Buy a beer keep the haircut. Josh Luthman Office: 937-552-2340 Direct: 937-552-2343 1100 Wayne St Suite 1337 Troy, OH 45373 On Feb 25, 2016 10:46 AM, "Cameron Crum" <cc...@wispmon.com> wrote:
> Not sure how well that would workout... > > On Thu, Feb 25, 2016 at 9:34 AM, Simon Westlake <simon@sonar.software> > wrote: > >> I'm still waiting for you to open the Crum Brewery.. maybe you can give >> away a free haircut with every beer? >> >> On 2/25/2016 9:18 AM, Cameron Crum wrote: >> >> BTW, high end men's salons are becoming a trend, at least in urban areas. >> We actually talked about opening one here. My wife says the customer turn >> over is a lot faster and they pay almost as much. The idea was to have the >> waiting room be a sort of bar/hang out. We give away free beer (2 max, keg >> beer - total cost would be like $2/cutomer depending on the beer) and there >> would be a pool table, sports games on TV, even a smoking room for cigars >> and such. There would be a chair massage (for a fee of course), and a "head >> massage specialist" doing shampoos as part of every cut. It wouldn't hurt >> to have that one be "Very" attractive. We got into the planning stages and >> then one called "The Boardroom" opened up. Oh well. However, I have buddies >> who go there. Average price they pay is around $60. Some get straight razor >> shaves($20), haircut($30), manicures, pedicures, etc. That is pretty good. >> I bet they are out of there within 45 min. Just a haircut and they are >> probably out in 30. Compare that to a girl who can take 2+ hours in a chair >> and you have a pretty good business. >> >> On Thu, Feb 25, 2016 at 9:04 AM, Cameron Crum <cc...@wispmon.com> wrote: >> >>> They do Simon. In fact, there have been several cases where Hooters was >>> opening new locations and their stores became ready before they got through >>> all the legal wranglings for their beer/wine license and they just gave the >>> beer away. However, I'm pretty sure that most places that serve alcohol >>> make most of their profit on it, so it wouldn't be smart to give it away in >>> any volume. I participate in a lot of brewing competitions and we give beer >>> away all day. Many are at established businesses without liqor licenses. >>> Federal law says nothing about giving it away. They just want the tax money >>> if you are selling it. >>> >>> On Wed, Feb 24, 2016 at 11:38 AM, Simon Westlake < >>> <simon@sonar.software>simon@sonar.software> wrote: >>> >>>> Really? I'm surprised there aren't more places doing things like 'Free >>>> beer with your meal' or 'buy some peanuts at $5 a bowl and get a free >>>> beer!' but maybe there's already something closing that loophole.. >>>> >>>> On 2/24/2016 11:34 AM, Cameron Crum wrote: >>>> >>>> Obviously check your liquor laws, but in most states you don't need a >>>> license if you are giving it away. >>>> >>>> On Wed, Feb 24, 2016 at 11:29 AM, Chuck McCown < <ch...@wbmfg.com> >>>> ch...@wbmfg.com> wrote: >>>> >>>>> So, become a church... >>>>> >>>>> *From:* That One Guy /sarcasm <thatoneguyst...@gmail.com> >>>>> *Sent:* Wednesday, February 24, 2016 10:23 AM >>>>> *To:* <af@afmug.com>af@afmug.com >>>>> *Subject:* Re: [AFMUG] Ot buying a salon >>>>> >>>>> Booze is not a bad idea, i dont know if you can just give it and not >>>>> have a liquor license, but there are no available licenses here, i think >>>>> we >>>>> get one per church, so we have plenty of bars. >>>>> >>>>> A clarification on the relationship between the two, its a strained >>>>> familiar relationship due to differences in visions. Both parties are more >>>>> than agreeable to the whole scenario, I met with each separately >>>>> specifically to see what the dynamic was, I didnt want to get into a train >>>>> wreck. The more im learning of the details, there were alot of points in >>>>> time where all it would have taken was two people just stopping to talk to >>>>> one another and the disaster would have been avoidable, I think, based on >>>>> knowing the individuals, that had either one of them not been in the >>>>> mother/daughter environment, this would never have happened. >>>>> >>>>> A poor choice in the failure chain was retail, it got transitioned >>>>> from commission sales to a mechanism the keep the business floating. Once >>>>> that happened two things took place, the chairs saw no real benefit in >>>>> pushing it which was made worse by the fact it essentially equated to a >>>>> pay >>>>> cut, and the financier partner saw no gain in risking bringing in any new >>>>> retail. In the schooling that costs 16k, they drill that into the girls >>>>> heads, retail, retail, retail, without it, all youre offering is a haircut >>>>> and everybody offers a haircut. Thats already been an agreed upon term, >>>>> the >>>>> return of retail sales comission, and the return of loss leaders, they >>>>> completely eliminated that struggling to float. I was talking to a friend >>>>> of mine last night, she crochets artsy shit like baby covers and boob >>>>> caps, >>>>> whatever. these things move like hot cakes in the salons. We had tried to >>>>> get them in the salon before, but what the owners wanted was to make >>>>> profit >>>>> on them to the point it wasnt worth it for her to spend the time making >>>>> them for what they wanted to pay, on top of that they wanted to sell them >>>>> at too much markup. This girl doesnt live here, she has a real talent at >>>>> neat stuff. There are two other chics in town that make similar items, but >>>>> their styles are identical to one another, and they sell them in all the >>>>> salons. >>>>> >>>>> The old lady ended up selling them to other people in a short time for >>>>> her, like crack, ladies love crocheted crack. Id have no intention of >>>>> making profit on them, thats actually an expected cost. If i lose 5 bucks >>>>> on some tit hat, but that client shows it to her girlfriend who just needs >>>>> one as well, and were the only joint you can get them, the "staff" has the >>>>> option to discount them even further when the new customer comes in to get >>>>> one, if they can leverage it for a service and new contact capture. Women >>>>> are weird in the crap theyll drive 20 miles to buy, but the chair has the >>>>> option to grow their client base, and the shop gets a new marketing >>>>> contact, thats always worth 5 or 10 bucks "loss". >>>>> >>>>> I also have an expectation of some loss in inventory to the ether, but >>>>> one thing the daughter wanted but the financier partner couldn't justify >>>>> was surveillance. That will go in day one, the chairs will know every >>>>> corner that can legally be recorded will be. If theyre not serious enough >>>>> about the industry to know that theft is a rampant concern, theyre not >>>>> serious about growing their small business, and they can find a chair in >>>>> another salon. This may be a poor attitude as a business owner, but even a >>>>> high revenue generating thief is still a thief, I used to be a thief, so i >>>>> know what kind of trash one is deep inside and i dont want them as part of >>>>> the team. I know a couple of the salon owners overlook things. I cant do >>>>> that. This salon size has potential to reach the sales numbers quickly >>>>> again to where the premium pricing comes back, which is something they >>>>> dont >>>>> have right now. combine sales motivation with a digital retail square app >>>>> or whatever that broads can but some overpriced shampoo and some nifty >>>>> curling iron at a whim on their phone from the bar in the bathroom on >>>>> their >>>>> night out with friends and theres better pricing for more margin to offer >>>>> as increased commission. The way i see that, if the store is making 3 >>>>> dollars on a bottle of shampoo after commission and the pricing gains >>>>> happen to where theres room for 4 dollars on it We can give 50 cents or >>>>> even the whole dollar to the chairs in commission. So a chair that >>>>> normally >>>>> moves 3 bottles a week for 9 bucks is motivated to move more, if they move >>>>> 4, im still making the same amount i would have made if i pocketed the >>>>> discount as an increase in sales, but there not motivated to sell more >>>>> than >>>>> 3. Im over simplifying it, and probably completely wrong, but thats how >>>>> ive >>>>> always seen retail with commission, and salon markup is high >>>>> >>>>> On Wed, Feb 24, 2016 at 9:28 AM, Cameron Crum < <cc...@wispmon.com> >>>>> cc...@wispmon.com> wrote: >>>>> >>>>>> The thing about being the 51 percent share holder is that you might >>>>>> as well own the whole thing. You get to make all the decisions. Basically >>>>>> you could make it very hard for the 49% owner to make a dime off of the >>>>>> business outside of her labor contribution. I'm not saying you should do >>>>>> this, but it sounds like there is some dead weight there and it might be >>>>>> time to move on. However, your best bet is to buy the assets >>>>>> (Name,chairs,equipment,etc) of the business and leave the corporate >>>>>> structure alone. They can worry about their own debt and other >>>>>> liabilities >>>>>> with whatever money you agree to pay. After that it is their problem. >>>>>> Sign >>>>>> a new lease under the new company with the landlord and go on your way. >>>>>> Now >>>>>> you don't have to worry about having a boat anchor as a partner. The >>>>>> current majority owner should be able to make this decision on her own. >>>>>> It >>>>>> sucks for the daughter and will probably ruin their relationship if they >>>>>> have one and the mother will probably get sued if she sells it out from >>>>>> under her daughter, but oh well. I would never buy someone else's known >>>>>> liabilities especially if I knew the business was in decline. You are >>>>>> asking for trouble. They either need to clear up the liabilities before >>>>>> the >>>>>> sale (with proof of such) or sell you the assets only and GTFO. I'm sure >>>>>> your lawyer and accountant would agree. >>>>>> >>>>>> I would also worry about the business model a little bit. It would be >>>>>> too easy to cheat on the % side. Flat booth rent has lower upside, but >>>>>> more >>>>>> stability, Depending on commission from work leaves a lot of incentive to >>>>>> hide money, especially if it is a cash business. They WILL make under the >>>>>> table deals. Product is going to be a big money maker if you know how to >>>>>> push it. My wife was the AVEDA rep for SoCal for a few years back in the >>>>>> 90's, and has manged high end salons in Santa Monica and LA. She says >>>>>> that >>>>>> unless you make every appointment, and actually watch what every stylist >>>>>> does, it will be difficult to make sure they are being honest. The salon >>>>>> manager has to really on top of her game and somewhat of a hard ass. >>>>>> However, product in that business can have HUGE margins. You need to >>>>>> pick a >>>>>> pretty high end line, and make sure all the stylists are TRAINED >>>>>> correctly >>>>>> by the reps on how to sell the product, and use that product exclusively >>>>>> for shampoos and such. Offer them commissions on sales and make sure they >>>>>> are pushing it. When I was in college I worked on the beach in S. Padre >>>>>> Island in the summers for a beach service who also happened to be the >>>>>> Panama Jack distributor for Texas. As we rented umbrellas and chairs and >>>>>> boogie boards to people, we would push product giving free samples. They >>>>>> paid me 30% of what I brought in on product, so imagine the profit in a >>>>>> bottle of junk most of these places are selling. It is similar in the >>>>>> hair >>>>>> business. >>>>>> >>>>>> One last thing...free booze. Keep half decent bottles of Cab, Merlot, >>>>>> and Chardonnay on hand and maybe some decent beer for the occasional guy >>>>>> who stumbles in or the poor schlub who was dragged along by his gf and >>>>>> offer it to everyone. Don't let them get drunk, but a glass or two over >>>>>> an >>>>>> hour or so helps to loosen the purse strings. Feeding the dude a beer or >>>>>> two makes sitting in a salon more bearable and he might even spring for >>>>>> that $30 bottle of sweet conditioner that makes his chicks hair soft and >>>>>> smell good so he can take her home and see how fast he can mess it up. >>>>>> >>>>>> Good luck >>>>>> >>>>>> On Wed, Feb 24, 2016 at 5:41 AM, Lewis Bergman < >>>>>> <lewis.berg...@gmail.com>lewis.berg...@gmail.com> wrote: >>>>>> >>>>>>> How you pay yourself can depend on the type of corporate form you >>>>>>> take. LLC that are pass through don't pay taxes and all income follows >>>>>>> through to the owner's tax filing via a K1. I agree with forest in that >>>>>>> you >>>>>>> should count your salary, even though sometimes you may have to put it >>>>>>> right back in. The other side of that is if you take "excess" pay make >>>>>>> sure >>>>>>> to record that on the books in a way you can pull that off in a >>>>>>> presentation to a potential buyer. >>>>>>> You should keep forefront in mind that you must pay no more than >>>>>>> what it is worth no matter what the present owners would like to get >>>>>>> out of >>>>>>> it. >>>>>>> >>>>>>> On Wed, Feb 24, 2016, 3:40 AM Forrest Christian (List Account) < >>>>>>> <li...@packetflux.com>li...@packetflux.com> wrote: >>>>>>> >>>>>>>> I started writing a long post about how to work through this >>>>>>>> logically, but it sounds like you're already going down that path. >>>>>>>> >>>>>>>> The thoughts that occurred to me for you to consider: >>>>>>>> >>>>>>>> The business part of a failing business isn't worth anything. If >>>>>>>> you buy this, you're essentially going to have to pick up scraps (which >>>>>>>> carry baggage with them) and try to overcome that baggage. Unless you >>>>>>>> can >>>>>>>> put a hard number on the value of the going business I wouldn't >>>>>>>> consider it >>>>>>>> worth anything. And, one caution: There is a temptation to treat the >>>>>>>> existing customers (which may actually be the stylists, not the people >>>>>>>> getting their hair cut/nails done) as an asset, but you have to realize >>>>>>>> that a tarnished reputation is going to make everything more difficult >>>>>>>> than >>>>>>>> it would be if you started fresh. You have to ask yourself if >>>>>>>> gaining the >>>>>>>> existing business is worth the pain. You may actually decide that the >>>>>>>> business part of the business has a negative value as a result. >>>>>>>> >>>>>>>> Assuming the business part of the business has no value, you need >>>>>>>> to ask yourself how much are the physical things you're buying (i.e. >>>>>>>> the >>>>>>>> chairs, nail beds, etc.) worth. That's probably all you want to pay >>>>>>>> up >>>>>>>> front. Paying extra for the 'idea' of a salon seems silly. Remember >>>>>>>> things haven't been maintained so some of these are going to have to be >>>>>>>> replaced, maybe soon. So you need to look at the depreciated value >>>>>>>> (how >>>>>>>> much value they actually have left) - taking it back to a wisp, if you >>>>>>>> buy >>>>>>>> a router which lasts 5 years, 2.5 years in that router is only worth >>>>>>>> half >>>>>>>> as much, quite possibly even less. Consider that when valuating items. >>>>>>>> >>>>>>>> Assuming you could come to a purchase price that was reasonable, >>>>>>>> then, and only then should you look at the financials to see if you can >>>>>>>> make it work, including a reasonable return on investment. >>>>>>>> (Ok that sounded kinda wrong. What I mean is: Don't over pay for >>>>>>>> the assets. Don't justify over paying for the assets just because the >>>>>>>> business operation numbers (P&L) look good based on your best guesses >>>>>>>> of >>>>>>>> costs. Figure out what the assets are worth (including the business >>>>>>>> part >>>>>>>> of the business), and use that for negotiations, not any percieved >>>>>>>> potential future benefit. That isn't what you're paying for - you're >>>>>>>> paying for the assets.). >>>>>>>> >>>>>>>> A bit of a note in relation to the above is to mention that if you >>>>>>>> can make a business case for a business salon in your town, then >>>>>>>> there's a >>>>>>>> good chance you could start a salon with or without buying the existing >>>>>>>> business. That's why I'm saying 'the business part of the business is >>>>>>>> probably not worth much, especially with a tarnished reputation'. >>>>>>>> >>>>>>>> Once you get to the point of working through your business >>>>>>>> operation numbers (P&L), there are a few caveats/suggestions: >>>>>>>> >>>>>>>> 1) YOU MUST PAY YOURSELVES. This is important. Plan on paying >>>>>>>> yourselves from day one. Figure out what a reasonable pay rate is and >>>>>>>> pay >>>>>>>> yourselves. If you don't do this, you will never ever make any money >>>>>>>> at >>>>>>>> this. It's ok to escalate this with increasing load. For instance, >>>>>>>> when >>>>>>>> you start, you may only need a few hours a week... but still pay >>>>>>>> yourselves. One even worse gotcha is that not paying yourself >>>>>>>> sometimes >>>>>>>> indicates to the IRS this isn't intended as a going business and that >>>>>>>> isn't >>>>>>>> something you want to have happen. Ok, it's okay to put a bit of >>>>>>>> sweat >>>>>>>> equity into the business at first, but very shortly, you should start >>>>>>>> paying yourself for your time. >>>>>>>> >>>>>>>> 2) You must consider depreciation of equipment. You're going to >>>>>>>> have to replace that equipment sometime, you need to plan for it, and >>>>>>>> book >>>>>>>> for it. This needs to be put in your business plan from day one. >>>>>>>> That >>>>>>>> equipment you purchased costs you on an ongoing basis. If your >>>>>>>> business >>>>>>>> plan doesn't account for replacing the equipment at correct intervals, >>>>>>>> you >>>>>>>> will end up 7 years from now with an even shoddier place which is worth >>>>>>>> less than you paid for it. >>>>>>>> >>>>>>>> 3) Consider an exit strategy. How can you position yourself to be >>>>>>>> able to sell this for *more* money than you paid for it a few years >>>>>>>> from >>>>>>>> now. >>>>>>>> >>>>>>>> 4) If "your woman" plans on being a stylist there, consider >>>>>>>> treating her from a financial point EXACTLY like any of the other >>>>>>>> stylists, >>>>>>>> at least for her stylist work. That is, charge her rent for her >>>>>>>> station, >>>>>>>> etc. etc. etc. That way she will be pulling an income from the >>>>>>>> business >>>>>>>> just like if she was a stylist elsewhere. This will produce revenue >>>>>>>> for >>>>>>>> the business which it will need to pay the rent and also her salary for >>>>>>>> management duties. >>>>>>>> >>>>>>>> I think that's all I can think of for now... >>>>>>>> >>>>>>>> I do have one other reference I point ANYONE starting a business >>>>>>>> to, and thats a book/website called "business model generation". It >>>>>>>> contains tools to help people work through a successful business >>>>>>>> model. If >>>>>>>> I was doing what you're considering, I'd work through this process >>>>>>>> considering your customers as your stylists (which seems to be the >>>>>>>> normal >>>>>>>> model) which means the services (aka value proposition) you provide to >>>>>>>> your >>>>>>>> customers are things like providing a workspace, credit card >>>>>>>> processing, >>>>>>>> advertising, etc. Your goal in this business model is to fill every >>>>>>>> slot >>>>>>>> in your salon with happy stylists which you can charge large amounts of >>>>>>>> money for the quality workspaces you provide and the continuous flood >>>>>>>> of >>>>>>>> new customers your advertising provides to them. The other option is >>>>>>>> running a business model where your customers are the actual people >>>>>>>> getting >>>>>>>> their hair and nails done. >>>>>>>> >>>>>>>> I'd recommend getting a dead tree version of the book (by Alexander >>>>>>>> Osterwalder), but you may want to check the first part out online at >>>>>>>> businessmodelgeneration.com... They have a exerpt which is basically an >>>>>>>> introduction available. This isn't for everyone - some people just >>>>>>>> don't >>>>>>>> get this book. I haven't figured out a pattern about who this does or >>>>>>>> doesn't work for yet either (I'm usually wrong, so maybe it's all the >>>>>>>> people I don't think would like it). >>>>>>>> >>>>>>>> In any case, good luck. >>>>>>>> >>>>>>>> >>>>>>>> >>>>>>>> >>>>>>>> On Tue, Feb 23, 2016 at 5:57 PM, That One Guy /sarcasm < >>>>>>>> <thatoneguyst...@gmail.com>thatoneguyst...@gmail.com> wrote: >>>>>>>> >>>>>>>>> Salons are service industry with subcontractorish environments, so >>>>>>>>> it's not all that different than wisp, except it's all broads. >>>>>>>>> The salon my woman works at is failing, poor management decisions, >>>>>>>>> partners who are family (mother funded, daughter managed) mother owns >>>>>>>>> 51 >>>>>>>>> percent daughter 49. At one point it was an established and successful >>>>>>>>> business, but feelings got hurt, partners fighting, a staff coup that >>>>>>>>> took >>>>>>>>> a substantial amount of clientelle, facilities not maintained. No >>>>>>>>> clear >>>>>>>>> company structure as far as owners getting paid. A 7 thousand dollar >>>>>>>>> and 13 >>>>>>>>> thousand dollar note owed to the mother partner, etc. Management >>>>>>>>> software >>>>>>>>> client capture went from over 800 clients to under 200 captures over >>>>>>>>> a one >>>>>>>>> year span indicating to me the "staff" quit putting a lot of services >>>>>>>>> on >>>>>>>>> the books and was pocketing the cash. It was an llc but they quit >>>>>>>>> paying it >>>>>>>>> and transferred it into what they refer to as a partnership with the >>>>>>>>> 51 49 >>>>>>>>> thing, I have not seen that documentation >>>>>>>>> >>>>>>>>> I assume a lot of this could be correlated to many of your >>>>>>>>> purchases of family run wisps. >>>>>>>>> >>>>>>>>> This has the potential to be turned around, the salon had a good >>>>>>>>> reputation, and volume at one point, and its the only full service >>>>>>>>> one in >>>>>>>>> the town, so it's not completely failed. There also is room to >>>>>>>>> incorporate >>>>>>>>> some other sources of revenue into the mix. >>>>>>>>> >>>>>>>>> The 51 percent partner wants out, they would like to simply recoup >>>>>>>>> the majority of their outstanding debt and was their hands of the >>>>>>>>> matter. >>>>>>>>> Initially this was offered to us for 7k but that left an outstanding >>>>>>>>> liability of 13 on the business to the same person, and that note is >>>>>>>>> secure >>>>>>>>> via a mortgage extension. That didn't sound like a good risk so we >>>>>>>>> told >>>>>>>>> them to get a better proposal consisting of buying out that half of >>>>>>>>> the >>>>>>>>> partnership as well as a second proposal for buying out the entire >>>>>>>>> partnership. The "assets" including minimal revenue of a single >>>>>>>>> occupied >>>>>>>>> station for a year was >>>>>>>>> >>>>>>>> ...
