Buying a 14 yr old salon - Page 2

ltaylor · 08-21-2007, 03:20 PM

I went to the salon and pretended to be a new customer wanting information. The current owner suggested that I do this. The employees were very helpful and the salon was a nice set up. It was very busy when I went in there. The current owner is willing to stay on lease with me so I don't have to worry about that in the start up cost. That made me feel a little more comfortable b/c I feel that he knows the salon will continue to generate a good cash flow. As we all know what he claims on the taxes is not always every penny coming into the salon. In not so many words I was told about the cash that's not claimed. Owning a tanning salon has always been a dream of mine. Why? I don't know. I don't mind hard work and I'm very dedicated to whatever I start. This acutally SCARES ME TO DEATH......

engfant · 08-21-2007, 03:30 PM

Very busy? WOW! That's a good sign. I say go for it if it's what you want to do.

ltaylor · 08-21-2007, 03:41 PM

I was amazed. I figured tanning started slowing down around this time of year. When does it really start to slow down? At that time how much does it normally drop? 50%, 75%? I want to make sure I have reserve for that time period.

engfant · 08-21-2007, 03:42 PM

Let's just say that I've seen 15K in a month and in the same year 2K.

Not always that extreme but it can be. Just don't start getting diamonds in your grill till you paid off the place.

ltaylor · 08-21-2007, 03:53 PM

I know all about saving in the good months to get you thru the bad. My husbad owns a construction business and it's the same way. I'm not happy about buying this salon during the slow season but at least I'll be ready when the busy season starts.

engfant · 08-21-2007, 04:37 PM

Nah that's better cause it'll give you time to figure the place out. EVERYTHING has it's quirks. As long as you realize that ALL BUSINESS has an off season you should be good.

BP · 08-21-2007, 05:17 PM

I would not work that hard for that return

engfant · 08-21-2007, 06:26 PM

WHERE THOUGH????? Are you in an area that you can buy a MANSION for $400K or are 1 room studios $400K???

Not everywhere is $100K/year just to get by.

JIMJEN · 08-21-2007, 07:25 PM

^^Do you check your PM's?

Barefoot Beach · 08-21-2007, 10:01 PM

ltaylor.....
I own two salons in Atlanta and here are my thoughts about your purchase for what they're worth. Your numbers indicate an annual overhead of only $50K. That's extremely cheap which could be a big negative. Low rent due to bad location? Owner involved full time minimizing payroll? Careful. 90K in annual sales is very weak for a 15 year old salon. Is this a rural area? The "season" is over Sept 1 and it is survival until Feb 1. A 90K salon is likely to have negative cash flow the next 6 months. Factor that into your offer. If you have the cash, I'd always go for salons with higher sales (125K minimum) and pay a higher price. See if the owner will take a sizable down payment and owner finance the balance.

08-21-2007, 03:20 PM	#11 (permalink)
ltaylor Join Date: Jan 5 2006 Location: georgia Posts: 54 Rep Power: 0	Re: Buying a 14 yr old salon I went to the salon and pretended to be a new customer wanting information. The current owner suggested that I do this. The employees were very helpful and the salon was a nice set up. It was very busy when I went in there. The current owner is willing to stay on lease with me so I don't have to worry about that in the start up cost. That made me feel a little more comfortable b/c I feel that he knows the salon will continue to generate a good cash flow. As we all know what he claims on the taxes is not always every penny coming into the salon. In not so many words I was told about the cash that's not claimed. Owning a tanning salon has always been a dream of mine. Why? I don't know. I don't mind hard work and I'm very dedicated to whatever I start. This acutally SCARES ME TO DEATH......

08-21-2007, 03:30 PM	#12 (permalink)
engfant FREE ENGFANTUCATION Join Date: May 20 2003 Posts: 8,485 Rep Power: 12	Re: Buying a 14 yr old salon Very busy? WOW! That's a good sign. I say go for it if it's what you want to do. __________________ Nothing is more dangerous than stupid. The #1 cause of death is natural causes...but where's the ribbon? http://mercola.fileburst.com/Flash/A...wsubscribe.swf

08-21-2007, 03:41 PM	#13 (permalink)
ltaylor Join Date: Jan 5 2006 Location: georgia Posts: 54 Rep Power: 0	Re: Buying a 14 yr old salon I was amazed. I figured tanning started slowing down around this time of year. When does it really start to slow down? At that time how much does it normally drop? 50%, 75%? I want to make sure I have reserve for that time period.

08-21-2007, 03:42 PM	#14 (permalink)
engfant FREE ENGFANTUCATION Join Date: May 20 2003 Posts: 8,485 Rep Power: 12	Re: Buying a 14 yr old salon Let's just say that I've seen 15K in a month and in the same year 2K. Not always that extreme but it can be. Just don't start getting diamonds in your grill till you paid off the place. __________________ Nothing is more dangerous than stupid. The #1 cause of death is natural causes...but where's the ribbon? http://mercola.fileburst.com/Flash/A...wsubscribe.swf

08-21-2007, 03:53 PM	#15 (permalink)
ltaylor Join Date: Jan 5 2006 Location: georgia Posts: 54 Rep Power: 0	Re: Buying a 14 yr old salon I know all about saving in the good months to get you thru the bad. My husbad owns a construction business and it's the same way. I'm not happy about buying this salon during the slow season but at least I'll be ready when the busy season starts.

08-21-2007, 04:37 PM	#16 (permalink)
engfant FREE ENGFANTUCATION Join Date: May 20 2003 Posts: 8,485 Rep Power: 12	Re: Buying a 14 yr old salon Nah that's better cause it'll give you time to figure the place out. EVERYTHING has it's quirks. As long as you realize that ALL BUSINESS has an off season you should be good. __________________ Nothing is more dangerous than stupid. The #1 cause of death is natural causes...but where's the ribbon? http://mercola.fileburst.com/Flash/A...wsubscribe.swf

08-21-2007, 05:17 PM	#17 (permalink)
BP I love Derf!! Join Date: Apr 13 2004 Location: West Coast Age: 41 Posts: 927 Rep Power: 6	Re: Buying a 14 yr old salon I would not work that hard for that return

08-21-2007, 06:26 PM	#18 (permalink)
engfant FREE ENGFANTUCATION Join Date: May 20 2003 Posts: 8,485 Rep Power: 12	Re: Buying a 14 yr old salon WHERE THOUGH????? Are you in an area that you can buy a MANSION for $400K or are 1 room studios $400K??? Not everywhere is $100K/year just to get by. __________________ Nothing is more dangerous than stupid. The #1 cause of death is natural causes...but where's the ribbon? http://mercola.fileburst.com/Flash/A...wsubscribe.swf

08-21-2007, 07:25 PM	#19 (permalink)
JIMJEN I love Derf!! Join Date: Dec 6 2003 Posts: 852 Rep Power: 5	Re: Buying a 14 yr old salon ^^Do you check your PM's?

08-21-2007, 10:01 PM	#20 (permalink)
Barefoot Beach Join Date: Mar 31 2007 Location: Marietta, Georgia Posts: 7 Rep Power: 0	Re: Buying a 14 yr old salon ltaylor..... I own two salons in Atlanta and here are my thoughts about your purchase for what they're worth. Your numbers indicate an annual overhead of only $50K. That's extremely cheap which could be a big negative. Low rent due to bad location? Owner involved full time minimizing payroll? Careful. 90K in annual sales is very weak for a 15 year old salon. Is this a rural area? The "season" is over Sept 1 and it is survival until Feb 1. A 90K salon is likely to have negative cash flow the next 6 months. Factor that into your offer. If you have the cash, I'd always go for salons with higher sales (125K minimum) and pay a higher price. See if the owner will take a sizable down payment and owner finance the balance.

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