Listing ID: 83943

Business Overview

This is a once in a lifetime opportunity to own two turnkey, high end, established and super profitable tanning salons. These two impressive, high grossing, West Michigan businesses have averaged annual revenues nearly three times the industry average. Remarkably, the owner of this fantastic business spends less than 5 hours each week managing the operation while generating an impressive cash flow each year. At this time, he has decided to sell the two salons to concentrate on both his family and an unrelated fledging business.

Operating out of two attractive locations in desirable Kent County (Michigan) suburbs, the salons include 42 popular late model pieces of equipment including UV beds, bronzing beds, stand up and Versa Spa sunless spray tanning units, and the like. The facilities are super clean and of course regularly sanitized.

An experienced manager has been handling the day to day operations of both stores while the other 10 to 20 part time employees work in both salons and are well trained, loyal and dedicated. In addition to generating over $ 700,000 of gross revenues in 2021, the successful operation has no meaningful competition within a fifteen minute radius of each store.

The tanning salon industry has experienced steady growth the past five years (excluding the 2020 Covid year) and industry experts expect the growth to continue for the foreseeable future. Impressively, revenues for these two operations have rebounded to 95 % of pre Covid (2019) levels. In 2021, net Income increased a remarkable 60% over 2019 (pre Covid) results.

Let’s take a look at the very impressive EBITDA results – In 2021 the EBITDA hit a high water mark of nearly $ 260,000 and has averaged $ 220,000 for the past four years. An attractive EBITDA multiple of 3.0x results in a value price of $ 661,000 (total) for both salons.

The seller is contemplating an asset sale in which he retains cash and the very limited A/R, while retiring all liabilities. The buyer receives the highly valuable goodwill of the business and all of the fixed assets.

For more information on this outstanding business opportunity, please contact Steve Huntley at shuntley@praxisbusinessbrokers.com 616 902 0898

Financial

  • Asking Price: $661,000
  • Cash Flow: N/A
  • Gross Revenue: $700,000
  • EBITDA: $220,000
  • FF&E: N/A
  • Inventory: N/A
  • Inventory Included: N/A
  • Established: 2006

Detailed Information

  • Property Owned or Leased:N/A
  • Property Included:N/A
  • Building Square Footage:N/A
  • Lot Size:N/A
  • Total Number of Employees:10
  • Furniture, Fixtures and Equipment:N/A
About The Facility:

Operating out of two attractive locations in desirable Kent County (Michigan) suburbs.

Additional Info

The business was founded in 2006, making the business 16 years old.

The company has 10+ employees and resides in a building with approx. square footage of N/A sq ft.
The building is leased by the company for $0.00

Why is the Current Owner Selling The Business?

There are all types of reasons why individuals choose to sell companies. Nonetheless, the real factor vs the one they tell you might be 2 entirely different things. As an example, they might say "I have way too many various commitments" or "I am retiring". For numerous sellers, these factors stand. But also, for some, these might simply be excuses to attempt to hide the reality of transforming demographics, increased competitors, recent decrease in incomes, or an array of other factors. This is why it is very important that you not depend entirely on a vendor's word, but instead, utilize the seller's solution along with your overall due diligence. This will repaint a more realistic picture of the business's present situation.

Existing Debts and Future Obligations

If the existing company is in debt, which many businesses are, then you will certainly need to consider this when valuating/preparing your offer. Numerous businesses finance loans in order to cover things like supplies, payroll, accounts payable, and so on. Remember that in some cases this can imply that revenue margins are too small. Lots of companies come under a revolving door of taking on debt as a way to pay back various other loans. Along with debts, there may additionally be future obligations to think about. There may be an outstanding lease on tools or the structure where the business resides. The business might have existing agreements with vendors that have to be satisfied or might lead to fines if terminated early.

Understanding the Customer Base, Competition and Area Demographics

Just how do companies in the area attract brand-new clients? Many times, companies have repeat consumers, which develop the core of their day-to-day profits. Certain variables such as new competition sprouting up around the area, road building, and also personnel turn over can influence repeat customers and also negatively influence future earnings. One important point to consider is the placement of the business. Is it in an extremely trafficked shopping center, or is it concealed from the highway? Undoubtedly, the more people that see the business regularly, the better the possibility to develop a returning customer base. A last idea is the general location demographics. Is the business placed in a densely populated city, or is it situated on the edge of town? Exactly how might the neighborhood median family income influence future revenue potential?