Please Help

[philly tan]

Can anyone help me. I want to sell my salon and I am trying to figure out what it's worth. It's a modern salon with 8 units, 6 ergoline 240G and 2 sundash 52 stand ups. Units are about 3-5 years old, paid off and in great shape. We also do massage and air bush tanning. The salon does good numbers right now we see between 60-85 people a day and do between $500-750 a day. Last years gross was over $200,000 and this year will be higher. The salon is very well establish and has a very good name, it has won many awards and the staff is great. The reason I ask this is I get approached all the time and asked if I want to sell, now I am considering it and don't know what kind of number to throw out there can anyone help. Thanks

[cfindley]

2.5 times the annual net, plus real estate

[EliteMike]

"The salon does good numbers right now we see between 60-85 people a day and do between $500-750 a day."

I'd be hanging on to that place if that's the case!

[bodyboutique03]

Sounds like you've got a great salon. I agree I'd hang onto it, but if you really want to sell, what I did, was have a real estate agent (a client of mine) tell me what they believe it would be worth on the market. Because, my sales are so low I desperately need an investor to help me during the slow time, or I am going to have to sell, so I asked her to help. I had to give her my last 3 years tax returns, annual expenses, sales, etc, but she gave me a fair enough quote, that if I were to sell, I would have not been left with any debt, and that is what is most important to me. I've not had a paycheck out of here in almost 5 years (because I added tanning to my dayspa), but my rewards have been my clients health and happiness. I refer to myself as an "entremanure". Spellings not right I'm sure, but you get my drift!

[enuf]

1. Someone told me its 1 - 4 gross.

[hisachu]

I just bought one. The price is normally 2 times net + (if buyer is willing) add equipment depreciated value.

If I were the buyer for your store, looking at your numbers and if rent is between 4000-5000, I would pay between $150K-$160K.

[EliteMike]

which depending on your expenses is not worth doing if you are honest about your numbers. Are you absentee or in there every day?

[Brian Oshman]

Standard is 2-2 1/2 times net or 1 times gross plus current value of machines. Realtors have no clue what the value of tanning salons are.

Market value of your beds are around $15,000.00.

If you can get at least $150,000.00 then take it and run.

[sunsally]

Originally Posted by hisachu

I just bought one. The price is normally 2 times net + (if buyer is willing) add equipment depreciated value.

If I were the buyer for your store, looking at your numbers and if rent is between 4000-5000, I would pay between $150K-$160K.

Yes - standard rule of thumb for tanning salons is 1.5-2.5x net, but "standard" and "rule of thumb" are all just that - generalities. At the end of the day, it is worth what someone will pay for it of course!

If you are grossing 200k, with paid off equipment, only 8 units and Philly, I might expect your costs to be about $100K/year. Payroll 36K, Utilities 12K, Rent 25-35K, etc

Given that, as said, if I were selling, I might ask 200K.

If I were BUYING, I'd argue that your equipment is outdated, doesn't have levels, etc

Which you would then again show me the Profit & Loss statement and say "I think this speaks for itself about if this is working"

In the end though, it comes down to how much it is worth it to you not to have it anymore, and how much it is worth to someone else to take it off your hands!

[ljtan]

Buyers today what newer equipment. Dump those 240 ovens
and buy nice used beds. Add in that cost plus some and you
will sell a lot quicker. Those are good numbers for a small salon.