Opportunities
Stunning Salon in Downtown Omaha
Sold
Over 40 years of providing excellent high-end services and ready to grow!
Specifications
This stunning salon is a diamond of an opportunity for a buyer looking to acquire a business with incredible growth potential at a reasonable price. This well established and well-known salon is located in a highly desirable area of Omaha, Nebraska. With a high volume of walking and drive-by traffic, this area is highly sought after for new and established businesses alike.
The beautiful build-out has 9 stations for stylists and 4 sinks with space for an additional sink for future expansion. There are 2 make-up stations and one room available for use by an esthetician or massage therapist. Also in this space is a nail room, processing room, and a space for a washer and dryer.
Known for its exceptionally high quality of salon services as well as cheerful customer service, this business has built a loyal client base. Clients of this salon come from diverse backgrounds and from all areas of town. Because of its location, this business gets frequent out-of-town customers and several regularly returning clients who schedule their appointments around their trips to the city.
This business also sells high-end hair care products not available in most salons. Information on this product line is available in the Qualified document.
Business Highlights
- Established: 40+ years in business
- Location: Omaha, Nebraska
- Clients: High-end clientele, walk-ins
- Services: Cut, color, waxing, deep conditioning
- Building: 2,200 sq. ft.
- Reason for Selling: Focus on family
- Employees: 1 (booth rental) with room for 7 additional stylists, 1 esthetician or massage therapist
- Seller Training Period: Owner would like to stay on and continue as stylist
- Growth Opportunities: Add stylists, add esthetician or massage therapist, advertise, add online booking, expand hours
- Current Owner’s Responsibilities: Stylist
Financial Highlights
- List Price: $110,000
- Gross Sales:
- 2017: $187,758
- 2016: $163,203
- 2015: $174,618
- Cash Flow:
- 2017: $43,712
- 2016: $53,908
- 2015: $56,420
- Assets Included in Purchase*
- Equipment: $86,400: 9 stations, 4 sinks, 2 make-up stations, 1 esthetician/massage room, processing room
- Intangible Assets: Outstanding location with a high level of referrals, great reputation, excellent references, high-end clientele
- Inventory: $4,895 High-end hair products
*amounts may vary
Cash Flow Analysis
| Description of Financial Statement | P&L Statement | Tax Return | Tax Return | Notes |
| 2017 | 2016 | 2015 | ||
| GROSS SALES | $186,758 | $163,203 | $174,618 | |
| Net Income Shown on Financial Statement | $38,789 | $31,641 | $23,747 | |
| ADDBACKS | ||||
| Compensation to Owner | $0 | $15,625 | $25,000 | |
| 11% Tax on total W2 Salaries | $0 | $1,719 | $2,750 | |
| Depreciation | $0 | $0 | $0 | |
| Amortization | $3,723 | $3,723 | $3,723 | |
| Non-Business Telephone | $1,200 | $1,200 | $1,200 | Personal lines $200/month |
| TOTAL ADDBACKS | $4,923 | $22,267 | $32,673 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $43,712 | $53,908 | $56,420 | |
| Profit Margin | 23.41 % | 33.03 % | 32.31 % |
- The owners decided to focus on family and reduced hours and staff. This business has a proven potential for growth and the ability to maintain a higher volume of customers.
Typical Clients
- High-end clientele
- All ages
- Many professional clients
- Typically a female clientele
- Loyal client base
- University students
- Many out-of-town clients
- Solid returning client base at 90%
Services
- Cut
- Color
- Waxing
- Deep conditioning
- Styling
- Wedding services
- Make-up
Growth Opportunities
- Add stylists
- 1 stylist in addition to the owner, room for 7 more
- Add esthetician or massage therapist
- One room perfect for either service
- Advertise
- Currently no advertising is done
- Add online booking
- Expand hours
Valuation Details
The Firm Business Brokerage used a Cash Flow Valuation methodology to determine the Purchase Price of the business.
The formula used is as follows:
Cash Flow x Prescribed Multiple = Fair Market Value
Cash Flow is the sum of business net income plus any owner perks and any non-onward going expenses.
A multiple is prescribed by a 20 question, 100-point parameter ranking system that is used to analyze the current business health. Each question is based on a scale from 1 to 5: 1 being low, 2 below average, 3 average, 4 above average, 5 high. The average of the responses sum is the business’ prescribed multiple.
For this business, a 2017 Cash Flow was used with a prescribed multiple is 2.55. With this information, the computation is as follows:
$43,712 x 2.55 = $111,466
The Fair Market Value found above positions the business List Price at $110,000.
Funding Example
Purchase Price: $110,000
25%Buyer Down Payment: $27,500
25%Seller Financing: $27,500
50%Bank Loan: $55,000
Seller Financing 5-year term at a rate of 4.50% equals a monthly loan payment of $513.
Bank Loan 7-year term at a rate of 6% equals a monthly loan payment of $803.
After business expenses and loan payments, a buyer with a 25% down payment of $27,500 would retain a profit of $27,918, which results in a 102% 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 $110,000 with the terms listed above, the coverage ratio is 2.77.
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.
Print, sign and send to:
210 N 78th St. 2nd FloorOmaha, NE 68114
Or fax to:
f 402.939.0857