Business Overview

The shop has been in business for over 10 years, over the years they have provided their clients with quality service, and they have established a large customer base. The salons offer a relaxing ambiance. The open concept space is modern and inviting. All the stores are located at high traffic shopping centers that allow for plenty of parking.

Financial

  • Asking Price: $599,000
  • Cash Flow: $214,586
  • Gross Revenue: $1,201,367
  • EBITDA: N/A
  • FF&E: N/A
  • Inventory: N/A
  • Inventory Included: N/A
  • Established: N/A

Why is the Current Owner Selling The Business?

There are all types of reasons why individuals choose to sell companies. However, the real reason vs the one they tell you may be 2 absolutely different things. For instance, they may state "I have way too many various responsibilities" or "I am retiring". For numerous sellers, these reasons are valid. But also, for some, these may simply be excuses to attempt to conceal the reality of transforming demographics, increased competition, current decrease in earnings, or a variety of various other factors. This is why it is really crucial that you not rely absolutely on a seller's word, yet rather, use the vendor's solution together with your total due diligence. This will repaint an extra realistic image of the business's present scenario.

Existing Debts and Future Obligations

If the current entity is in debt, which lots of companies are, then you will need to consider this when valuating/preparing your offer. Numerous companies borrow money in order to cover items like stock, payroll, accounts payable, so on and so forth. Remember that sometimes this can mean that profit margins are too small. Many businesses fall under a revolving door of taking on debt as a way to pay back various other loans. In addition to debts, there may also be future commitments to think about. There may be an outstanding lease on tools or the building where the business resides. The business may have existing agreements with suppliers that need to be met or might lead to penalties if terminated early.

Understanding the Customer Base, Competition and Area Demographics

Exactly how do operating businesses in the area draw in brand-new consumers? Most times, businesses have repeat consumers, which create the core of their day-to-day profits. Particular variables such as brand-new competitors sprouting up around the area, roadway building, and personnel turnover can affect repeat customers as well as negatively impact future profits. One essential point to take into consideration is the area of the business. Is it in an extremely trafficked shopping center, or is it concealed from the main road? Clearly, the more people that see the business often, the higher the possibility to build a returning client base. A final idea is the basic location demographics. Is the business situated in a largely populated city, or is it situated on the outskirts of town? Just how might the local mean home income influence future earnings prospects?