Steve Underhill

A quicker less expensive way of getting into the indoor tanning industry is to purchase an existing salon. However you must be cautious because there are many potential pit falls.

90% of all tanning salons are struggling or failing, typically if a salon is for sale it falls into this category. This alarming statistic is not due to a week industry, instead it is a result of new salon owners not being properly educated and prepared for success.

When evaluating the purchase of an existing salon you must approach it as though you are opening a new salon from the ground up. You must first determine the potential of the salon by evaluating the demographics. If the demographics are good you can now evaluate the salon further. Always look at the parking situation and how easy it is to access the location. You should determine all of the changes that must be made to create a successful salon. To do this you must again have the information and knowledge required to be successful. You must determine the cost associated with making these changes.

You must determine the value of the salon by asking a number of very important questions. Net profit of the salon, equipment value or a combination of both will determine the value.

Very old salons can be a problem because the rooms are typically too small. With proper evaluation, a proven plan for success that the previous owner did not have and the proper funding to make the appropriate changes will allow you to own and operate a successful salon saving a great deal of money over opening a new salon from the ground up. Major mistakes made by people that purchase failing salons: Paying more than the salon is worth, not being any more qualified to operate a successful salon than the previous owner, not identifying or making the changes necessary to create a successful salon, not being properly funded. It is just as easy to succeed as it is to fail, knowledge is power. Get qualified assistance or become a part of an alarming statistic.

engfant

listen to this man. He knows.

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Elise

Steve, thanks for the information. I am about to buy an existing salon in the next town over from where my 1st salon is. I opened my current store (new construction) July 16th and we've been doing very well. (I may be the exception, but I loved the build-out process) I'm excited to open the 2nd, but the fact that it IS a current salon makes me a bit nervous. On one hand, I feel like it'll be easier because I won't have to change absolutely everything. On the other hand, I feel as though it's going to be even more work because of the things that do need to be changed.
What makes me comfortable is the fact that I know I am not under-funded. I would NEVER go into this industry or any other, without my own cash and plenty of it. I paid for everything up front, no leases.
I am using the same contractor who did my current salon, for the 2nd salon. He knows exactly what I like and how to budget everything accordingly. Nothing like having a contractor you trust.

yveskleinsky

I am considering buying an existing salon. They have been in business for 3 years and the whole place has been remodeled and they did a great job. I haven't seen numbers from the seller (yet) but was told that they gross $1600/month. I don't know if this is an average or what they are doing now. The salon has 5 beds and rents one room to a massage lady.

What is the difference in sales between he busy season and slow season?

How did you guys value what the business was worth? Is there a certain rule of thumb, like gross sales x 3, or something like that?

Has anyone here been an absentee owner? How has that worked for you?

Can't wait to hear what everyone has to say!

Steve Underhill

Always consider the option of purchasing an existing salon.

Ezliving_Jim

That's a hobby, not a business. That isn't covering expenses.

$16,000/mo would be a different story.

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"In my view, there simply is no untouchable constitutional right guaranteed by the Second Amendment to keep loaded handguns in the house in crime-ridden urban areas." - Supreme Court Justice Stephen Breyer.

Steve Underhill

Purchasing an existing salon requires the steps as opening a new salon