dwnlschmk

I am looking into buying a salon that was $40,000 for 6 beds....a Sundazzler VHR, Catalina, 2 sonnenbraune 628, and a WSS24. They lowered the price to 29k if i can come up with 20k down and they'll finance the rest. They said theyre trying to sell the salon because one of lady's is pregnant and the other one wants another baby and have no time for the salon. Their taxes show they grossed 50k last yr and net was 24k. But take into consideration that they were open horrible hours. The salon is nice and doesn't have to be redone in anyway, there is a massage therapist that rents out a room for 400.00 a month. The price is for everything in the salon including all inventory of lotion. Rent is 1300 which is good for the area that its at. Owner of the building pays all electric. The location is good on a busy street and has good parking in a building with other businesses so it would bring in more customers if you were open earlier and stayed open later then they are now. They are willing to completly train me and help me along the way even after its sold. If anyone can tell me what they think it would be greatly appreciated.

missmojorising

50,000 - 15.600 = 34,400

34,400 - 24,000 = 10,400

10+/-K for all operating expenses? -- I don't believe it -- and even if I did -- 24K is a crap net profit in any business -- you can almost make as much working at a McDonald's these days -- with out any personal liability. (NOT that I am recommending McDonald's as a viable alternative to the tanning industry -- I'm just sayin'...)

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sunsally

To follow up & detail further on Missmojo ---

Rent is 1300 x 12 = $15,600 - you are "committed" to this each year.

Electric is paid for - which is huge! However, I'd be willing to bet you have just a "standard" panel, which won't go far.

Your equipment is quite low end/outdated - worth almost $0 if you were to try to sell it. Maybe $5K to private tanners on ebay or craig's list. The only thing I would keep would be the Sundazzler and Catalina (you listed 5 beds, but said 6 - hopefully a 2nd Catalina?). Maybe the Sonnenbraun 628's originally. But you really need some upgrade equipment if you want to make more than $50K there - and my guess is that will be limited by the electric available, the room sizes, and your budget.

Insurance will be $1K minimum. Phone line will be at least $500/yr. Re-lamping those beds will be about $3K and surely needs to be done. You SHOULD be doing at least a LITTLE advertising - maybe $500/month for some ads or postcards? Call that another $5K even. Cleaning supplies, toilet paper, laundry soap,...

So if those ladies did ALL of that for $10K (they probably didn't advertise), that means they didn't make a PROFIT of $24K -- because there is no PAYROLL factored in! So they worked a "job" all year for $24K -- between them. Which is about what you would pay to give someone $7/hr for normal working hours (after taxes, etc).

SO - do you want to pay them $29K for a "job" where you can work all the hours all day long, every day - for $24K/year?

Now - do you think you can make MORE than the 50K they made?? Maybe. If you work more hours (or pay someone else to do those for you) and probably if you put a little more money into some different equipment.

If you aren't giving up a good job to take on this "job", then it might be ok - IF you have that kind of money to give them to buy yourself a job and HOPE you can make it more than that.

I would argue that the beds aren't worth much and you will have to pay to have some lamped and replace others. 10K now and 10K next year. Only if you have another 10K you are sittting on right now that you can use to re-lamp, buy a new bed or two, and pay the rent over the next few months because we are heading right into the slow season for tanning!

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Ann Wiggins Noe
VP of Leasing

anoe@highlinecapital.com

Direct line - 720-562-0450

nlabtec

Stay away from this business or any other business that us for sale for right now. You can open a brand new business in better location get better equipment on the used market right, and have room to grow. Tell them at most you will take the client list from there hands when they close there doors, and if they are not willing to do that then just wait for them to close and there client will come to you anyway.

This day and age starting off new is better than buying one salon with a lot of heartburn down the line. Unless the business had multi locations and is selling there is not need to buy any business right now.

Even thoe I will say that owner paying for you electric is huge ask him to pay mine and everyone elses!

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dwnlschmk

how much do you think I should offer them?

sunsally

^^

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Ann Wiggins Noe
VP of Leasing

anoe@highlinecapital.com

Direct line - 720-562-0450

sunsally

Are you serious?

Now, instead of trying to come up with 10-20K, you think this poster should start from scratch???

And the only one who should be an existing location is you if you buy one of Jim's because he has multiple locations?

For the love of God - please stop trying to play consultant!

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Ann Wiggins Noe
VP of Leasing

anoe@highlinecapital.com

Direct line - 720-562-0450

missmojorising

she's basically telling you -- offer them nothing -- unless you have an extra 25 - 45 thousand dollars for this endeavor you can spare...

(hey sal -- do you like my low ball rehab number of 25/45? -- definitely cheaper than a new salon -- ~INEWthatyawould~)

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nlabtec

This is coming from a person that was selling perfect tan beds saying these are great beds when you know these beds suck, and when I posted that these beds suck you deleted it so no one would read it.

Just because you go from forum to forum and see what me or what she post you dont know anything. Read the post over at the other site first, no one ever said danggirl was buying Jims salon. It said where was it located I am opening one out there I can always open another if the location is good. Plus me and danggirl are not the same person thoe she is my wife.

This business is about making money not buying something for 20k and hoping to make 150k. You can get a job and make that period.The business needs to make atleast $300k making atleast 100k profit to be worth buying and then talking to get the buying price for a crazy discounted price even if it mean assuming someones debt.

I already went thru this with my wife when she bought a business for a low price. We moved the location and spend six figures on that, if she wasnt my wife I would of left her out to dry.

No well known business person will buy a business that makes low or no return unless it can make seven figures over time, and I am sure this location can not.

Getting a 25k salon then doing all the upgrades will cost in the long run the samething. People talk so much about dont pay to get a job, but yet want this person to buy a business that is a job?

This is a forum for ideas and thoughts everyone consulting regardless but in no way do I think I am one.

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