power: 8	Rent appears to be about $20/s.f. Not outrageous depending on your market, but about as high as you would want to go for a tanning salon. Does it make sense given what you pay? Payroll calculates out to paying someone $7/hr for 16 hrs/day as well as minimal owner salaries ($350-400/wk). With that size salon and traffic, I'm sure that means the owners put in significant hours but have extra help during busy season (would probably have at least 3 on some shifts for busy season) and probably someone to cover a decent chunk of the weekends/evenings during the rest of the year. Ask to be sure, but I'd bet they have a full-time "job" for that 20K each. Find out when they change lamps. Agree with others - 1x/year is probably letting them go way too long with this kind of traffic, giving a poor result. It's based on bed usage hours, but I'd bet on at least 2X/year. Missing stuff? 1. Shop supplies - TP, papertowel, laundry soap, cleaning products, tisses & wipes, ... 2. Other utilities/monthly charges - gas, water, internet access (?), salon software support (?), mag subscriptions for lobby, 3. 6K in lotions translates to about 20K retail sold (max). That would be a VERY low amount of lotion sold for this total revenue. Most salons aim for at least 30% of retail sales being product - in this case, more like 50-60K (which would cost 15-20K) 4. The BIGGIE - there are NO advertising costs shown at all!!!! Would expect to plow back at least 5-10% of revenues toward advertising normally -- another $10-20K. Hope this helps! PM me with any other questions if you want.

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