Booth Rental Salon with Nice Buildout
Located in Omaha, this salon is listed for an incredible price and is run by a booth rental model. Completely outfitted for 9 stylists; currently at 7 filled spots, spaces rent for $175/week with the seller willing to stay on and rent for a new owner. The salon has been in operation for over 40 years and has been in its current location for over 6 years. This is the perfect opportunity for an owner to become passive after filling all stations.
Ideally situated in a high traffic strip mall, the salon occupies 1,396 sq. ft. and is leased for $2,339 per month. The monthly rent also includes common area maintenance, with the salon in a coveted endcap spot.
Open from Tuesday through Saturday, the stylists are consistently booked out for over one month at any given time. As they have roughly 1,500 clients between them, walk-ins are hard to accommodate. A buyer would be able to seat more clients by fully renting.
Growth also exists in adding manicures and pedicures. A buyer could convert the salon to a commission or salary model to entice younger stylists or share product sales with stylists to encourage more retail revenue.
For only 25% down, a buyer would have a stylish, well-kept salon that is a great passive investment.
- Years in Business: Over 40
- Location: Omaha
- Number of Clients: The salon serves a client base of 1,500
- Booth Rent: Booths currently rented for $175/week - 9 booths total with 7 occupied!
- Lease: $2,339/month – includes CAM; 1,396 sq. ft.
- Reason for Selling: Owner has growing family and would like to no longer manage the business
- Employees: 7 out of 9 Stylists renting booths (The seller is a stylist and would like to stay on after the sale)
- Hours: Tues – Sat 9am to 5pm
- Seller Training Period: Seller is willing to stay on as a stylist
- Growth Opportunities: Add manicurists/pedicurists, rent out all booths; hire more stylists to accommodate walk-ins
- Current Owner’s Responsibilities: Owner is one of the stylists – would stay on as a renter if desired by Buyer
- List Price: $59,000
- 2016 Gross Sales of $119,229
- 2016 Cash Flow of $58,532
- 34% Profit Margin
- $56,000 in Assets included in the purchase:
- Equipment: $54,000 – includes equipment and furniture for 9 stations, towels, washer & dryer
- Inventory: $2,000 in products
- Decades’ old reputation
- Loyal clientele
- Name recognition
*amounts may vary
Pro Forma by Number of Renters
Rent of $175/week:
Below is a pro forma based on the number of renters paying $175/week for booth rental. Please note that this does not include any product sales.
At full capacity, weekly rent of $175 from 9 stylists would equate to yearly income of $75,600. Taking into account yearly expenses of $43,632, an owner would be left with a profit of $31,968.
Based on the above information, the best case scenario for booth rental would be to fully rent all 9 stations at $175/week. To increase profit, rents could be raised to $190/week. This would bring in $82,080 per year, leaving a profit of $38,448.
- Hire more stylists to fill all 9 stations
- A buyer could continue with the booth rental model or convert to a salary/commission style
- Currently the seller receives retail proceeds, but a buyer could incentivize the stylists by sharing commissions with them
- Day Spa Services
- Facials & Facial Treatments
- Makeup Instruction & Application
- Manicures and pedicures
- Valued on a cost-to-create basis, the asking price for this salon is $55,000
- Already established and completely built out, a new owner could easily step in and avoid the cost and headache of starting from scratch
- Equipment and inventory is in place to expand services and to add additional personnel
- Perfect as an investment business or for a stylist looking to expand without having to worry about start-up costs
Purchase Price: $55,000
25%Buyer Down Payment: $13,750
25%Seller Financing: $13,750
50%Bank Loan: $27,500
Seller Financing 5-year term at a rate of 4.50% equals a monthly loan payment of $256.
Bank Loan 8-year term at a rate of 6% equals a monthly loan payment of $361.
After business expenses and annual loan payments, a buyer would retain a net operating income (profit) of $27,189. A 25% down payment of $13,750 results in a 198% return on investment in the first year!
A lender is required to have a minimum 1.5 coverage ratio for any business loans extended. At a proposed Purchase Price of $55,000 with the terms listed above, the coverage ratio is 4.67.
Please note that the decision of whether to extend a loan on any sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available.
Offer Price: $
% Buyer Cash Down at Closing: $
% Seller Carry Back via Promissory Note: $
year term at a rate of %
% of Purchase Price secured by Buyer and Seller
Total Bank Loan Need: $
% of Purchase Price
Desired Loan Type:
Desired Bank Terms: year term at a rate of %
Total Business Assets, Inventory, and A/R: $
Total Undercollateralized Loan: $
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Fixed Charge Coverage Ratio
The bank will require a minimum ratio of 1.5 to be lendable.
2017 Cash Flow
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Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
2017 Cash Flow
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Buyer's Return on Investment (ROI)
The rate of return on the Buyer's down payment.
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Omaha, NE 68114
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