[thenewsundeck]

As I have not been a salon owner very long, I can only give you my pennies worth of advice. There are owners on this forum that will simply amaze you with their knowledge. Here are some of the things I have learned in my short-time of salon ownership:

My first question would be, "Why are you selling after only a year of ownership?"

Electric changes MONTHLY...rent may also change. Is it in a strip mall, stand alone building? Landlord may want to increase the rent if it hasn't changed in 10 years! You may also have CAMM and other charges.

As TQ also advised, out of those 200 clients, how many paid up front for a package? If they did, that money is in the previous owners' hands and you will be tanning them for "free"...so be prepared. Are they on a monthly plan, such as EFT? If so, how much a month do they bring in? How are the EFT's handled? Is it automatic draft, or do they "pay as they go"? Do they use a computer? Do they use client cards? How many NEW clients did they bring in this year? Is that up from last year/or down?

What is the walk-in single session price? Could you increase that price if needed? How may other salons are in the area? What type of tanning equipment do they offer?

Is he paying the "500.00 per week" under the table, or is that person on the books? Is he paying the payroll taxes, etc? If not, you DO NOT want the IRS coming in and taking over...you will have nothing. Was it really 200 or more like 100 clients?

As a new owner, they will not have tax returns yet. Ask for 3 years of tax returns from the PREVIOUS owner to start...get an accountant to look at the numbers, and even then, be careful. Don't get sucked into that "the cash is never claimed" thing some like to tell you. The current owner may have pulled the salon even lower than what it was.

I could be wrong, but I believe it has been previously posted that an existing salon is only worth what the "liquidation" prices of the beds and equipment are worth, i.e., if the salon closed its doors and had to sell the equipment, and what the buyer is willing to pay. Why is the owner selling? If the salon IS profitable, maybe see if they will pay YOU to run it, then you can suggest upgrades, etc to increse the profit. You will still make money, run the salon, but not have the other problems of ownership. Will they even take suggestions on improving the salon, or do they like the way things are? Work there if you can before you buy and see for yourself what goes on. Do you have experience working in a salon? Even if it is "pro bono". Then you will have a better idea of what some of the answers are.

Search the forums here, and you will find a wealth of knowledge. Best advice I can give is DO NOT RUSH, take your time. DO YOUR RESEARCH! Check out the thread "Opening a Salon", and so forth. READ, READ, and then READ some more. Also take notes or print out the ideas you like and dislike.

30,000 seems high, in my opinion. And definitely check out the specs on the building as suggested above. Available electric (how many amps on the panel/single phase or triple phase...etc...for upgrades later), how much A/C...and much more.

Most salons now have beds with 30+ LAMPS (not "bulbs", its a touchy subject here) as their base beds/level 1. The units in place having 26 lamps may need to be replaced. Depends on demographics, what the clients are like...so much more.


Good luck and do your homework!