going to buy a distressed salon

[SandiGirl]

Brian's your guy to talk to about electrical and what you'd need if you wanted to expand or swap out some beds. Because if it's at it's max, you can't put any big beds in and can't kick ass as a salon....more bargaining. He'll pay you to take it off his hands.

[Tanning Queen]

Look, a typical salon needs alot of AC and electric. If it will be a successful salon, there is NO way he will include electric in the rent. How can you know what your portion is? It needs to be on a separate meter.

This is just odd. I dont care how little money he sells it for, I would be scared of it. I really would be nervous dumping money into a place that doesnt have separate utilites and has a P&L like that one. The whole thing doesnt make sense.

But, since you feel like this is such a great place, how about some more homework?

What are the demographics of the area? Up to a 5 mi radius?
What are the other stores in the location? In the area?
How close is the competition? What equip do they have? Prices? How long have they been there?
What is your budget? How much money do you have? Do you have enough money to pay your personal bills and the salon bills for at least 6 mos if not a dime comes in?
Do you have a full time job?
Are you going to work the salon full time?

This is just a start of things to think about.

[SandiGirl]

Originally Posted by Tanning Queen

Look, a typical salon needs alot of AC and electric. If it will be a successful salon, there is NO way he will include electric in the rent. How can you know what your portion is? It needs to be on a separate meter.

Not hiii38's problem is it? Included means included.

[SandiGirl]

Oh yes, what are they charging at this salon for packages?

[Tanning Queen]

That is why it concerns me. If he starts makin money and being busy, that electric will go up. The landlord will turn around and charge way more than he is payin for rent now and can cause all kinds of problems. It is all just too shady for me. Really. I dont know why anyone thinks this is a good deal.

[SandiGirl]

So he signs a lease for set amounts. Done deal. Or he can say I'll pay you $750 because I think there will be an increase. Sounds fair.

[SandiGirl]

Or just ask 'what if' the bill goes up. See what the landlord is willing to do to seal this deal.

[hiii98]

once you sign a lease you cannot be forced to pay more money just because he doesnt like his utility bill... I'm in the rental business and the lease would clearly state electricity is include, as well as standing in a court of law.

What are the demographics of the area? Up to a 5 mi radius?
alot of residental complexes, duplex, apartments, close to major road.

What are the other stores in the location? In the area?
There is another store 5 miles away which only has 4-5 beds and looks weak in my opinion. I would not consider it competition.

How close is the competition? What equip do they have? Prices?
dunno dont care, i will take their customers

How long have they been there?
10 years for the competion, 3 years for this business.

What is your budget? How much money do you have?
as much as i need. but i'd like to play with the 35k towards the business. i have up to 100k more if needed.

Do you have enough money to pay your personal bills and the salon bills for at least 6 mos if not a dime comes in?
yep

Do you have a full time job?
Nope, financially set.

Are you going to work the salon full time?

Yes

[Wicked1]

If you take over what work is needed to be done ...

[Tanning Queen]

Come up with REAL demographics. Not just what you see around the neighborhood. How many white people? How many age 24-35? How many women? Median income? How many cars drive by the center on a daily basis? Etc.

I know he cant raise there rent or change the terms but that doenst mean he will abide by the contract. He can "constructively evict" you by forcing you out. Very simple, he can screw things up royally for you and that is somethign you dont want. Not when you invest so much into a business.

Now, anyone that has beds will be your competition. Obviously the other salon is doing ok since they have been there 10 years. You wont take their all of their clients, but will get some. BUT, if they have deep pockets, they may reinvest and blow your failing salon away. Consider them when you design your salon.

The main thing is, do the demographics support a salon in the area?

And just to comment on something you said earlier. THis is NOT a get rich quick industry nor is it at all easy. Big money is not something that is seen very often in this industry. There are many successful salons out there but really successful ones are far and few between. This is a strange industry that has 3 mos of busy season and the rest you are struggling to get people in. Clients wont tan if it is cold out, if it rains, etc. Summer? They go to the beach or the lake. Every weekend you are dead. Pray for rainy summers. If it doesnt warm up in by april? You are screwed. You only have may and june to make the money.

I remember one year it warmed up finally by May. Still died off by mid June. Normally season starts in Feb. That was a tough year of dipping into savings to survive.

Ever think about a different industry? There are many other stores out there that produce a more steady income and arent fighting the media every day that theya re gonna kill everyone. LOL!

[hiii98]

so the majority of you guys are not making at least 50k a year? I find that doubtful.

[Tanning Queen]

You want to work open to close, 7 days a week for $50k? ANd you want to BUY your $50k a year job for $35k+ upgrades and investments?

From the numbers you gave, you wont make that with this salon. YOu dont even know the equipment type.

You would make more money in RE. And it is more stable.

[EliteMike]

Originally Posted by hiii98

so the majority of you guys are not making at least 50k a year? I find that doubtful.

Spoken like someone that needs to do a lot more research.

[Tanning Queen]

Which is it?

There are a total of 8 beds and the entire place looks great

or

8 beds 3 standup

Are they 100 watt beds? 160 watt? facials? age?

HOw did they buy them if the salon is 3 years old? Did the old owners bail out and run? If so, there might be leins against the equipment that you dont know about. I know a salon that closed in OH and the new owners opened up with the equipment that was left and now there is a lawsuit going since they werent paid off yet.

[Tanning Queen]

ANd he only wants to offer you a 1 year lease? How much are you going to invest in a place that you are guranteed to have for only 1 year? What if he decides he doesnt want to rent to you next year? OR raises the rent to $2500 a month? Can you afford that? You want a 5 year lease with right of first refusal.

[Tanning Queen]

Did you run or OWN 5 other successful businesses? Because I just dont see how you have a great business sense if you are ready to buy this dump based on that P&L? Most business owners would want more info and if they didnt get it, run like hell from this place.

500+ "active accounts" doesnt mean diddly. LIke Sandi said, it could be 1 session left from 3 years ago. Could be 20 of their friends and family that dont pay. $187 in CC for ONE day doesnt mean diddly either. Why wouldnt you ask for a full months reciepts? Maybe he just had a decent day with CC? (NOT that $187 is decent at all!). Maybe that is ALL he made that day!

Your research scares me. You sound like a newbie that wont listen to the veterans who have been there done that and are telling you the truth. But, I am sure you know what you are doing more than we do. Go for it. SOunds like a GREAT salon.

[hiii98]

ahaha you should see some of the bomb foreclosures i have bought in the past and turned around for a healthy profit. Or some of the unique fields i have hopped into knowing a thing,yet again turning around for a killing. Do you know me??? No. Have i falsely claimed to be an expert in this field? Some people are natural entrepreneurs regardless of what business they adopt.

Have you seen the salon? No how the hell would you know if its great or not? By some scammy P&L where the landlord is hiding is profits into with crooked numbers? You have no idea my situation nor have you seen the salon, i didn't come on here asking for your "opinion" i came on asking for negotiating advice. Thats it.

If your not making lat least 50k perhaps you should spend less time moderating and more time in your salon...

[hiii98]

Spoken like someone that needs to do a lot more research.

that means what? The typical decent tanning salon honestly makes little to no money? or you just dont like me, and are throwing out some random asinine comment?

[tuscantan]

Originally Posted by hiii98

that means what? The typical decent tanning salon honestly makes little to no money? or you just dont like me, and are throwing out some random asinine comment?

Yes...I have been opened for 1 month and the money I "made" is zero when all is said and done. There is a lot more cost into this that what you think. I know that the veterans you think are being hard on you but they know what they are talking about. Take their advice for what it is and not so personal.

[hiii98]

i dont mind at all making no money for a while... hell if your not used to that you shouldnt be in business. However in a few years from now after i build the business up i expect to do fairly decent.

Once again i EXPECT to make nothing initially...anyone who owns a business needs to recognize this beforehand.

Thanks for your advice Tuscantan