excitednewguy

that's too funny,,,,,,,how is pointing out "other things" stalking?????? I wasn't talking to or at Steve, I was talking to the original poster............

Brandy1

Those are alot of questions. And those are good guidelines for the sellers to have ready for any prospective buyers.
Good job guys.

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Steve Underhill

The reason you must look at active tanners at 12 months is in order to evaluate your mailing list. The mailing list has value and is considered active and current for 12 months. Some tanners are seasonal tanners and you must go to 12 months in order to identify these tanners. While there many, many questions that can be asked, what you are trying to do is establish current value and if it can be up-graded to a standard that will allow it to be a profitable salon by current standards. If you are not financially in a position to make the required changes as well as purchase price, you will just be buying a salon that will continue to struggle. Very old salons with very old equipment require a complete make-over to survive.

excitednewguy

I agree 100%. We have looked at many, many older Salons to buy, but always calculated the costs for a "face lift" which is almost always needed when buying an older Salon. Your biggest resoning for buying an old salon usually is because they have a great location and that's your biggest obstacle when building new, to find the spot and also find one that is affordable, which is where the lease research comes into play, maybe being able to get into a much favorable/older existing lease, versus paying today's dollar to rent space...

Rhino

excitednewguy are you and steve one of the same, I take offense of your last sentence in your buying advise ( but now I know the source and oh well)
Take into consideration there are operations like mine that I am moving clear across the USA, so you want me to commute every morning to work? There is nothing wrong with my salon, we just updated everything so its brand new again, so somebody will get a super deal. My overhead is so low it would make your head spin and yes we have an absolutly wonderful traffic area. Also my lease is assumable at the same rate I have pd for 9 years. But if to many first time purchasers listen to your last sentence advise to much, which they will remember the most and somebody that really wants to get into this industry is gonna miss a really super opportunity, especially with mine. There are probably alot of others that are for sale,with closeto my situation or just wanting to retire that don't fall into your dead beat catagory either. Do you think that I would have put 15,000 into aremodel last year if I was doing bad and I didn't take out a loan or home equity.
Prove my point they are the same person, they are agreeing with each other

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Catching new clients, think my avatar will help

Mr Derf

They are not the same person.

JGAviator

A well-established salon with a good customer based will/should sell at that multiple, but remember it's based on net profits (and including add-backs). If a salon is not running well and only netting $10K a year, well then it's not going to sell for that much but still pretty close to the multiple. Lots of factors go into valuating a business and there's tons of data to prove the multiples.

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Tan Crazy.

bertcompton

Hello everyone! I have been reading all the posts on buying an existing salon to starting your own and I am oooh sooo very confused. First of all I live in Michigan which at the present time...the economy here stinks. However, I decided I wanted to buy a specific tanning salon which has been in business for 3 years and seems to be doing very well clientele wise. (I have sat in the parking lot and observed the number of clients tanning at various times of the day, various days of the week and even throughout the summer months.) The owner has some spectacular connections which has helped make this business what it appears to be. She has chosen to sell because of retired hubby who wants to travel. All and all, it appears to be a profitable business until you take a look at the P&L. Then I read posts on here and it scares me that this is not a profitable business and I could lose everything....not what I want to do.

It has 7 beds and 3 stand up. Levels I, II and III. This is Perfect Tan equipment. Clientle total (active & inactive) 3200, located in a strip mall in an ever expanding part of town. She is asking $120,900. As I look on here at salons for sale, granted they might have 6 or 8 units, but the price is substantially lower enough to cause concern. Is she asking too much? And with that kind of price tag, what should be the net. And since this IS a cash business, what do I actually want to ask (the owner) to see? Do I want to look at bank statements to actually see where the cash is flowing to and from? Please help. If you need more information to be able to help me, just ask.

Ezliving_Jim

Like I said:

... a business broker representing the seller (and his commission) is pitching that blue-sky-hopes-and-dreams scenario ....

Were you crazy enough to pay 2.5 times net for your tanning salon?

How many tanning salons (just tanning, no hair or day spa) have you personally sold for 2.5 times net? If any, what was the justification for the price?

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ObamaNation. Sing with the children. Drink the Kool-Aide.

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Steve Underhill

You must look at tax returns, please describe equipment including brand.