Location of the salon
Posted: Wed Jan 22, 2025 3:13 am
The main risk associated with the location of a beauty salon is the possible loss of the benefits that this location provides if something suddenly changes.
Be sure to find out how long the current salon lease agreements are valid, how they can be extended in the future, whether any guarantees are required from the tenant. Also inquire about the development prospects of the area and surrounding areas, whether there is a possibility of changes in transport routes, development, etc.
Ashland Oil
Source: shutterstock.com
Let's take a practical example . The uses of twitter owner of a small restaurant, quite successful, decided to sell his business because his life plans had changed. He rented premises for the restaurant on very favorable terms, since he was a distant relative of the landlord. The location was convenient and crowded. The buyer was given the current lease agreement and verbally confirmed the amount of payments, but was not told that after the expiration of this agreement the rent could be raised.
After four months, this contract had to be renewed, but the business broker advising the buyer offered in advance (even before the purchase of the restaurant) to extend the lease for the entire period that would be needed to recoup the costs of acquiring the business. The landlord refused, and the purchase of the restaurant fell through. But the next buyer was not so prudent and fell into the trap: he bought the enterprise and was faced with a sharp increase in rent payments. This undermined his business, and after six months the restaurant was put up for sale again - this time for much less.
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How to get 3 times more clients for 2 times less
Competitors - current and potential
In some industries, the previous owners of the company may become serious competitors for their former brainchild when it passes to a new owner. In addition, new strong players on the market may appear on their own, and existing rivals may increase pressure on your company (through dumping, collusion with the authorities, additional financial investments, etc.).
Therefore, when considering the purchase of a particular beauty salon, be sure to find out how the prices for its services have changed and what happened to the prices of competitors at that time. Analyze the market situation for the emergence of new aggressive players. Inquire about the company's relationships with third parties and local authorities, whether there were any conflicts (and whether the case went to court). Try to get a guarantee from the salon seller that he will not compete with you.
One real case is illustrative in this regard . A businessman bought a hotel in a residential area of one of the cities - industrial centers of the country. Over the past three years, the enterprise showed a high level of average occupancy and stable financial flows. Everything changed a year after the change of ownership: a large hotel chain opened its hotel complex in this city, equipped with the latest technology. It is not easy to open an enterprise, actively develop a new facility, invest in its advertising. As a result, a small hotel was effectively forced out of the market: its occupancy rate fell by more than 40%. All this could have been avoided if the buyer of the business had inquired about possible competitors: it would have immediately become clear why the previous owner suddenly decided to sell the hotel.
Be sure to find out how long the current salon lease agreements are valid, how they can be extended in the future, whether any guarantees are required from the tenant. Also inquire about the development prospects of the area and surrounding areas, whether there is a possibility of changes in transport routes, development, etc.
Ashland Oil
Source: shutterstock.com
Let's take a practical example . The uses of twitter owner of a small restaurant, quite successful, decided to sell his business because his life plans had changed. He rented premises for the restaurant on very favorable terms, since he was a distant relative of the landlord. The location was convenient and crowded. The buyer was given the current lease agreement and verbally confirmed the amount of payments, but was not told that after the expiration of this agreement the rent could be raised.
After four months, this contract had to be renewed, but the business broker advising the buyer offered in advance (even before the purchase of the restaurant) to extend the lease for the entire period that would be needed to recoup the costs of acquiring the business. The landlord refused, and the purchase of the restaurant fell through. But the next buyer was not so prudent and fell into the trap: he bought the enterprise and was faced with a sharp increase in rent payments. This undermined his business, and after six months the restaurant was put up for sale again - this time for much less.
Recommended articles on this topic:
Company Marketing Plan: Double the Company's Profits
KPI for the sales department: how to calculate and implement
How to get 3 times more clients for 2 times less
Competitors - current and potential
In some industries, the previous owners of the company may become serious competitors for their former brainchild when it passes to a new owner. In addition, new strong players on the market may appear on their own, and existing rivals may increase pressure on your company (through dumping, collusion with the authorities, additional financial investments, etc.).
Therefore, when considering the purchase of a particular beauty salon, be sure to find out how the prices for its services have changed and what happened to the prices of competitors at that time. Analyze the market situation for the emergence of new aggressive players. Inquire about the company's relationships with third parties and local authorities, whether there were any conflicts (and whether the case went to court). Try to get a guarantee from the salon seller that he will not compete with you.
One real case is illustrative in this regard . A businessman bought a hotel in a residential area of one of the cities - industrial centers of the country. Over the past three years, the enterprise showed a high level of average occupancy and stable financial flows. Everything changed a year after the change of ownership: a large hotel chain opened its hotel complex in this city, equipped with the latest technology. It is not easy to open an enterprise, actively develop a new facility, invest in its advertising. As a result, a small hotel was effectively forced out of the market: its occupancy rate fell by more than 40%. All this could have been avoided if the buyer of the business had inquired about possible competitors: it would have immediately become clear why the previous owner suddenly decided to sell the hotel.