njcop12

Hi all,
Currently kicking around the idea of buying a tanning salon. I am new to the tanning business and currently work full time, so I'm looking at this to supplement my income and not Necessarily looking to replace my job (at least not a first). I am choosing to buy a preowned salon because I currently can't devote the amount of time necessary to run a start up. I'm looking for a profitable salon in which I can supplement my income without much hands on, if that's at all possible. I'm currently looking at a 2,000 Square foot location that has 16 beds and has been in business for 12 years. The ad states it's grossing between 225000 to 250000 with a cash flow of approximatly 100,000. The rent seems rather high to me at $5,300 and the sale price is at approximalty $250,000 of which I have about 60-80000 to put down. My question is does the sale price seem fair? At face value this seems like a profitable salon but i'm not sure if the sale price coupled with the expenses would put me over my head and run me into the ground. What are some of the questions I should be asking or some of the pit falls I should avoid? What type of expenses am I going to incur and what should I be preparing for durning my first year? Are my goals of taking over a salon and profiting immediately realistic?

Thank you all in advance for your help

Steve Underhill

If the salon is for sale, typically it is failing or in desperate need of an overhaul. A salon is worth about 2 x the previous year net profit. That is a good rule to go by. When purchasing a salon you must approach it just as though you are opening a new salon. If the salon is failing and it probably is. When you buy it the down slide will continue unless you have evaluated the salon and identified what is needed to make it a successful salon. For a 12 year old salon this probably means new equipment and a cosmetic repackaging. The cost of this must be figured into the purchase price. There is a lot you must know about this salon before considering the purchase.