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Acceptable price/offer for buying a beauty salon

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Cjd

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Hello fellow geeks

I hope I don't offend with this thread but need some advise .
I have viewed a beauty salon that is for sale priced at £30k.The current owners are not in the beauty business , just own it and have put staff in. It is in a nice village location, has 3 rooms , manicure and reception area.the salon has been there for about a long time but the current owners have had it for about 5years.

Basically they have done nothing with it , no website ,very little external advertising . The only expensive items in the salon are caci machine and st tropez booth and machine. They claim to have a client base of around 85 !!
The turnover is approx £33k with overheads of about £29k

I really want this salon for the following reasons
1. Great location
2. Existing but small client base
3. I KNOW I COULD MAKE THIS WORK.

Can anyone give me a rough idea of to offer for this salon , as I feel the asking price is very very high.

Thanks for your thoughts xx
 

Sharkster

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Get your accountant to look at the books for the last few years and take their advice on a realistic valuation. Don't muck about, leave it to the experts. X
 

Sharkster

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Hold on, sorry just read your message again, so you say turnover of 33k and overheads of 29k per annum, so an annual profit of 4k, wouldn't touch it with a barge pole.

No wonder they are selling.
 

Cjd

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Thanks sharkster

I have a business adviser , and his view is I would only be buying the fixtures and fittings as there is no business to buy.

My offer is going to be based on this and would be about £8k ???.
 

persianista

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Thanks sharkster

I have a business adviser , and his view is I would only be buying the fixtures and fittings as there is no business to buy.

My offer is going to be based on this and would be about £8k ???.
It would cost you more than that to buy your salon a caci machine. They may as well just flog that and the st tropez thing and make that.
It's worth what someone will pay, so if it is a functioning salon it will be worth something to someone.
I would say 3x profit plus 5k for the machines =17k
 

Cjd

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Hi

Don't want the caci machine as they told me they only have 3 clients that have it and they are not regular , they don't even use st tropez as they use another brand so I don't want those machines

That is why my offer is based on the fixtures and fittings minus those machines

I do appreciate all the advise I am getting .
 

stephanie_87

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I agree with Persianista, general rule of thumb is 3x times profit plus fixtures. I don't believe you get a choice what fixtures you want and don't want, it's a going concern so you pay for what is there. I think the only things that arn't taken into consideration for the selling price are products. Good luck with your venture :) xx
 

eternalscot

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I sold mine for £110k in 2003 but that included the property which at the time was worth about £50k. Depends on lease and weather the person owns the property or not, better buying in long run. May be they are not being honest with HMRC and not putting through much cash, how many staff?
 

Cjd

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Hi

Property not for sale , just business. Only 1 member of staff .they are not including caci in the sale .

Many discrepancies in discussions with salon owner , so think they are doing worse than they are telling me .

Thanks again all
 

Pinkpants

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Lol they don't sound like they have a business and you would be doing them a favour by getting them out of the lease !
How long have they got left on lease ?
They obviously running at a big loss !
That's what happens when people enter our industry with no experience or passion and think they will become rich.
 

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