Tanning salon and Cafe with separate residential flat

We are pleased to present an outstanding opportunity to acquire a well-established tanning salon, now enhanced with the addition of a vibrant coffee bar named Switch It Up Coffee Co. This business also boasts a private beauty treatment room and a self-contained residential flat, all located in the bustling area of Warwick.

Priced to facilitate an immediate transaction, this acquisition represents a lucrative opportunity for either an owner-operator or an investor. The business is supported by £60,000 in unencumbered, debt-free physical assets, providing a solid foundation for future growth.

This multifaceted establishment amalgamates several revenue streams. The tanning operations generated a proven baseline trade of £125,000 over the past year, demonstrating a successful VAT-registered business model. In addition, the coffee bar contributes an estimated annual revenue of £20,000, while the beauty treatment room rental is projected at £11,700. Furthermore, the self-contained residential flat can be sublet for an additional £9,000 per year, which contributes to a robust gross turnover of approximately £165,700.

The financial structure highlights an efficient operating model, with operating overheads at £44,000. This includes a net shop rent of £13,500, utilities, rates, and costs of goods sold, resulting in adjusted net discretionary earnings of £121,700. This low net overhead is particularly appealing, as the upper residential flat covers 40% of the gross head lease, ensuring an effective commercial shop rent of just £1,125 a month.

Key Investment Highlights

• Debt-Free Asset Base: The business includes £60,000 worth of physical assets, comprising four commercial sunbeds, premium coffee equipment, refrigeration systems, and modern point-of-sale hardware, all while the seller clears any equipment finance leases before completion.
• Diversified Revenue Streams: The business model harmoniously combines high-margin tanning services with cash-flow positive beverage sales and room rentals, alongside passive income from the residential sublet.
• Tax-Efficient Structure: The transaction is structured under the Transfer of a Going Concern (TOGC) framework, allowing qualifying buyers to avoid additional VAT on the £150,000 purchase price.

Property and Lease Details

The property is leasehold, featuring a multi-storey commercial layout that houses a shop-front reception, four tanning cubicles, a coffee counter area, and a private treatment room, along with a customer WC and storage. The gross head lease rent is set at £22,500 annually, establishing a solid foundation for the business.

Handover and Transition

The current owner is selling due to a strategic portfolio restructure. To ensure a seamless transition, a comprehensive two-week operational handover will be provided at no additional cost, covering essential aspects such as equipment maintenance, supplier relationships, and operational protocols.

Terms of Sale and Enquiries

A holding deposit of £10,000 is required upon execution of agreed Heads of Terms (HOTs), with an exclusivity period of 45 days granted for legal due diligence and lease assignment following the deposit payment. Comprehensive documentation, including till exports and asset registers, will be made available to qualified buyers upon signing a Non-Disclosure Agreement (NDA).

With a long trading history and modern, inviting interiors, this tanning salon and coffee bar combination promises a refreshing client experience. The facility's prime location attracts significant foot traffic, further enhanced by the nearby amenities, including shops and public services. This ready-made business model offers substantial potential for growth, making it a compelling opportunity for interested buyers.