Looking at a tanning salonl

[tam]

We are looking at a tanning salon in our home town that is for sale.
It has 8 bed 7 are sunquest pro 26 sx. I am not sure what the other two are. They are newer bed

It has be in business for 10 years. This own has had it for 1 year and he has a lady who runs it. He has put in new bulbs and ballast and painted the salon .

I can not find any info on the beds. Not sure if it is good deal !!!!

Help
tam

[Tanning Queen]

If they pay you for it!

Equipment isnt worth much. You need to look at other things such as:

- How much room is there for growth
- How much AC
- How much electric
- Lease terms on store front
- Lease terms or payments left on beds
- ACTIVE clients in database
- Net gross income
- Contracts they are committed to that you would be responsible for (phone book advertising, etc)
- How many outstanding packages and would you be covering them yourself or would you reduce the offer price by how many are left
- Demographics of the area
- Competition. How close? Equipment they have? Etc
- What is your budget?
- Can you afford to work the salon 24/7 to bring it back to life?
- Do you have 6 mos of bills in the bank to cover the slow season?
- Do you have the capital to invest to make this venture work?


Start with those things and then see how you feel about this salon.

[tam]

What i do know

rent 800.00

power 400.00

phone 70.00

he is asking 30,000.00

he also told us that they had over to 200 clients this year
and that he pays someone to run it. 500.00 a week

Iam not sure about all of this

I will not give him 30,000.00.

What do you know about the beds Sun Quest Po 26 SX

I think that is in a good area and It need some tlc

I need to know something about the beds.


tam

[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!

[Parrot Head]

I think you would do better if he hired you to work the salon for $500 a week. You would make more money that way and not have the headaches. The equipment is worth very little and is there enough electric amp service to be able to upgrade equipment? Ask them for a job.

[Tanning Queen]

200 clients in a year? They have been there 10 years? WALK AWAY!!!!

Unless you get it for $5-10k, it aint worth it.

If you are really still thinking about this, you have more research to do before you give them a dime.

You can run your own demographics of the area to see if you can be successful.

[enuf]

How many salons in that area. If there are any chains walk away. The salon has been in the area for 10 years and he has owned it for 1 yr and only has 200 customers. Not to good.

[phattmatt]

Unless you can up the AC and electrically and get rid of half the equipment and bring in big VHR and HP I wouldnt touch it.

There is no profit in that place unless you want to work it from open to close and half nbo vacation days or no sick days and there be no other employee

[Brian Oshman]

Offer $1,000.00 bucks.

[raynchris]

In my honest opinion, if you're not currently in this business and are trying to get into it. Walk away from this salon.

First of all the #'s don't jive. I bought a salon a year, it was already established for at least 10 yrs and we've already had at least at least 1000 customers.

Second, reading the beds, you already will have to replace 6 of them for bigger units. Bigger units will bring you more money, more clients and more upgrades. People want more than just base beds. Unless they're albino. And then, odds are you will have to upgrade to electric coming in and going out. So roughly at a minimum if you go used and cheap you're looking at another $100,000 with electrical work.

Then your electric bill will go up. Plus you have to figure for any remodeling and/or repairs. Which there will be, there always is. In addition to that, you have to factor in to size of the A/C. If its big enough or will it need to be replaced. I'd say a minimum of a 5 ton A/C unit.

Must add for insurance as well. Roughly $1200 - $2500 depending on your deductibles and liability clauses.

Also, tanning is a very seasonal business. It is also a luxury, beauty business. Which means 2 things. One people don't need to tan, they choose to. As opposed to a fast food joint, people NEED to eat. Second, we hit a slow point every year in which you need to set moneys aside to keep afloat. And we all do, regardless where you are or what you're called. If you don't, then your bills don't get paid. Then guess what ? So if you have a job now, and you're planning on quitting it for this salon, you need to have money bankrolled to cover at least 6 months of your personal bills, plus salon expenses.

If you do insist on buying this salon after all your research. I would find a very good business laywer, one that maybe has dealt with tanning salons, and have him/her right up the contract. Possibly with a backdoor clause. Therefore, if anything goes wrong, you can possibly recoup some or all of your money !

[Brian Oshman]

Well said.

[Beach Bum]

Not a good deal based on the equipment.

Used Sunquest 26 lamp beds are worth pratically nothing. You should be able to buy them use for less than $1.0k each. Plus seven of those beds in a 8/9 bed salon is way too many. 26 lamps beds will not make you any $$$. You may should have 2 or 3 just to cover the bottom feeders.

If the property is decent and the location is good it might be a good deal for $10k or less. But only 200 customers is a big red flag. I don't see how they were able to pay someone $500 a week to run it with only 200 customers and those tanning beds. I doubt the salon generated enough revenue to pay them plus the rest of the expensives. They must had been paying this person out of their own pocket, which is why they are selling.

[solaraz]

Looks like a bad deal to me...

Just like thenewsundeck I haven't been a salon owner very long, coming up on our one year in Nov. But, I have over 1,000 new customers since we opened and I have 7 beds and one Spray Booth. 200 customers in a years time is nothing. Guess it all depends on the demographics but if the salon has been in business for over 10 years and this person has only had it a year it sounds like they got taken when they bought it and are now trying to unload it on someone else.

Just my 2 cents

[JustTans23]

I agree, I've been in business less than a year and we have also had over 1000 customers. Something is a little fishy with that. 200 customers is what you should be doing in a month!

[Glowtanning530]

SOmething isn't right. 200 customers even during slow season a sml salons should be seeing at least that in 5 days during JASON.

I bought an existing that I that I am sure everyone would have said dont do it. You need to look at all the things others have said on here and also be realistic.
I knew I needed to ad a VHR. I knew I needed to also get rid of some of the 28 lamp beds. I probably could have opened from scratch with the money spent but I was able to kinda grow as money allowed and as business grew, but I my salon also wasnt the norm. I didin't have a TON of comp to compete against and I am in town that doesn't even have a starbucks so a chain coming in was highly unlikely I knew I had time to get certain things in order.

[baskinthesuntanning]

Where is this located? How many people are in the town? Did they not advertise or put any extra outside work into the business? 200 clients a year is horrible. We've had almost 1400 clients in less then 11 months our first year.

It seems as if they were definitely not doing something right. If it was me and it was in a decent location i'd think about it. If you could work something out and get rid of 3 or 4 of the beds and get the total price cheaper it might be worth it. I bet the current owner just needs out, so you might be able to get a good deal on it. Plus, the name in a home town might be good with 10 years in business. Just advertise the crap out of it with "new owners" and completely revamp the place and get a couple decent beds.

[RonnieT.]

Customers and sessions are totally different here "Tanning Pro's"...not sure if we are all on the same page. Customer data base should see 900 new per year in a slow salon...and I have seen up to 3000 in better areas. (just my experience) Tanning sessions 7000 - 23000.

Whatever the deal is with this location....I don't believe I would give it much more thought...again just my opinion and experience. 28 lamp home units should be sold...

RonnieT.

[raynchris]

Basically TAM, and please chime in, it doesn't add up. Sometimes salon owners will try to offer you the world in a sale, and then in a year or less, your flat broke and on your @$$.

We don't wish that upon anyone. We're not trying to scare you from this industry, because it is an amazing industry. I think I speak for all of us, when I say we're tryin to protect you and your investments.

If you have enough funding, then sure low ball an offer. 5 - 10 K based just on equipment. But other than that, just hang tight. If this is something you want to do (i.e. buy a salon), something better will come along.

[raynchris]

Oh, also, this is hands down the best informational system on tanning you can find. If you have any questions ask, we may poke some fun, but anything can answered here.

Plus theres an amazing search engine as well. Good Luck !

[SandiGirl]

Maybe it was 200 NEW clients?