new venture, some advice please.

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lola67

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Hello, I'm after some advice from you all..... Heres the thing:
I've been working in a salon since June, on a rental basis. The owner hasn't been happy for a while and came to me on Sat and said she was selling up and moving away. As she knows I would love to have my own business she has offered it to me :eek:. It's a tanning salon with 2 nail desks and a beauty room, she is selling it as a going concern with all the fixtures, fittings and products......£7k.

Now I know I will have to have a look at the books and see whats what. What about other stuff? Have you guys & gals got any advice to offer?

Having been there for the last 6 months I can see the potential that could be got from it, were it to be in the right hands (namely mine!!:green:) but it is a big step and I would have to borrow the money and re organise everything else in my life.
thanks xx
 

oey

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First things first you need to work out what you are getting for the £7k and you also need to think why the existing clients have been coming to that salon - is the salon busy and if not why not? What is the location of the salon like too? What I would do is get somebody with an independent eye to look over the books and give you their opinion of how viable the business could be.

good luck with what ever you decide
 

Urban Geek

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My first thought would be how much is the rent and rates and how long with the lease be for?

Otherwise it does sound like a good opportunity for you.
 

hippy-chick

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excellent advice so far.

at the end of the day, she is selling you her client list, and her fixtures. You will have to see how much rates, rent and other bits are on top of this.
You may be able to bring that figure down, but I know of someone in my village was selling the building THEN her business on top of that.
 

soriminah

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It's a fantastic opportunity. I'd get an accountant to check the books and see if it's viable and if they give the nod, I'd definately give it a go. You can always sell later if you want out.
 

Beautyandme

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Hi, if you can find out that she isnt selling to start up somewhere else/mobile or from home, and taking the client list with her. Remember this info, wont be given upfront.

If you know you could make a success out of it, go for it. Wishing you all the luck in the world.
 

hippy-chick

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yes as beautyandme said,

get it written into your contract that she can't set up in a radius of xx miles for xx months after selling you her client list.

I KNOW for a fact, the the woman selling her business was going to set up a clinic in her garage. that tells me she would be wanting to take her clients with her.
 

goholistic

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I would advise you seek professional help with the figures. Its a great opportunity but there are so many things to consider when taking on the responsibility and become the sole trader. Sounds a brill opportunity. Though the figures look and sound manageable, a professional in that field will be able to really put down on paper what the proper figures will be.
Can you afford it all if say one or two of your therapists have a change of circumstance and their space becomes avialable for a period of time, can you afford to pay for everything out of your own money whilst you advertise again. Just some little things can put your financial situation in a slight downfall. A good contigency will go a long way too. Thumbs up sounds brill.
Consider all pros and cons and good luck, sounds promising if you can afford to take it on! :)

go-holistic.net - Home
 

hippy-chick

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welcome to geek go holistic xxx
 

goholistic

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thanks :lol: its a nice site! Alot of interesting reading.
 

turkishtart

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7k Is cheap for premisies and fixture and fittings alone usually you pay alot more for the business, think you have a good buy... If salon Isn't making a loss I think your on to a safe bet.

Good luck hun x
 

lola67

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Hi there, thanks for all your replies.
The salon is quite busy on the beds, not so busy with nails & beauty. But I think there is massive potential to build that side of it up, with the right people in there at the right time.
It's in a good spot on a main road, with plenty of passing trade, I think it just needs a bit of TLC (re dec etc) and push the business.
I'm gonna pick up the books from her this week and get someone to have a look at them properly.
linds xx
 

spakitten

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hello,

It definitly sounds like you should give it a go as long as everythings checked out.

You also need to find out what sort of demographic your area is. Are most of your clients young and trendy, middle-age and modern, or older and traditional? This is all very important. You should decide who you want to cater to before you paint or re-do anything (design wise).

Once this is established and all done, all you need to do is advertise. Since the esthetics portion isn't doing well I would advertise that, maybe a few free services? (NOT to friends though). Say your catering to a trendy, younger clientel: High school girls would be perfect to give some free services to since they have no bills to pay, but have expendible income. They will be hooked on their gorgeous new nails and come back again and again.

Hope this all helps! Good luck!
 

lola67

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Hi there, I have some figures to run by you to see what you reckon. I have a profit/loss document but obviously won't go through that with you but just the basics:
It's a 10 year lease and the rent is about £700 a month. Some people I have spoken to think this is too high, but I have no idea of the average rental prices for salons. Then on top of that there is council tax, insurance, bed payment, and of course the utilities water, electric etc. From my calculations all in (inc variables) monthly outgoings are approx £3837 as it stands at the moment. There are, however, areas I could lower it ie. £150 for yellow pages ad, and a bed payment of about £330 which I would probably get rid of.
I know it's only the basics and probably hard to make a judgement, but going on this info what do you guys reckon, in comparison to your salons....
xx
 

Sparklepink

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Hi there, I have some figures to run by you to see what you reckon. I have a profit/loss document but obviously won't go through that with you but just the basics:
It's a 10 year lease and the rent is about £700 a month. Some people I have spoken to think this is too high, but I have no idea of the average rental prices for salons. Then on top of that there is council tax, insurance, bed payment, and of course the utilities water, electric etc. From my calculations all in (inc variables) monthly outgoings are approx £3837 as it stands at the moment. There are, however, areas I could lower it ie. £150 for yellow pages ad, and a bed payment of about £330 which I would probably get rid of.
I know it's only the basics and probably hard to make a judgement, but going on this info what do you guys reckon, in comparison to your salons....
xx
imo the rent is quite high,... remember you need to make the £3837 each month to cover the out goings before you can take a profit or a wage
will you be employing anyone?.,... finding good staff can be hard
again the same come with renting out space

look at how much you take on your own atm?.
will you need to get a business loan to buy the business off the owner?
if so you have to add the loan repayments as well
you have to take in to account how much you need to take to it live on (food/ house bills/ petrol/ etc...) add this in too

is the salon v established?
look at the competition....... do you have many salons near you?....
are there any nss?

can you offer more than just nails, tanning and beauty.... like hairdressing etc...

how big are the premisses? is there room to make it 'your own' does it need updating?

who owns the property you will be leasing?
is it local council owned or owned privately?

you need to also see if there are rent reviews in the contract and if so when these are due.....

from my own experience having your own salon can be lovely and it can give so much freedom and a good income......but it can also be very demanding, demotivating and sometimes even sole distroying... if things dont always go rite

i love my salon and im so glad i made the move from renting but i have over the years faced some real horrors with rent reviews etc... and it can be a big struggle to get staff or renters

you need to look into all the possiblities.... and what mite happen

sorry for all the questions........
but after having my own place for 3 yrs i have learned a few lessons and if id have know when i know now i mite have gone with a different property that wasnt council owned.... (long story!)

hth

Jess
xox
 

hippy-chick

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my friend is sadly letting her place go after nearly 4 years of hard work and sweat.
her figures were similar, but that included some basic wages for apprentices.

she said that her rates kept on being raised, she had to pay 2 lots of water rates.

although she had a fantastic 3 floored town house, I couldn't believe that she had put herself under that much pressure, to be bringing in £750 a week before making a profit, thats hardwork. She didn't dare take a holiday, if she had to take off, she was losing out.

I just don't know if I would sleep at night knowing I had that much pressure on my shoulders.
 

lola67

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thank you both hippy chick and sparkle pink for your comments. I have been thinking and rolling around for days. It is an immense commintment and yes I would have to bring in excess of about £4k a month to make a profit. Looking at the figures I have it isn't doing that well at the moment so I would have to expect to be running at loss for a good few months I reckon.
I still haven't made up my mind as yet, but will let you know when I do.........
thanks again. xx
 

Blue Rose

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Hello lola67,

Starting any kind of business takes commitment and can be very scary. The plus side with buying a going concern is that you have a database of clients to work with as opposed to starting from scratch.

I presume that good records are kept of current & previous clients. If so & you decided to go ahead with the venture, you could write to the clients introducing yourself and offer them some great incentives to come and see you. That's cheaper initially than doing lots of newspaper advertising & statistically you should get a better response rate from poeple who have already been into the salon.

You mention that you would be running at a loss initially but that's business generally. If you worked the existing clients well though, you could recoup your investment in next to no time.

On a cautionary note, I would triple check that she really is moving away - and far away at that. I bought another salon many years ago as a 'going concern'. Turned out she started working from home, taking all the clients with her. As if that wasn't bad enough, the full time therapist left as well, taking her clients with her.

It was written into the contract that she couldn't work within a certain radius etc......didn't stop her though:cry:. Took me 4 years of solicitors letters to get some money back from her. The "*%)^ had the cheek to deny that she was seeing clients, but of course the empty appointment book said otherwise.

Now I don't wish to put you off as it could be a good opportunity. Just make sure she's out of the picture.

Good luck in making your decision.
 

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