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    8 Replies Latest reply on May 14, 2008 6:04 PM by FCPainter

    WOW, Where to start.  Need a loan, I do know that much!

    Sako7STW Newbie
      Hello, My name is Todd. My wife and I are currently making some huge moves in business. Here is the scoop. We currently own a smaller beauty salon. It has four stations and 1 station for a nail tech. We have agreed to buy another much larger salon here in town. With getting the new salon we are buying the building so we will no longer be renting. The new salon has 1 more station than our current location BUT has 6 tanning beds as well. In addition to the tanning it has a room that is now empty that has been used in the past for a massage room and also spray tanning. We have decided to put in one of the new Aqua-Massage beds in that room. The salon is located on the first floor and is about 3000 sqft. This is a business that has been here for a long time and has as good of a reputation as one gets in town. The reason we got it is because the current owner is 67 and ready to retire. Because of my wife's awesome reputation, he approached us before anyone in town and it never went any farther than that.

      So here is the really exciting part. The salon as I said is 3000 sqft on the main level and the upper level is also 3000sqft. and wide open space just begging to be used. We have decided that our community needs a fitness facility. We have been looking into this for about 6 months now and trying to get everything put together.

      We need funding for the remodeling of the gym level, a few modifications to the main level for access. and the gym equipment. the part that makes this opportunity unique is basically the gym will have no rent. The salon pays for the building and is profitable as is by itself and will be in a sense, a financial backer to the gym. Due to the lack of rent this should afford us the ability to invest in top-of-the-line equipment that will entice customers to join and give them the most effective and safest workouts available today. I believe that just because we live in a smaller community, we don't have to live in the past.

      The gym will have only the costs associated with construction, equipment, insurance, and add a little more to the utility bills. Depending on where our monthly payment falls, we will only need 30-45 memberships to cover those bills completely. Our target membership is 250 and max will be 400 as a 3000 sqft facility wont support more than that. Because of the advantage of lower bills, we feel we really have a great opportunity on had. Can you say cha-ching?? We feel as well, the gym will benifit the salon with the added traffic and visa-versa. With the salon having tanning and massage, we will be offering package deals where members can get more benifits than just a gym membership. Our only competition is the city recreation center that has limited equipment that is far outdated. Patrons are also limited to thier hours, but with our gym, it is 24hr. accessable. On top of that the cities only health food store is our next door neighbor to the salon as it is located in a small but nice strip mall.

      We have a very good start on our busness plan and awaiting on a few more bids to come in to finish the plan. The thing is we feel we need some places to send the plan to. We have been working with our local SBA center but want to look at all options before we jump one way or another. We have a good amount of down payment saved up that originally was to go to the salon deal, but were thinking maybe it would be better to finance more of the whole deal (gym and salon down payment) so we can start the gym right away than to give the down to the current owner/financier and then have to save yet again for further down money and do the gym. Thus we would run the risk of someone else beating us to the punch and open a gym. As of right now we are looking to need in the 200K range and looking to go 10yrs on financing.

      We would love to hear any and all suggestions that could help us out.

       

      Thank you for your time and consideration!
        • Re: WOW, Where to start.  Need a loan, I do know that much!
          dublincpa Scout
          Kudos. That is a really ambitious plan and I wish you good luck.

          If you are interested in receiving help analyzing the numbers to see where capital and financing might be best allocated, feel free to email me at dublincpa@gmail.com. No charge, no sales pitch, just a little helping hand. I am a CPA in Illinois. One of my areas of focus is on the purchases and sales of small businesses and other transactions significant to small businesses. I recently did this for another member of this board. I believe that they were able to incorporate a number of my suggestions into their proposal.

          Again, good luck.
          1 of 1 people found this helpful
          • Re: WOW, Where to start.  Need a loan, I do know that much!
            LUCKIEST Guide
            *WOW, Where to start, Welcome to this web site. Having never been t*o* **Evanston,
            Wyoming,*
            it sounds like a great move on paper. Have you identified the population.
            *You said that "*Our only competition is the city recreation center".
            Also "
            We have a very good start on our busness plan". Every bank and investor will want to
            to see the Bus Plan. Included in the plan should be "Cash Flow".
            You also said that you are working with your local SBA. Does that include SCORE??
            SCORE is FREE and very helpful.
            Best of luck, LUCKIEST
              • Re: WOW, Where to start.  Need a loan, I do know that much!
                Sako7STW Newbie
                Luckiest,

                The population is diverse in a way because there is many small communities in the area, kinda like mini supburbs. So the figure most business go off of in the area is 25000 people. In the fitness industry, for this type of gym and the type of population we are in, the "experts" have said to figure on 1 - 2% of your population as those that will have memberships to fitness facilities besides the community center. That puts it in the 250 - 500 people range. With us being the only game in town we should have 100% of that population. Then you figure 10-15% of your total floor square footage for the figure you should use for the amount of members you can support. That puts us again 300 - 450 people. We have used the figure of 250 people in our plan to stay on the somewhat conservative side. With 60 sighning up in the first month then 30 to follow each month till we reach maximum capacity is our goal.

                I think this is very possible as I come from a 10 year background in professional sales. I have developed a very aggressive marketing plan that includes networking in the school districts. I plan on approaching businesses to offer them "deals" they can offer thier employee's as both incintive plans and bennifits to help thier workforce to become more fit and healthy thus reducing thier medical expenses. None of our Hotels/Motels have fitness facilities either, so I plan to approach them to buy a number of memberships, give them access cards, and thier patrons can now have the benefit of access to a 24 hour state of the art fitness facility. They can even use it in thier advertising. Just to name a few.

                As for "Cash Flow" that wont be a problem. I hesitate to put any financial figures on here being public. The salon is very profitable for one and I also work in the oil field working a 5 days on 5 off 12 hour shift schedule. I do very well in my job and that is our backup cash flow to both the salon and gym. In our business plan so far, going off of estimates of course, between the gym and Salon, we anticipate a 60% or better proffit margin. By that I mean the income in our pocket after all business expenses paid. So to keep it simple say we earn $100.00. Our expenses were $40.00. We walk home with $60.00. Make sense (we keep things simple in WY LOL)?

                I have not heard of SCORE. By SBA I should of said the State of Wyoming Small Business Developement Center. They are a state funded entity that's whole purpose is to help people develope business plans and get the financing they need. Then they also help you build your business after you get it going. This is all free as well.

                I am a planner to the bone so i like to look at as many possibilities as possible before I jump, so thats how I found this site.

                I hope this gives a little better idea as to what we are doing. Basically I hopeing to find some lenders/investors that would be interested in funding this project so I can consider all alternatives.
              • Re: WOW, Where to start.  Need a loan, I do know that much!
                jodphil2003 Newbie

                Todd
                Congratulations! its exciting to recognize the amount of enthusiasm in your message. We would love to speak with you about your opportunity. We are a small cap commercial lender with many options including SBA loans. We would enjoy speaking with you at your convenience
                Jody L. Phillips
                Open Door Financial, LLC
                864-248-0382
                jodyphillips@opendoorfinancial.com
                1 of 1 people found this helpful
                • Re: WOW, Where to start.  Need a loan, I do know that much!
                  Mergent Adventurer
                  Todd,

                  Very ambitious plans. I think that your hard work and diligence has finally paid off. Sounds like you have everything figured out.

                  I saw in the title that you needed a loan. I don't know if you have already applied for one, but one of the main things a lender is going to look for is a business plan.

                  Mergent Planning specializes in business and marketing plans, and while you may have one already, it may not be in the accepted format, or you may have one or two key points missing.

                  Take a second to check out our business website, www.MergentPlanning.com, and if you want us to take a look at your business plan for free, we will be more than happy to do that. Feel free to contact me directly at brian@MergentPlanning.com or call me at 702-538-1798. I will get a confidentiality
                  agreement out to you ASAP, and we can go from there!

                  Best Regards,

                  Brian Mosko
                  Mergent Planning
                  702-538-1798
                  brian@mergentplanning.com
                  • Re: WOW, Where to start.  Need a loan, I do know that much!
                    FCPainter Adventurer
                    I think it all sounds great, but if I were you I would not worry about being first to market with the gym. I'd worry about making sure you get your new salon up and running profitably. With strong cash flow there, everything else will be earlier. I think first mover advantage is way overrated. Take it one step at a time and do it really right. Plus, it seems that the salon is going to be such a great marketing tool for the gym, why don't you make sure that the customers love the way you manage and run the salon and then go for it with the gym.

                    One last thought is to think about whether you are going to be a higher end gym or not. If really high end, many of them are charging people initiation fees to join. it's a clever financing tool.