zrealtor

I've been considering and researching the tanning industry for the last 5 or 6 months and have found a salon in my area that is for sale. I've been to look at the place and see great potential but I'm pretty sure that's all this salon is, potential.

There are 2 other salons in the area - a booming salon that has just expanded business into a community about 10 miles away and the other seems to be struggling. This particular salon I'm considering is pretty much in the middle.

Is this a venture I should pass on? Are there questions I should be sure to ask the owner? Any signs that it's not a good move?

I'd be very appreciative of any advice that I'm offered.

Thanks.


Also, I've researched the Smart Tan conference. I think the topics this year's conference is covering would really help this salon I'm looking to buy. What are ya'lls thoughts on the conference?

engfant

depends. What does the place gross a year and is that number enough to fit your budget?

If the place takes in $30K gross and costs $40K just to stay open then you should rethink unless you have cash to burn and a million dollar idea.

If it's $60K and $40K to run then you already know the place is going to at least make enough to cover it's costs before you get to your costs of living.

A million dollar place that makes $0 is worth less than a run down landmark that makes a ton of money.

__________________
"And shut your mouth pussycat e fammi un macchiato, pronto!"

http://www.youtube.com/watch?v=UhHhXukovMU

zrealtor

This guy reports that the salon had a net profit of $20k last year with 2 employees and him never working. He owns 2 other businesses and combines all the businesses together in regards to banking and for tax purposes. I'm not sure if this is something that I should watch out for because I'm not sure how they actually determine what business is profiting and what business is not. This has also made it difficult to obtain numbers (such as the gross income). He provided the net income and the assets and inventory worth. His bookkeeper will be available next week to provide the information I requested to seek financing with. He provided a worksheet from last year and this year that showed that the business was bringing in more money and had more clients but I'm not sure if this can be altered.

My girlfriend and I plan to work the salon so that will eliminate a payroll for a while.

I will provide a list of the beds he has in a little while to see what ya'lls opinions of the equipment are.

This is my first business venture so, I would appreciate any kind of advise or opinions.

Woodlands

I took over a salon that I've been going to for 4+ years. It's been losing money (not an immense amount but still) strictly from owner neglect. They even stayed closed Dec-Mar! I mean CLOSED. Crazy. So I've gotten in there and I'm replacing lamps, running specials, bringing in some new things, getting airbrushing back (they haven't airbrushed anyone in 4 years), etc. If the potential is there, and you have A LOT OF TIME AND MONEY to throw towards it, sit down and crunch the numbers.

Coincidentally one of the 3 salons in town closed right after I bought so now there are just two of us. Either a good sign or a REALLY, REALLY BAD sign!! It was a crappy place though. I'm trying to be DIFFERENT from the competing salon - different decor, their owner is hardly ever there, more "extras", etc. We'll see.........

zrealtor

Wow! I really see in this salon what you did in yours. My girlfriend, sister, and mom used to tan at this salon about 1 1/2 to 2 years ago but the current owner made them feel awkward so they switched salons. My sister and mom also tanned here before this owner and really enjoyed those owners and the beds. All 3 of them said the beds are good but the service steered them elsewhere.

Here's a list of the beds: (I think more detail is needed which I'm trying to obtain but this is what I've been given so far)
1 - Ergoline Classic 600
1 - Uwe Lotus
1 - Sundome Standup
1 - Solaris Speed System
3 - Tropical Series
5 - Sunvision 24sf
2 - Sunvision 24s


Additional advise and opinions still appreciated. :)

zrealtor

Still no remarks concerning the Smart Tan conference? We really want to learn anything that will help our business and if this is something that will benefit us and our salon, we will make any arrangements necessary to attend.

Thanks for the responses that have been made so far but please keep them coming.

irene

Smart tan certification is definitely a must... you can get in on dvd and test all your future employees... I find the conventions have changed alot over the 15 years I've been at it. By the PM I received from you earlier you obviuosly know how to do your research...

zrealtor

Wow! I feel this salon is in the same situation. We will continue our research to make sure all it needs is a revamp but thank you for your input.

zrealtor

We have discussed this certification, as well as, the NTTI, or both. A local salon certifies through NTTI so, I'm sure what one's the best to go with or try doing both to reiterate that we believe in education about tanning. How do you think the conventions have changed? By the way, thank you for your response.

engfant

"This guy reports that the salon had a net profit of $20k last year with 2 employees and him never working. He owns 2 other businesses and combines all the businesses together in regards to banking and for tax purposes."

See, my problem is that this tells you nothing. You need actual GROSS REVENUE of this place. What it took in TOTAL. You don't care about what the owner isn't paying for to come to this profit. If it needs $20K in tanning lamps/beds/repairs then there's really no profit.

But that's all small talk cause it's all about what the salon is list price is. If it's $100K then run for the hills. If it's $20K then you have something there.

__________________
"And shut your mouth pussycat e fammi un macchiato, pronto!"

http://www.youtube.com/watch?v=UhHhXukovMU