I completely agree that is unsustainable. Most are part time working no more than 20 hours a week. The labor cost is honestly consistent with industry and california. The key is that minimum wage + employer taxes is roughly $23/hr. Then commission of 25% after a sales goal is hit brings it to $23-50 an hour depending on staff. Your comment gives me a great insight to moving that target goal for the commission to begin though.

Numbers with 35% labor cost hits breakeven, but I already cannot retain staff due to their job portability and almost all industry locally offering ~50% pay of services rendered.

Most instrumental thing is potentially getting rid of front desk staff, I worry though that the business simply will not be operational but times are tough and this is probably the way.

Current owner wants out, parties are interested in co-ownership. The things that I see most necessary is you need to fine comb through the books with an accountant. Besides your confidence that you can turn this business around, you do need to create a concrete business plan to show that operations can continue and what will be changed, and then also develop continencies for probabilistic events. The sale should be done with a purchase agreement and an attorney to shore up weaknesses and liabilities. Cutoff of things and indemnification lines should be drawn and explicitly written out. Get disclosures of anything that could be open liabilty, have a discovery period where you investigate everything.

The co-owners need to have an operating agreement. Have roles clearly defined. Going into business with someone is a huge commitment and requires you to essentially be married per se. You will be chained to each other for nearly ever. The percentage of ownership very much matters for legal reasons, tax reasons, etc. Do not go into business with anyone that you wouldn’t trust with your personal bank account access. And even if you do, build walls. LLC the crap out of this. There is no solid rule for this, but a small business should have ease of access to capital for a year of business at least.

GOOD LUCK