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Opening a Beauty Clinic from Scratch or Buying an existing one?

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Kokaka

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Aug 9, 2019
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Hi all.
So as some of you know, I'm about to open an advanced Beauty Clinic where I live. The local I will be granted, (I have not written a contract yet) will be in a new citycentre they are building here in the city, about 1km away from the original centre. This will be the centre with commercial bussiness, banks and offices aswell as some stores. Furthermore it will be close to a parking and oposite a big avenue where there is alot of traffic.

The cost of this local is about 25k euros. Rent is about 1.2k euros per month.
Pros:
Alot of car flux
Parking
New, beautifull area and moden local.
Very high visibility
Cons:
New untested area
Construction of the whole area will finish 2021/2022 so there will be some restriction of movement for pedastrian

The idea was to go with this local however I got an offer yesterday. It is to buy an existing clinic that is not going well. The inside of the clinic is very nice, is located next to the buss stop of the biggest plaza in the city, so there are alot of movement outside. It is however locaded on the second floor of a resident building so clients need to write a code to enter building, then take the elevator or stairs to the second floor to find the clinic. The inside of the clinic is perfect, very nice and modern with 3 treatment rooms.
The reason the current owner is selling is that she has been burned out so she has not been able to maintain or grow the clinic for the last year. Example because the clinic is on the second floor, she has no vivibility from pedestrains outside. However, she has the ability to put up a big sign 2x1,5 meters outside the entrance to increase visibility bus she has not had the energy. Also she is not doing any advertisement online on social media but just have her webpage who is not that great and need a makeover.
So the potential is big I think.
She is asking 50k euros for the clinic but I'm sure I can get it for 25-30k. The turnover is about 50k a year with 20k of profit. However she does not do any treatment that generate real profit and the avarage of a normal clinic with more advanced treatments has a turnover of about 100-150k per person and 40k profit per year.
Further more she has a register of about 1.5k clients that we will get access to when we start to advertise. She will also stay for a few month to make the transver easier.

So aquisition of the clinic is 30k with 1.6k rent each month.

Pros:
Existing clinic with everything included (no expensive machines however)
Excisting clients and turnover, albeit quite small
Big potential for expanding
Locaded in the city plaza.
Potential for increased visibility and advertisement

Cons:
More expensive
The entrance is the biggest con since you have to enter a locked gate to a resident building, then rise one floor by stairs or elevator. If the clinic was on the first floor I would buy it in a heartbeat so this is the main disadvantage for me.

So the question is what clinic is the right one to buy/invest in? Both clincs has 3 rooms for treatments, locaded in good areas but the existing one has the problem with the entrance.
 

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ZCP

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how could you do both? put them together as a brand. try different things / themes. tune to what the market wants. learn to run two so you could later franchise and / or sell off the one that is under performing.

think bigger.
 
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Kokaka

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Aug 9, 2019
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how could you do both? put them together as a brand. try different things / themes. tune to what the market wants. learn to run two so you could later franchise and / or sell off the one that is under performing.

think bigger.
Thanks. Oh yeah, Im thinking big very big. Im already looking to expand to Oslo and Copenhagen (Im in sweden) and create a brand of organic cosmetics.
I have been flirting with the idea to do both but I cant do it the same time due to costs, I will lack about 35k to do so which I dont have yet.
I have today managed to rent half of the second floor clinic and will have a beautician start working there and will try to get a nurse in there aswell. That way I can see how things turn out, and will have a very little risk. If it goes great, I will buy it and try to prospone the signing of the contract of New area clinic for 6-8 month so I can open there aswell. If the entrance is to much of a disadvantage, I will leave and only open in the New area clinic.
Also the covid has made alot of clinics bankrupt so I get machines and interior for 70% off so its a good time to invest.
 

mon_fi

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If you provide good value, i don't think the entrance will be a problem. I have no clue how long it would take you to start the brand new one, but this option would teach you how to start a business...from scratch. On the other side, buying the existing one is setting you up on the fastlane "faster" than creating one from scratch. Do you have any experience running a clinic, or a business? If yes, buying the existing one could be good. Otherwise, how likely do you think you can flip the struggling clinic and make something awesome out of it? Also, do you prefer building things, or improving things? There is a big difference.

Buying is riskier, but the advantages if you handle it well are greater than creating one from scratch. If you have confidence in your managerial/learning capacities, go ahead and buy it. Otherwise, take it slow and build your own clinic. Having said that, buying the clinic will de facto give you less competition than making a new one.

3rd option: since the entrance seems to be such a problem, buy the clinic and move it where you thought about creating one in the first place. So you get to have both: your own ready clinic, and the office you wanted.
 
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Kokaka

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Aug 9, 2019
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I'd buy one, especially if you can see a way to increase value to it.
If you provide good value, i don't think the entrance will be a problem. I have no clue how long it would take you to start the brand new one, but this option would teach you how to start a business...from scratch. On the other side, buying the existing one is setting you up on the fastlane "faster" than creating one from scratch. Do you have any experience running a clinic, or a business? If yes, buying the existing one could be good. Otherwise, how likely do you think you can flip the struggling clinic and make something awesome out of it? Also, do you prefer building things, or improving things? There is a big difference.

Buying is riskier, but the advantages if you handle it well are greater than creating one from scratch. If you have confidence in your managerial/learning capacities, go ahead and buy it. Otherwise, take it slow and build your own clinic. Having said that, buying the clinic will de facto give you less competition than making a new one.

3rd option: since the entrance seems to be such a problem, buy the clinic and move it where you thought about creating one in the first place. So you get to have both: your own ready clinic, and the office you wanted.
Yes buying one does have alot of advantages. I have learnt alot during this time since I have been looking to opening a clinic for almost a year and have studied and looked up every little detail there is. So Im quite adept when it somes to clinic knowledge.
This is the first real business I am running on my own though. I have been managing a nightclub before and had a Business Project in high school which placed 2'nd in the national competition for young entrepreneurs.
I have a college who will be in the clinic every day, do social media and organise everything on the spot, she has managed 2 clinics before.
My job is all the administrative, economic and juridic work. Also negotiating which I love. I have been able to save about 40k just from negotiating with machines, providers, banks, landlords etc. and I have to say, In this field, there are alot of money to be made if you are a good negotiator since most people are very agreeable in this area and not used to negotiate.
So we are complimenting eachother perfectly, where I lack skills or knowledge is where she is the strongest and I am able to do administrate very well I think.

Anyway the potential of the Second Floor Clinic is very big. The current owner just dosent care anymore and has not done so for a long time, not advertisement and no front presence. Also, she does not do any treatment that bring in big money. Its like a hairdresser who only cut with a trimmer, no scissors, no highlight, no perms etc. She is still having a turnover of 50k with 20k revenue each year so I can easily double or triple it whithin 1-2 year. I also have 3 more rooms to either hire more personel or rent out in the beginning.
Other potentials is putting up a BIG sign with lights outside, also mesh that shows treatments on the windows facing the avenue. Just to show people that there is a clinic there. At the moment, no one knows the place exists, even it has an A+ location geographicly.
Also what we bring to the city does not exist in the state since we have the ability to work with post surgery with local surgeons and do all the post treatments and we have 2 collaborations at the moment with 1 plastic surgeon and 1 very big gastic surgeon. I am also looking to get the University Hospital here as a potential customer.

If I prefer building one or improving one, I would say Improving. Especially if I see possibilities to improve. Building is too time consuming. Been trying to open since October but prospects take way to long time to get in this type of business.

About buying the "Second Floor Clinic" and moving it if things are not going well can work and be a good idea. The problem with clinics is that you need to install certain ventilation and have access to alot running water which is expensive. So a transfer would cost about 15k and I dont have that at the moment. Could be a possibility in the future. Didin't think about that Idea, thanks.
 

mon_fi

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About buying the "Second Floor Clinic" and moving it if things are not going well can work and be a good idea. The problem with clinics is that you need to install certain ventilation and have access to alot running water which is expensive. So a transfer would cost about 15k and I dont have that at the moment. Could be a possibility in the future. Didin't think about that Idea, thanks.
Great, then to me, it sounds like buying would be the best option and once you have enough cash, you can move it out to a new place.
 
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Kokaka

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Aug 9, 2019
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Great, then to me, it sounds like buying would be the best option and once you have enough cash, you can move it out to a new place.
Thanks again. I did not or would not have that idea. It will be someone to look into since I like it alot. It will give me alot of layer of protection aswell and the ability to optimise the business.
 

mon_fi

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Thanks again. I did not or would not have that idea. It will be someone to look into since I like it alot. It will give me alot of layer of protection aswell and the ability to optimise the business.
Great! That is what the forum is for ; ) please keep us updated, i'm really interested to know about your further progresses!
 

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