Comments on: I'm looking into buying an existing tanning salon. What legal questions do I need to know/ask?

By: smallbizperson

smallbizperson — Sat, 04 Jul 2009 04:57:59 +0000

Talk to a lawyer and a CPA to find out what all you need to know for certain. If the current owner owes the IRS money and you buy the business, then you will owe the IRS money. Without really great records, you may not be able to defend your business position about how much is owed. (This whole part of the deal would be a huge distraction from running the business and definately not worth the headache.)
Rather than buy the business, perhaps you could buy his equipment only. That way, you could start your own new business with a clean slate.
Talk to the landlord of the existing location if you are interested in staying in the same place and see if he would make you a deal for the balance of the other guy’s lease.
If you are interested in keeping the same employees, they would probably be very interested in talking with you, especially if they have their own client records.
If the current salon is a franchise and you want to keep the name, talk to the franchise people directly about this.
If you are not interested in keeping the name, you have the opportunity to select your own. The fact that you are in the same location would help you capture and retain existing clients.
If you want to change the name and location, expect the start-up to go more slowly until you are able show a profit.
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By: Awakening Spirit

Awakening Spirit — Sat, 04 Jul 2009 04:27:59 +0000

My mother got skin cancer from tanning beds.

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By: Jeff H

Jeff H — Sat, 04 Jul 2009 03:40:59 +0000

You need a team of real estate and business lawyers. Add in a good CPA with IRS experience.

I would want a copy of the IRS lien against the business. A letter from the IRS stating what it would take to release the business from the claims against the guy.
Make sure that you do not assume liability for employee withholding or benefits not yet paid for.

Ask a business real estate agent what similar businesses are selling for.

Check for health inspections and code violations records from the proper agencies… not just the seller.

The above is just the tip of the iceberg.

This can be a good investment IF you have a clue how to run it. It can be a boat anchor around your neck otherwise…all that before the complications of the guy being up to his eyebrows in IRS.

INVESTIGATE BEFORE YOU INVEST. I’d be shaking in my boots without professional help.
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Former Realtor (residential .. not businesses)