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Old 02-13-2008, 08:58 PM   #1 (permalink)
 
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Life Expectancy of Tanning Beds and Depreciation

I have a couple questions.

First question, what is the life expectancy of a commercial tanning bed that originally cost between four to six thousand dollars assuming it is well maintained? Now, I know this is a vague question, but I'm just curious as to how long they tend to last. For example, is a 5 year-old tanning bed considered old, or REALLY old, or not that old at all?

My second question is in regards to the depreciation of tanning beds overtime. How accurate is this quote from this article?

"As a general rule, tanning beds that are 3 years old and are properly maintained will have a value of about $.15 to $.20 on the dollar. For example: if the purchase price of the bed was $10,000 new, then the value of that bed is around $1500, $2000 after 3 years provided it is in an average condition." - Source: http://www.insun.us/negotiate-salon-purchase.php

Essentially, I'm trying to assess the value of a tanning salon with 3 regular beds that are 5 years old, 1 high pressure bed that is 3 years old, and 1 standup bed that is 2 years old. I have yet to get the make and models of these beds, but I will have that info soon. For now, I'm trying to get a general idea of the life expectancy of tanning beds and how they depreciate overtime. Thanks.
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Old 02-13-2008, 09:02 PM   #2 (permalink)
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Re: Life Expectancy of Tanning Beds and Depreciation

I know SunSally and a couple others can answer this best. But my beds, cira 2001, are worth more than half the original price. I am not sure where they got those numbers from, but if a 3 year old bed is really only worth .15 to .20 cents on the dollar no one would by new!

As for whats considered old, maybe something from 10 years ago. I see plenty of beds that, like mine, are 5 to 10 years old and in service. Its less about age and more about the type of bed and brand that can determine value.

Here is where I go to "bluebook" a bed:

http://www.2ndsuntan.com
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Old 02-13-2008, 09:10 PM   #3 (permalink)
 
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Re: Life Expectancy of Tanning Beds and Depreciation

Hey, thanks for the link. Once I get the make and models I will look them up via that website. Hopefully SunSally and the others you mentioned will respond as well. Thanks again for your input.
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Old 02-13-2008, 09:30 PM   #4 (permalink)
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Re: Life Expectancy of Tanning Beds and Depreciation

In general, no, 15 - 20 cents is not nearly accurate.

Most models see an initial "drop". From there, some continue to drop, others stabilize and hold. There are some 1999 beds I would buy today, and some 2005 I wouldn't bother with.

Makes and models are critical. Also hours of use is helpful as one indicator of "condition" and "use".

Of course, the value of the BEDS may or may not equate to the value of the SALON. If you are buying a salon, you may consider it a straight asset purchase (e.g. just equipment value0 or you may be buying the business. However, even if just buying the assets, if the salon is not set up to succeed, then you should avoid it, even if it is a good buy on the beds.
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Old 02-14-2008, 08:05 AM   #5 (permalink)
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Re: Life Expectancy of Tanning Beds and Depreciation

I think a more accurate figure would be 15-20 cents on the dollar after 5-6 years.We built ours on used equipment . I paid about 20 cents on the dollar for my sonnenbraunes and sportarredos and they all had under 3,000hrs.

What you "think" your bed is worth is not what you will get if you sell it.
The tanning bed market is flooded with used equipment,it keeps driving the prices down.
Not as much on power beds,but definitely on the base beds.
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Old 02-14-2008, 08:36 AM   #6 (permalink)
 
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Re: Life Expectancy of Tanning Beds and Depreciation

Thank you all for your input so far. That makes sense to me. That 0.15 to 0.20 cent price depreciation seemed a bit much, and like most things, the make and model obviously is crucial. I will post the make a model of all the beds in the salon being considered for purchase either today or tomorrow. I am looking to buy the salon (i.e. the business), and not just the assets; however, I'm trying to estimate the value of the business as accurately as possible, so obviously the beds are a very important asset to consider. Having to replace beds in the short term could hurt profit margins considerably, and would be negotiation leverage if properly assessed.

How many salons do you own SunSally? What about you unity and megatanman?

Any tips would be greatly appreciated as I am new to this industry. Particularly, information regarding how to properly estimate a salon business and what insider questions to ask when purchasing a salon would be the most useful right now. Being in the business, what kind of insider information should I know about? What kind hidden fees are associated with running a tanning salon? Anything! I am open to learn from those with experience. Thanks.
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Old 02-14-2008, 09:23 AM   #7 (permalink)
 
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Re: Life Expectancy of Tanning Beds and Depreciation

Here are the make and models of the beds in question:

2x Sunstar Speed System ZX30
1x Sunstar Speed System ZX30 3F
1X Sundome Speed System XL48
1x Sollux 40.3

All the beds are 5 years old.

I will research the cost/value of these beds. Any insight would be appreciated. Thanks.
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Old 02-14-2008, 09:27 AM   #8 (permalink)
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Re: Life Expectancy of Tanning Beds and Depreciation

Thats freaky.... I sorta have those here too. But the year of each would help. Seeing that they are called "speed system" I am betting 2000 to 2005.
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Old 02-14-2008, 10:22 AM   #9 (permalink)
 
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Re: Life Expectancy of Tanning Beds and Depreciation

Yeah, I believe the ZX30's and the XL48 are from around 2002. I'm not 100% sure on the Sollux 40.3. The current owner said he bought it 2 years ago. What would you say the estimated value is? (They are all in good condition.)
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Old 02-14-2008, 10:26 AM   #10 (permalink)
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Re: Life Expectancy of Tanning Beds and Depreciation

The ZX30s would probably sell for over 2.5k each with the ZX30 3Fs going for a couple hundred more since they have face tanners. This is assuming good condition with average hours. The SunDome XL48 you could get anywhere from 3.5k to 4k. Sollux, no clue :)
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