How to Buy a Spa Business
Look for a good location., Research the local economy to be sure the area is growing, as some markets are greatly affected by the downsizing of local industries., Find a spa for sale., Check out the spa., Acquire financial statements., Check the...
Step-by-Step Guide
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Step 1: Look for a good location.
Spas should be busy, attractive places with plenty of foot traffic and easy access to major roads. -
Step 2: Research the local economy to be sure the area is growing
Spa owners need clients who can afford their services, so stability or growth in medium- to high-income sectors is what you are looking for. , Search trade magazine, local brokerage listings, and business classifieds.
If there is a spa you like that's not listed, ask the owner privately if they are interested in selling. , Call the broker or number listed on the ad to determine the location of the spa.
Visit the spa and have a treatment to get a feel for the place.
Do not tell the staff you are considering buying it, or that it is for sale.
Many owners keep business sales in strict confidence until all deals are finalized. , You must first sign a confidentiality agreement to review the statements.
Once signed, the spa owner should give you 3 to 5 years prior financial statements.
You need to see tax returns, profit and loss statements and a statement of liabilities.
Spas have high liabilities due to gift certificate sales, so be sure you are aware of this up front.
Review the numbers with an accountant. , Property owners will usually want to check your credit, see your business plan, and have some assurances that you can maintain the profitability of the spa business. , Be sure you are able to transfer or get a new license for all of the services of the spa business.
Some states require a separate license for massage, cosmetology, nails, and laser treatments. , Determine the amount of debt, total liabilities and growth potential for the business.
Be sure that owner has fully disclosed any liens or potential risks.
Also, consider the owner's charge-backs or non-essential spending when determining profit potential. , You need enough capital to purchase the business and survive for at least the first few months, or until you make a profit.
Remember, once you buy a spa, you need some cash in the bank to pay for basic overhead, payroll and inventory to keep the place running.
Some owners will "owner finance" their business, so investigate this option. , Agree upon a purchase price and terms.
The contract should state exactly what you are buying--equipment, inventory, branding, web sites, client lists, licenses, and rights of use for the business.
The contract should also establish your new company entity or transfer shares of the spa business corporation, and the closing date. ,, Both the spa buyer and the spa seller should have an original signed copy. -
Step 3: as some markets are greatly affected by the downsizing of local industries.
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Step 4: Find a spa for sale.
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Step 5: Check out the spa.
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Step 6: Acquire financial statements.
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Step 7: Check the lease and be sure it is transferable before you agree to buy the spa.
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Step 8: Research license transfers.
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Step 9: Valuate the business.
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Step 10: Make an offer.
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Step 11: Get a preliminary spa business sale agreement.
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Step 12: Apply for licenses and sign lease.
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Step 13: Sign the final business sale contract.
Detailed Guide
Spas should be busy, attractive places with plenty of foot traffic and easy access to major roads.
Spa owners need clients who can afford their services, so stability or growth in medium- to high-income sectors is what you are looking for. , Search trade magazine, local brokerage listings, and business classifieds.
If there is a spa you like that's not listed, ask the owner privately if they are interested in selling. , Call the broker or number listed on the ad to determine the location of the spa.
Visit the spa and have a treatment to get a feel for the place.
Do not tell the staff you are considering buying it, or that it is for sale.
Many owners keep business sales in strict confidence until all deals are finalized. , You must first sign a confidentiality agreement to review the statements.
Once signed, the spa owner should give you 3 to 5 years prior financial statements.
You need to see tax returns, profit and loss statements and a statement of liabilities.
Spas have high liabilities due to gift certificate sales, so be sure you are aware of this up front.
Review the numbers with an accountant. , Property owners will usually want to check your credit, see your business plan, and have some assurances that you can maintain the profitability of the spa business. , Be sure you are able to transfer or get a new license for all of the services of the spa business.
Some states require a separate license for massage, cosmetology, nails, and laser treatments. , Determine the amount of debt, total liabilities and growth potential for the business.
Be sure that owner has fully disclosed any liens or potential risks.
Also, consider the owner's charge-backs or non-essential spending when determining profit potential. , You need enough capital to purchase the business and survive for at least the first few months, or until you make a profit.
Remember, once you buy a spa, you need some cash in the bank to pay for basic overhead, payroll and inventory to keep the place running.
Some owners will "owner finance" their business, so investigate this option. , Agree upon a purchase price and terms.
The contract should state exactly what you are buying--equipment, inventory, branding, web sites, client lists, licenses, and rights of use for the business.
The contract should also establish your new company entity or transfer shares of the spa business corporation, and the closing date. ,, Both the spa buyer and the spa seller should have an original signed copy.
About the Author
Timothy Vasquez
Experienced content creator specializing in practical skills guides and tutorials.
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