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How To Open A Tanning Salon

How To Open A Tanning Salon

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How To Open A Tanning Salon

How To Start A Tanning Salon 1

If you’re looking for a business opportunity that allows you to put your passion for the beauty and skin health industries to use, then opening a tanning salon may be an appealing option. As the owner of a tanning salon business, you’ll be able to tap into an industry with a robust customer base and help clients look and feel their best on a daily basis.

Starting a tanning salon is no minor feat as it requires careful planning, understanding the market, and a having a passion for customer service. In this article, we’ll guide you through the process of starting your own tanning salon, from market research and business registration to finding the necessary funds and more.

Business Overview

A tanning salon offers a variety of services, ranging from traditional tanning beds and stand-up booths to spray tan options and even mobile tanning services. Some salons sell more than just tanning services and may offer accessories like sunglasses, skincare products, and even bathing suits.

The business necessitates an investment in high-quality equipment, hiring trained professionals, and understanding the operational requirements. It’s essential to prioritize customer safety and to stay updated on health and skincare trends to integrate them into your service offerings. Salons typically offer tanning services by appointment, though some may take walk-ins. Tanning salons often depend on repeat business throughout the season, so establishing relationships and positive experiences for customers is important.

A tanning salon can give you control of your own business and some independence, too, but starting a salon is no small undertaking. Salons require significant startup costs because of the cost of the equipment that you’ll need.

Industry Summary

The tanning salon industry is a significant player within the broader personal care sector. It has experienced various shifts over the years, with growing awareness around skin health and sun protection leading to increased demand for safe, controlled tanning options. It’s also subject to regulations and guidelines, which vary by location, so it’s important to stay updated on these to ensure your business’s compliance.

The tanning salon industry has undergone a contraction over the last five years and is projected to generate $1.8 billion in revenue by the end of 2023. The number of tanning salon businesses stands at 57,809 and employs over 66,000 people. Unlike many other industries, tanning salons are primarily owned by individuals. Palm Beach Tan is the nation’s largest indoor tanning salon chain, with more than 400 salons throughout 28 states.

According to Ist Magazine, the tanning industry is becoming more focused on providing customers with an experience than simply providing a service. Besides using the latest tanning beds with the best technology, salons need to offer more customized experiences to customers. This can involve everything from providing different skin care choices, a selection of UV light options tailored to the customer, and even different music selections. When salons can give customers a positive experience, customers are more likely to see the brand in a positive light and return again for future tanning sessions.

Another trend is the shift towards safer tanning options due to threats from regulatory groups like the Food and Drug Administration. These groups are working to increase public education about the dangers of indoor tanning, causing potential customers to be concerned about indoor tanning and even avoid it entirely. To succeed, tanning salons will need to be able to evolve with customer demands for safer tanning options, like spray tanning.

Target Market

The target market for a tanning salon typically includes individuals who value maintaining a tanned appearance throughout the year. The primary target market for tanning salons is white females between the ages of 18 and 39. Generally, tanning salon clients are interested in health and beauty, and are active on social media.

College students and, on occasion, high school students may also be part of the target market, depending on state regulations allowing this age bracket to use the equipment legally. The market can also include fitness enthusiasts and individuals preparing for special events like weddings or vacations.

With several potential segments to market towards, it’s important to understand your local demographics to tailor your services and marketing strategies effectively.

Checklist To Start A Tanning Salon

If you’re thinking about starting your own tanning salon, there are a few things you should keep in mind. Here is a checklist of the essentials to get started.

Step 1: Research the market

Researching whether there are enough potential customers to start a new tanning salon requires conducting a thorough market analysis, which can be done in a variety of ways. Here are some steps and resources to help you understand if there is a viable market for your new business:

Demographic research: Use online resources like the U.S. Census Bureau’s website or data from local government websites to understand the population size, demographic makeup, income levels, and other relevant factors in your intended location. Look for areas with a high number of individuals who are likely to use tanning services. This might include younger populations, fitness enthusiasts, or regions with less sunshine.

Industry research: Check out industry reports and trends for the tanning salon industry. Trade associations such as the American Suntanning Association and American Tanning Institute may be helpful.

Competitive analysis: Investigate the competition in your proposed area. Look at how many tanning salons already exist, where they are located, what services they offer, their pricing, and customer reviews. You can use Google Maps, Yelp, or other similar tools for this purpose. If the market seems saturated, it may not be the best idea to open another salon.

Customer surveys: Create surveys to gather information directly from potential customers. Services like SurveyMonkey, Google Forms, or social media polls can be used to understand people’s tanning habits, preferences, and needs. Ask about how often they use tanning services, what they like and dislike about current offerings, and what they would want from a new tanning salon.

Test marketing: Consider opening a pop-up salon or offering mobile services first to test the market. This can help you gauge interest and get customer feedback before investing fully in a permanent location.

Local business resources: Reach out to your local Chamber of Commerce, economic development office, or Small Business Development Center. They often have resources available for entrepreneurs, including market data and analysis tools.

Social media analysis: Check in with local pages and groups on social media and learn more about tanning and comments about the competition.

Economic trends: Since tanning is largely considered a luxury service, consider the overall economic climate and future predictions. Economic downturns or periods of uncertainty can impact discretionary spending like tanning services. Resources such as the Bureau of Economic Analysis or the Federal Reserve Economic Data can provide useful information.

Remember that while researching is crucial, it’s just one part of the puzzle. You’ll also need to consider other factors such as your business plan, funding, and local regulations when deciding whether to start a new tanning salon.

Step 2: Create a business plan

Writing a business plan for a tanning salon is crucial for a variety of reasons. A well-structured business plan acts as a roadmap guiding your business toward its goals. It can help you secure funding, understand your market, plan your strategy, and track your progress.

For a tanning salon looking for funding, certain sections of the business plan might hold particular importance:

Market analysis: This section is crucial because it helps you understand your target market, competition, and the overall landscape of the tanning industry. For a tanning salon, this could include understanding the demographics and behaviors of your target customers, identifying key competitors and their offerings, and outlining the trends and growth projections in the tanning industry.

Marketing and sales strategy: For a tanning salon, it’s crucial to have a sound marketing strategy to attract and retain customers. This could involve special promotions for off-peak times, loyalty programs, partnerships with local businesses, and a strong online presence. Your sales strategy could outline how you’ll upsell and cross-sell services and products.

Financial projections: This section is key to understanding the potential profitability of your salon. It should include projected income, cash flow statements, and a break-even analysis. For a tanning salon, consider factors such as the cost of equipment, rental space, staffing, utilities, marketing, and the pricing of your services.

Related: Sample tanning salon business plan

Step 3: Scout out a good location

Finding the right location for a tanning salon is an important consideration, as the location can significantly impact the success of your business.
 
You should ideally be looking for a location with high visibility, easy access, and ample parking, in an area that matches your target demographic. Consider factors such as local competition, proximity to complementary businesses like fitness centers or beauty salons. Malls and other busy shopping areas also typically make for a good location, and research any local zoning laws that could affect your business.

Once you’ve identified potential locations, research any zoning laws that could restrict the ability to run a tanning salon from that spot. In addition, estimate any renovation costs needed to transform the space into a tanning salon. This could include installing tanning equipment, creating changing areas, upgrading electrical and HVAC systems, or enhancing the overall ambiance to attract and retain customers. These renovation costs can greatly impact your overall startup costs and are essential to factor into your business plan.

Related: Choosing a business location

Step 4: Secure funding

Starting a tanning salon can be a considerable investment, and securing funding before making any purchases or signing any contracts is crucial.

One of the most common types of funding is personal savings, where the business owner invests their own money into the venture. This not only covers initial costs but can also demonstrate confidence to other potential investors.

Salon owners can turn to friends and family for funding. This method can be beneficial due to potentially lower interest rates and more flexible repayment terms, but it’s crucial to ensure clarity and transparency to protect personal relationships.

Small business loans from banks or credit unions are another typical funding source. These institutions generally offer reasonable interest rates and terms, but they’ll likely require a solid business plan and a good credit score. In some cases, a lender will require a loan guarantee from the Small Business Administration (SBA)

Equipment financing is another common method where lenders provide funds specifically for purchasing salon equipment; this type of loan is secured, meaning the equipment itself acts as collateral.

Related: Finding the money to start a business

Step 5: Apply for business licenses and permits

Starting a tanning salon business involves several legal considerations to ensure proper registration and operation. The specifics may vary by state, so it’s crucial to take time to research what is required before opening the tanning business.

Business structure: One of the first steps is deciding the business structure. This could be a Sole Proprietorship, Partnership, Limited Liability Company (LLC), or Corporation. The choice affects tax obligations, personal liability, and management structure.

For a tanning salon, many owners opt for an LLC or corporation, which offers provides liability protection for the owner’s personal assets should the salon be sued.

Related: Comparison of business structures

Business name registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.

Related: Tips and ideas for naming a tanning salon

During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.

Related: Finding a domain name for your business

Business licensing: The specific registrations required for a tanning salon vary by state and local jurisdiction. In some states, you may need to register your tanning equipment and/or obtain a permit from the local Department of Public Health. Some areas, require tanning salon owners to obtain training, tanning certification, and/or to pass a state-administered test – see state tanning requirements. 

Additionally, most states have regulations restricting or prohibiting minors from using tanning equipment and salons must adhere to FDA regulations regarding tanning equipment and customer safety, including protective eyewear and maximum exposure times.

In addition to any tanning-specific requirements, there are also general business registrations such as a business license, sales tax permit, Employer Identification Number, and Occupancy Permit, among others.

Related: Common business licenses, permits, and registrations by state

Remember, starting a business involves following both federal and state laws. It’s crucial to understand these requirements upfront to avoid potential fines, penalties, or legal issues down the road. As always, consulting with a legal advisor can ensure that you’re fully compliant with all necessary laws and regulations.

Step 6: Acquire and set up the salon

After securing funding and a location for your tanning salon, there are several important steps to take in preparing the location for opening. Here are some things to consider:

Renovation and design: The first step will be to renovate the space to suit the needs of a tanning salon. This might involve creating separate rooms for tanning beds, setting up a reception area, installing specialized lighting, and ensuring proper ventilation and electrical capacities for the tanning equipment. Professional interior designers with experience in salon layouts can be incredibly useful during this phase.

Equipment installation: Next, you’ll need to purchase and install your tanning equipment. This might include traditional tanning beds, stand-up booths, spray tan equipment, or a mix depending on your services. Always ensure the equipment meets industry regulations and standards.

Salon software: Consider investing in salon management software. These systems can handle appointment booking, customer management, sales, inventory, and more. Popular programs include Vagaro, GlossGenius, and SalonTouch Studio.

Health and safety: Prioritize health and safety measures. This might include installing sanitizer stations, providing protective eyewear, posting clear instructions for tanning equipment, and establishing cleaning protocols.

Setting up a tanning salon requires careful planning and preparation. By following these steps, you can create a welcoming, efficient, and safe environment for your customers.

Step 7: Develop a marketing strategy

Successful marketing for a tanning salon often hinges on building strong relationships within the community and creating a distinctive brand.

One strategy is to form partnerships with complementary local businesses, such as gyms, beauty salons, or clothing boutiques. As an incentive, you can offer discounts or package deals to customers who frequent these partner businesses.

Also, consider launching a customer referral program, where current customers get incentives for referring new customers.

Regularly hosting events or workshops related to skincare, sun safety, or summer fashion trends can also draw in new customers and position your salon as a go-to resource.

Finally, building a strong online presence is a necessity. This can be done through a website, social media profiles, and business directory listings like Yelp and Google My Business. You can use these platforms to showcase your services and engage with customers by highlighting your services, showcasing before-and-after transformations, sharing customer testimonials, and posting exclusive deals. Always aim for authentic engagement, responding to comments and messages promptly to show your commitment to excellent customer service.

Related: Low-cost ideas to market a new business

Step 8: Hire & train employees

Hiring the right staff for a tanning salon can make a significant difference in its success. The process requires careful consideration of the specific roles needed, the compensation for these roles, and the unique aspects of the tanning industry that influence staffing decisions.

In a typical tanning salon, you’ll likely need tanning consultants, who interact directly with customers, explain services, answer phones, manage appointments, and ensure the smooth operation of tanning equipment. According to the Bureau of Labor Statistics, the median pay for a skincare specialist, which includes tanning consultants, was around $17.93 per hour. Salaries can vary widely, though, depending on experience, location, and specific responsibilities.

Managers are also crucial employees in a tanning salon. They oversee daily operations, handle customer service issues, manage employees, and often handle financial tasks like payroll and inventory. The salary range for tanning salon managers is between $41,000 and $61,000.

In addition to budgeting for employee salaries, hiring employees means that a salon needs to be prepared for other related expenses like unemployment insurance, Social Security contributions, and paid time off.

When hiring staff for a tanning salon, there are several important factors to consider. First off, look for individuals who have strong customer service skills. Tanning salons are part of the service industry, and a positive, customer-focused attitude is crucial.

It’s also important to ensure that employees are trained to handle the unique aspects of a tanning salon. They should have a thorough understanding of the tanning process, the risks involved, and safety measures to protect customers. They should be knowledgeable about different skin types and their varying responses to tanning.

Finally, consider hiring employees who are capable of upselling or cross-selling products and services. This includes tanning lotions, packages, or other skin care products. Training staff in these sales techniques can greatly increase the revenue of your tanning salon.

Remember, your staff is a representation of your brand. Hiring friendly, knowledgeable, and professional individuals can help ensure a positive experience for your customers and a successful operation for your tanning salon.

Related: State guides to hiring your first employee

Step 9: Launch your tanning salon!

As you embark on your journey to open a tanning salon, there are several other essential elements to keep in mind. Every tanning salon will have different needs, and this list isn’t exhaustive. However, by considering these points, you can ensure that you’ve covered your bases and are ready to launch your tanning salon with success.

Business Insurance: It’s essential to protect your investment with the right business insurance. Professional liability insurance can cover claims related to the services you provide. General liability insurance can cover injuries or property damage that occur at your salon. If you’re hiring employees, you’ll also likely need workers’ compensation insurance.

Related: What types of insurance does a tanning salon need?

Bookkeeping: Setting up an effective bookkeeping system from the start is critical. This will help you keep track of income and expenses, make tax filing easier, and give you insights into your business’s financial health. Consider hiring a professional bookkeeper or accountant, or using accounting software like Wave Accounting (FREE) or Quickbooks.

Business bank account: It’s crucial to separate your personal finances from your business finances. Open a business bank account, and consider getting a business credit card to help manage expenses.

Set pricing: Set competitive but profitable prices for your services. Research what other tanning salons in your area charge, and consider factors like your overhead costs, desired profit margin, and the unique value you offer.

Payment systems: In today’s digital age, accepting credit cards is practically a necessity. Consider setting up a merchant services account to accept credit and debit cards, and look into mobile payment options as well. A few companies include Square or Stripe.

Grand opening: Plan a memorable grand opening to attract your first customers. This could involve special promotions, a local press release, or even a community event.

Seek advice: Seeking advice from professionals like lawyers, accountants, and experienced salon owners can provide additional insights tailored to your specific situation.

This material is property of StartingYourBusiness.com

Greg’s Tip: It’s important to realize that tanning is largely a seasonal activity, and tanning salons make most of their money in the spring and early summer. Be sure to budgeting appropriatley to keep the salon operational all year long will be important.

Greg's Business Tip

Common Questions When Starting A Tanning Salon

How much does it cost to start a tanning salon?

The cost to start a tanning salon can vary widely depending on numerous factors, such as location, size of the salon, services offered, number of tanning beds, and renovations needed for the space.

On average, starting a tanning salon can cost between $100,000 and $250,000.

Common costs to start include:

Leasing: This is often one of the most significant expenses. The cost will vary depending on the location and size of your salon. Expect to spend between $10 to $40 per square foot per year on leasing.

Renovations: Depending on the state of the space you’re leasing, you may need to make substantial renovations, shelving, reception area, etc. to convert it into a suitable tanning salon. This could cost between $20,000 and $50,000.

Tanning equipment: You’ll need to buy tanning beds, which can range from $2,500 for a basic model to over $7,000 for a high-end model. If you plan to offer spray tanning, that equipment can cost between $1,500 and $5,000.

Initial inventory: If you plan to sell products like tanning lotions, you’ll need to purchase initial inventory. Expect to spend around $1,000 to $2,000 on inventory.

Licenses and permits: You’ll also need to budget for business licenses and permits. These costs will vary by state but could be a few hundred to a few thousand dollars.

Marketing: Budget at least $2,000 to $3,000 for initial marketing efforts. This can include online advertising, print materials, and a grand opening event.

Operating expenses: It’s crucial to have three to six months’ worth of operating expenses on hand as a buffer. These expenses can include utility bills, salaries, insurance, and cleaning supplies. This could add up to $30,000 to $60,000, depending on the size of your salon and the number of employees.

Remember, these are rough estimates, and actual costs will vary based on specific situations and decisions. It’s important to do thorough research and create a detailed business plan to understand all potential costs associated with starting your tanning salon.

Is a tanning salon profitable?

The potential income for a tanning salon owner can vary widely based on numerous factors, including the salon’s location, size, operating hours, the pricing of services, and the overall demand for tanning services in the area.

As a rough estimate, a common formula in the tanning salon industry takes the number of tanning beds in the salon, multiplies it by the number of average daily sessions a bed can accommodate, and then multiplies it by the average cost of a tanning session.

For example, if a salon has 10 tanning beds, each bed can accommodate an average of four sessions a day, and the average cost of a tanning session is $15, the daily gross income would be 10 beds * 4 sessions * $15/session = $600. Assuming the salon operates 30 days a month, monthly gross income would be $600 * 30 = $18,000. Annual gross income would then be $18,000 * 12 = $216,000.

However, it’s important to remember that this is gross income and doesn’t account for expenses like rent, utilities, salaries, insurance, and maintenance.

The net income, which is the owner’s actual take-home earnings, will be the gross income minus all these expenses. The exact net income will depend on how well the owner manages these costs, but industry averages suggest that net profit margins can range between 10% and 15% for tanning salons, making the yearly earnings potentially somewhere between $21,600 and $32,400 in this example.

Remember, these numbers are highly dependent on the specific parameters used, and the actual income can vary. It’s crucial to carry out a detailed financial analysis as part of your business plan to estimate potential earnings accurately.

What skills are needed to run a tanning salon?

While opening a tanning salon doesn’t require a business degree, there are certain skills and experiences that are valuable to have in this industry.

Knowledge of tanning and skincare: With more customers becoming concerned about the potential health effects of tanning, any salon owner will benefit from a knowledge of tanning and skincare. Being able to discuss skin health with customers and offer well-informed tips and advice can build customers’ trust in the business.

Customer service experience: The ability to engage with customers and make them feel welcome and appreciated is important in tanning salons. Customers are increasingly valuing the experience that tanning offers, so personable business owners can create meaningful connections with customers, encouraging them to become returning customers.

Attention to detail: Small details can have big implications in a tanning salon setting. Not only is attention to detail important for the customers’ safety, but focusing on the little details that contribute to a salon’s atmosphere can make it a more pleasant and enjoyable space. These small improvements can help to drive tanning sales and earn returning customers.

Marketing skills: Marketing a tanning salon takes some skill, but even basic marketing skills will help a salon owner raise awareness of their salon. The more marketing a salon owner can do themselves, like placing print advertising and creating social media accounts, the more they’ll be able to save by only hiring a professional marketer to take care of more complicated tasks.

What is the NAICS code for a tanning salon?

The NAICS code for a tanning salon is 812199.

The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.

Related: What is a NAICS code?

How To Open A Tanning Salon

How To Open A Tanning Salon

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