Do you want to start a tanning salon? If YES, here is a complete guide to starting a tanning salon business with NO money and no experience.
Okay, so we have provided you an in-depth sample tanning salon business plan template. We also took it further by analyzing and drafting a sample tanning salon marketing plan backed up by actionable guerrilla marketing ideas for tanning salons. In this article, we will be considering all the requirements for starting a tanning salon business. So put on your entrepreneurial hat and let’s proceed.
Why Start a Tanning Salon?
If you are looking towards launching a beauty related business as an aspiring entrepreneur, one of your best bet is to launch a tanning salon business. The right time to start such business is now because the tanning salon industry is presently at its growing stage.
Setting up a tanning salon business could be a fun, profitable and interesting business for someone who is skilled in the trade. With the right location, top-notch service and good marketing skills, you can serve varieties of customers that cut across individuals and corporate clients, celebrities and regular people.
Starting up a tanning salon business may not require pretty huge startup capital, but it needs significant investment capital, solid planning, and attention to detail in order to keep your business profitable. If you are diligent enough and if you have good business/marketing strategies, you can build the business from just one outlet to numerous outlets across different cities in the United States of America from the sale of franchise.
If you are considering opening a tanning salon business, all you need is some capital to purchase or lease/rent a suitable facility, the required equipment and working tools and of course flat screen TV and furniture. You would also need some additional capital to purchase the initial tanning supply, pay your employees at least for the first 3 months, and also to pay your utility bills. These expenses are called working capital.
Starting a Tanning Salon Business With No Money – A Complete Guide
- Industry Overview
The tanning salon industry includes companies that provide indoor tanning services through UV tanning beds and booths, as well as spray-on tanning services. Some operators in this industry are also involved in running complimentary services such as health spas, fitness centers, mobile tanning locations, beauty parlors and hair salons.
In recent time, the tanning salon industry has grown as United States consumers have enough money to spare for services such as tanning and other health and beauty services. As a result of this development, the demand for personal services and other luxury services have risen as consumers increase their spending on discretionary items and services.
It is expected that in 2016, the growth for this industry will plummet as health concerns mitigate improving macroeconomic conditions. Going forward, the tanning salons industry is expected to generate more income through the sale of sunless tanning beds and other merchandise which will to a large extent take care of financially empowered consumers who are looking towards making luxury purchases.
Statistics shows that the United States tanning salon market exceeded the $5 billion mark in 2011, with industry growth having slowed to around -1 percent for the five preceding years, according to research from IBIS World. The American Tanning Institute estimates that there are around 30,000 indoor tanning facilities in the US. These facilities employ more than 150,000 people and serve close to 30 million customers.
The Tanning Salons Industry is currently in the growth stage of its life cycle. Statistics has it that the Tanning Salons Industry in the United States of America is worth over $5 billion with an estimated growth rate of 2.1 percent. There are about 30,000 registered and licensed tattoo studios in the United States and they are responsible for employing about 150,000 people. It is important to state that no tanning salon company can boast of having a lion market share in the industry; the industry is very much open to competitions from all players.
Research conducted by IBISWORLD shows that Ultraviolet (UV) tanning generates about 50.9 percent of the industry’s revenue. UV tanning can be done in tanning beds or in tanning booths. One advantage of tanning booths is that they take up less space; typically, 10 to 15 square feet, which is about half the room needed for a tanning bed.
As a result of this, companies can install a greater number of units and maximize their number of customers. Furthermore, tanning booths are sometimes preferred because they are more hygienic. Nevertheless, the traditional tanning bed remains the industry’s standard. Tanning booths or beds are outfitted with fluorescent lamps that emit UV in a similar spectrum as the sun. The average sessions last between 10 minutes and 20 minutes.
The tanning salon business will continue to blossom because people will always want to tan their bodies when they want to look different. Despite the fact that the industry seems over – saturated, there is still room big enough to accommodate aspiring entrepreneurs who intend opening their own tanning salons in the United States of America.
Over and above, the tanning salons industry is very open to any aspiring entrepreneur who has acquired the required training, skills and perhaps professional certifications to start his or her own tanning salon business and of course make good money from the industry. Just ensure that your salon is well located in an environment with the right demography and you will be fine.
Starting a Tanning Salon Business – Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who patronize tanning salons cut across people of all genders and age groups; male and female, adults and children et al hence the demographic composition of the tanning salon business is all encompassing.
The truth is that when it comes to tanning and other related services carried out by a standard tanning salon, there is indeed a wide range of available customers. In essence, your target market can’t be restricted to just a group of people, but all those that reside around the locations where you have your tanning salon and who have purchasing power.
So, if you are thinking of opening your own tanning salon business, then you should make target demographics all encompassing. It should include corporate executives, students, migrants, entrepreneurs, business people, celebrities, public figures, military men and women, sports men and women, tourists, cyclists and every adult in the neighborhood where your tanning salon will be located.
List of Niche ideas Within the Tanning Salon That You Can Specialize in
It is important to state that there is no known niche area when it comes to the tanning salon business. Every player in this line of business are basically involved in carrying out services expected of a standard tanning salon. Naturally, it is common to find a standard tanning salon engaged in all of the under listed services;
- Providing UV tanning services
- Providing spray-on tanning services
- Providing airbrush tanning services
- Providing body contour tanning services
- Providing sunless tanning services
- Running complimentary services such as health spas, fitness centers, mobile tanning locations, beauty parlors and hair salons et al
- Merchandise sales of tanning related products
The Level of Competition in the Tanning Salon industry
The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your services or business properly, you will always make headway in the industry. Just ensure you are good at carrying out tanning services, you can deliver excellent customer care services and you know how to attract and reach out to your target market.
But over and above, there are several tanning salons, complimentary services businesses such as health spas, fitness centers, mobile tanning locations, beauty parlors and hair salons and any other outlets that also carryout tanning scattered all around the United States.
So, if you choose to start your own tanning salon business in the United States, you will definitely meet stiff competitions amongst these various businesses. Besides, there are larger tanning salons – brands that determine the trends in the industry and you should be ready to compete with them for customers.
List of Well – Known Brands in the Tanning Salon Industry
In every industry, there are always brands that perform better or are better regarded by customers and the general public than others. These are some of the leading tanning salons in the United States of America and in the globe;
- NY Sun Club Tanning & Airbrush
- South Beach Tanning Company
- Body Color Tanning Salon
- Club Tan Salon
- Hollywood Tans
- Cayman Tanning Salon
- Coconutz Tanning Salon
- Toasted Tanning Salon
- Glow Tanning Salon
- Sol Us Tanning Riverside
- Tanfastic Tanning & Hair Salon
- Sun Tan City
- Beach Bum Tanning & Airbrush Salon
- Energy Spa Salon & Tanning
- Sun Rayz Tanning Center
- 4 Seasons Salon
- Bronze Republic Tanning Salon: Hillsborough
- Future Tans Tanning Spa
- Amoy Salon and Spa
- Gotham Glow Airbrush Tanning
The tanning salon business is not a green business. As a matter of fact, you will come across several tanning salons, complimentary services businesses such as health spas, fitness centers, mobile tanning locations, beauty parlors and hair salons and any other outlets that also carryout tanning when you drive through town.
So, if you are mapping out your economic analysis, you should carry out thorough market survey and costing of what is required to rent a space where you are expected to open your tanning salon business and the amount required to purchase tanning tools (UV tanning equipment, Spray – On tanning equipment, Body Contour tanning equipment, tanning airbrush) and other supplies and also the running cost of the business.
Over and above, if you are considering starting a tanning salon business, then your concern should not be limited to the cost of renting a salon facility and purchasing tanning tools and equipment such as UV tanning equipment, Spray – On tanning equipment, Body Contour tanning equipment, tanning airbrush and other supplies but also on branding and on how to build a robust clientele base. The truth is that if you are able to build a robust clientele base, you are sure going to maximize profits in you tanning salon business.
Starting Your Tanning Salon Business from Scratch vs Buying a Franchise
When it comes to starting a business of this nature, it will pay you to buy the franchise of a successful and well – established tanning salon/brand as against starting from the scratch. Though it is relatively expensive to buy the franchise of an established tanning salon brand, but it will definitely pay you.
But if you truly want to build your own brand after you must have proved your worth in the tanning salons industry, then you might just want to start your own tanning salon business from the scratch. The truth is that it will pay you in the long run to start your tanning salon business from the scratch. Starting from the scratch will afford you the opportunity to conduct thorough market survey and feasibility studies before choosing a location to launch the business.
Please note that most of the big and successful tanning salons around started from the scratch and they were able to build a solid business brand.
Possible Threats and Challenges You Will Face When Starting a Tanning Salon Business
If you decide to start your own tanning salon business today, one of the major challenges you are likely going to face is the presence of well – established tanning salons and complimentary services businesses such as health spas, fitness centers, mobile tanning locations, beauty parlors and hair salons and any other outlets that also carry out tanning. The only way to avoid this challenge is to create your own market.
Some other challenges and threats that you are likely going to face are economic downturn and unfavorable government policies. There is nothing you can do as regard these threats and challenges other than to stay positive that things will work well for you.
Starting a Tanning Salon Business – Legal Matters
- Best legal entity to use for this type of business
You have the option of either choosing a general partnership, limited liability company which is commonly called an LLC, or even a sole proprietorship for a tanning salon business. But if your intention is to grow the business and have chains of standard tanning salons across the United States of America and other countries of the world via franchising, then choosing sole proprietor is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholders meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your tanning salon business; limitation of personal liability, ease of transferability, admission of new owners, investors’ expectation and of course taxes.
If you take your time to critically study the various legal entities to use for your tanning salon business with the ability to sell franchise and open chains of standard tanning salons all across the United States of America, you will agree that limited liability company; an LLC is most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.
Catchy Business Name ideas Suitable for a Tanning Salon Business
When it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. If you are considering starting your own tanning salon business, here are some catchy names that you can choose from;
- Carissa & Jamborees Tanning Salon®, LLC
- Annie & Jane™ Tanning Salon, LLC
- Jessica Wellington® Beauty Parlor, Inc.
- Eyes of the Beholder™ Beauty Parlor, Inc.
- Universal Beauty™ Tanning Salon & Spa, Inc.
- Brown Gal™ Tanning Salon & Spa, Inc.
- Rose of Sharon© Beauty Parlor, Inc.
- Angel’s Skin® Tanning Salon, LLC
- Back Street™ Beauty Parlor Inc.
- Brownie Place© Tanning Salon & Spa, Inc.
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your tanning salon business.
Here are some of the basic insurance covers that you should consider purchasing if you want to start your own tanning salon business in the United States of America;
- General insurance
- Health/Medical insurance
- Liability insurance
- Workers compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
Intellectual Property Protection/Trademark
If you are considering starting your own tanning salon business, usually you may not have any need to file for intellectual property protection. This is because the nature of the business makes it possible for you to successfully run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
But if you just want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection.
Is Professional Certification Needed to Run a Tanning Salon?
Aside from your ability to handle tanning equipment and tools, professional certification is one of the main reasons why some tanning salons stand out. If you want to make an impact in the tanning salons industry, you should work towards acquiring all the needed certifications in your area of specialization.
You are strongly encouraged to pursue professional certifications; it will go a long way to show your commitment towards the business. Certification validates your competency and shows that you are highly skilled, committed to your career and up-to-date in this competitive market.
These are some of the certifications you can work towards achieving if you want to run your own tanning salon;
- Indoor Tanning Certification
- Spray Tanning Certification
- Smart Tan Certification
- Norvell Spray Tan Certification
Please note that you can successfully run a tanning salon on a small scale in the United States and in most countries of the world without necessarily acquiring professional certifications and business license as long as you have adequate experience cum background in the tanning salons industry.
List of Legal Documents You Need to Run a Tanning Salon Business
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long hand of the law catches up with you.
These are some of the basic legal documents that you are expected to have in place if you want to legally run your own tanning salon business in the United States of America;
- Certificate of Incorporation
- Business License
- Tax Payer’s ID/Tax Identification Number
- Health inspection Certificate
- Copy of license for the service support facility and/or a recent inspection report
- Business Plan
- Non – disclosure Agreement
- Employee Handbook
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
- Building License
- Franchise or Trademark License (optional)
Financing Your Tanning Salon Business
Starting a tanning salon business can be cost effective especially if you choose to start on a small scale by running a mobile tanning salon business. Securing a standard and well – positioned salon facility and purchasing UV tanning equipment, Spray – On tanning equipment, Body Contour tanning equipment, tanning airbrush and other supplies et al are part of what will consume a large chunk of your start – up capital.
If you choose to start the business on a large scale, you would need to go source for fund to finance the business because it is expensive to start a standard large scale tanning salon business.
No doubt when it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for start – up capital for your tanning salon business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Selling shares to interested investors
- Applying for loan from your bank
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends.
Choosing a Suitable Location for your Tanning Salon Business
The location you chose to open your tanning salon business is key to the success of the business; hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people with the required purchasing power and lifestyle.
If you make the mistake of renting or leasing a facility for your tanning salon business in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business and perhaps giving direction to potential customers.
Most importantly, before choosing a location for your tanning salon business, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across a similar business that just closed shop in the location you want to open yours can’t be ruled out. This is why it is very important to gather as much facts and figures before choosing a location to set – up your own tanning salon business.
These are some of the key factors that you should consider before choosing a location for your tanning salon business;
- The demography of the location
- The demand for tanning and other related beauty services in the location
- The purchasing power of the residents of the location
- Accessibility of the location
- The number of tanning salons, and complimentary services businesses such as health spas, fitness centers, mobile tanning locations, beauty parlors and hair salons and any other outlets that also carryout tanning in the location
- The local laws and regulations in the community/state
- Traffic, parking and security
Starting a Tanning Salon Business – Technical & Manpower Details
On the average, there are no special technology or equipment needed to run this type of business except for UV tanning equipment, Spray – On tanning equipment, Body Contour tanning equipment, tanning airbrush, Computers and receipt issuing machines, Sound System (For playing music), Point of Sale Machines (POS Machines), CCTV Cameras and Flat Screen TVs. You will also need computers/laptops, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.
As regard leasing or outright purchase of a salon facility, the choice is dependent on your financial standing, but the truth is that to be on the safe side, it is advisable to start off with a short – term rent/lease while test running the business in the location. If things work out as planned, then you go on a long – term lease or outright purchase of the property but if not, then move on and source for other ideal location/facility for such business.
When it comes to hiring employees for a standard tanning salon business with more than one outlet, you should make plans to hire a competent Chief Executive Officer (you can occupy this role), Admin and Human Resources Manager, Merchandize Manager, Salon Manager, Tanning Specialist, Sales and Marketing Officer, Accounting Clerk, and Cleaners. These are some of the key employees that you can work with. On the average, you will need a minimum of 5 to 10 key staff members to run a small – scale but standard tanning salon business.
The Business Services Process Involved in a Tanning Salon Business
Basically, tanning salons make use of the amino acid tyrosine to produce melanin. This melanin leaves the melanocytes and travels up through the epidermis where it reacts with the UVA and UVB radiation through a chemical reaction darkening the pigmentation of the skin. The tanning process or increased pigmentation occurs in two phases.
It is known fact that UVA light alone, is not very efficient in stimulating melanin production in the skin, therefore, the majority of indoor tanning salons in the U.S. utilize lamps with an output combination of UVA and UVB – minimal amounts of UVB to stimulate melanin and UVA sufficient to effectively oxidize or “brown” the melanin (skin).
It is important to state that a tanning salon business may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated tanning salon business process is not cast on stone.
Starting a Tanning Salon Business – The Marketing Plan
- Marketing ideas and strategies
Generally, running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a tanning salon business, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands that determine the market direction for the tanning salons industry.
These are some of the marketing ideas and strategies that you can adopt for your tanning salons business;
- Introduce your tanning salon by sending introductory letters alongside your brochure to corporate organizations, car owners, households, sports organizations, gyms, schools, socialites, celebrities and other key stakeholders throughout the city where your tanning salon is located.
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across, so that those on the social media or those who read blogs will know where to go when they need tanning and other related beauty services within your location
- Print out fliers and business cards and strategically drop them in offices, sport facilities, libraries, public facilities and train stations et al.
- Delivering consistent customer experience to all your customers; making your first impression count positively to those that patronize your services for the first time
- Make use of attractive hand bills to create awareness and also to give direction to your tanning salon facility
- Create a basic website for your business so as to give your business an online presence
- Directly market your products
- Engage in road shows in targeted communities from time to time to promote your tanning salon business
- Join local tanning and beauty salons business associations for industry trends and tips
- Provide discount days for your customers
- Advertise our business in community based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of word of mouth marketing (referrals)
Factors That Will Help you Get the Right Product Pricing
One key factor that will help you offer your tanning services at rock bottom prices is to purchase your tanning tools (UV tanning equipment, Spray – On tanning equipment, Body Contour tanning equipment, tanning airbrush) and other supplies directly from the manufacturers in pretty large quantities. The truth is the higher the quantity of items that you purchase directly from the manufacturers, the cheaper you tend to get them.
Another strategy that will help you offer your services at the right price is to ensure that you cut operational costs to the barest minimum and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your services.
Strategies to Boost Your Tanning Salon Brand Awareness and Create Your Corporate Identity
If your intention of starting a tanning salon business is to grow the business beyond the city where you are going to be operating from to become a national and international brand by opening chains of tanning salons and selling franchise, then you must be ready to spend money on promotion and advertisement of your brand.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Your corporate identity has a lot to do when it comes to building a business that is profitable.
Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your tanning salon business;
- Place adverts on both print (newspapers and beauty magazines) and electronic media platforms
- Sponsor relevant community based events/programs
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your tanning salon business
- Install billboards in strategic locations all around your city or state
- Engage in roadshows from time to time in targeted neighborhoods to create awareness of your tanning salon business
- Distribute your fliers and handbills in target areas
- Contact corporate organizations, car owners, households, sports organizations, gyms, schools, socialites, celebrities and other key stakeholders throughout the city where your tanning salon is located informing them of your tanning salon business and the services you offer
- List your tanning salon business in local directories/yellow pages
- Advertise your tanning salon business in your official website and employ strategies that will help you pull traffic to the site
- Position your Flexi Banners at strategic positions in the location where your tanning business is located
- Ensure that all your staff members wear your branded shirts and all your vehicles and trucks/vans are well branded with your company logo et al.