Business For Sale: Maryland Day Spa
The business: Looking to pamper your bottom line? Then combine business with pleasure at this full-service skin and body-care salon. It offers a wide selection of services (such as facials, body massages, and wraps) to an upscale clientele. The 2,400-square-foot spa, located in metro D.C., draws its revenues mostly from repeat customers and word-of-mouth referrals. The owner describes her salon as "more paramedic than cosmetic," but don't let the powder-puff philosophizing scare you off. The 25-year-old salon has a great local reputation and a solid revenue base, with 30% of sales coming from a high-quality, customized product line. The spa's assets include about $75,000 worth of furniture, fixtures, and equipment. (And we're not talking about tweezers, since staffers use high-end diagnostic tools.) The facility is secured under a multiyear lease, and the landlord has indicated that he's eager to extend it. The owner is selling so that she can hit the lecture circuit; her staff of 17, mostly independent contractors, should stick around for that next glycolic peel.
Price: $195,000 (plus the value of inventory, at wholesale cost)
Outlook: Beauty may be in the eye of the beholder, but the allure of affordable-luxury businesses such as day spas and beauty salons is positively irresistible. For a new buyer looking for growth, an aggressive advertising campaign would be as natural as a mud wrap. Other options worth considering include broadening the service mix, negotiating package deals with local hotels, and even opening additional facilities.
Price rationale: What could be lovelier than a well-priced deal? And this one is glowing. After all, if a buyer put $65,000 down and borrowed the rest (assuming likely terms of 10% interest on a five-year note), the company's EBITDA (see Financials box, at left) would cover the annual financing costs of a little more than $30,000. But if the new buyer doesn't ratchet up revenues and earnings, that won't leave much for owner's compensation, whether it takes the form of a paycheck or an earnings distribution. (The current owner takes the latter.) So you may want to negotiate for a lower price tag -- or at least get inventory included in the deal.
Pros: A picture-perfect location, a loyal customer base, and an upscale product line should position a new owner to blast way past that $400,000 revenue threshold.
Cons: If you're not prepared to make over the marketing scheme and overall growth strategy, you'd probably be better off sending yourself to a spa instead.
|Gross revenues||EBITDA*|| Owner's |
*Earnings before interest, taxes, depreciation, and amortization.
**Owner takes earnings distributions instead of a salary.
Inc. has no stake in the sale of the business featured. The magazine cannot confirm the accuracy of financial or other information offered by the seller. Inquiries should be directed to Marc Dosik at VR Business Brokers, at 301-596-1506.
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