Running a tanning salon – what you need to know

• Melanie Luff

Despite being somewhat controversial in recent years, tanning salons are still a popular investment choice and a $3bn industry.

Like any business, before you enter the sector you need a business plan and a strategy to compete in what is a highly competitive market. Here are just a few things to consider (and here are some more).

Location

Location is a critical factor as many salons rely on passing trade. Make sure you buy a salon or suitable property in an area with high footfall – those on the main street or in malls tend to be more profitable.

Pricing

Do some market research and take a look at your competition: what are their prices? What offers do they have on?

Think about what offers you can provide if a customer wants to book a course of sessions, consider the mark-up of any beauty products you intend to sell, find a good supplier and decide whether to charge a small fee for disposable protective equipment or whether this will be inclusive.

Sales

For businesses like tanning salons a lot of their business comes from cash sales – i.e. income received at the time of sale, each time they provide a service. Cash sales can come in the form of cash, debit and credit cards and gift/promotional vouchers.

To get an idea of your projected cash flow you will need to estimate your income for the next 12 months. To do this you will need to work out the approximate number of sessions you will sell, alongside any other services/products you wish to provide and at what price.

Demand

However, when doing your estimations it’s worth keeping in mind that some seasons will be busier than others (there tends to be a spike over the spring and summer months).

You will also need to consider your clientele when deciding on your opening hours.

Will you operate outside normal business hours to allow people to come after work? Will you stay open on holidays and weekends?

Opening later is wise if you’re catering largely to busy professionals; less so if stay-at-home mums or shift workers account for a large share of your business.

Alternative products and services

Plenty of tanning salons offer other beauty treatments like waxing, nails and spray tanning. Alternative treatments such as accelerators or aftercare products can really boost your revenues, so it is worth considering your options.

Units

If a prospective salon or premises doesn’t come with tanning equipment or you want to expand your new business, then you will need to decide what kind of units you want to install:

-       Will you have sunbeds or vertical standing units?

-       How many machines do you want?

-       Will you buy them, lease them or enter into a profit sharing scheme with the manufacturer?

Buying – This can be an expensive option, but you can purchase refurbished beds at almost half the cost of buying them new.

Lease purchase – Lease purchasing beds is one of the more popular options for new salon owners. The owner pays a weekly rental charge and owns the beds after a certain number of instalments (this can take up to two years).

Profit-share – a profit-share scheme is where the salon does not own the beds. Instead, they are owned by the supplier. The supplier will charge an installation fee and tend to the upkeep of beds in return for a percentage of profits (usually 50%).

Marketing

When you buy an existing salon you will probably inherit a sizeable client base as successful tanning salons have plenty of regular customers.

But this doesn’t mean that you should just sit back and relax. To draw in new customers you need a good marketing plan.

Many salon owners choose to advertise special deals to get new customers through the door. For example: one free session on a 30-minute course for first-time customers or a friend referral scheme that also benefits your existing customers.

Advertise in the right kind of print publications – and not just beauty magazines, but men’s fitness magazines too, because men are an increasingly important demographic in the age of the metrosexual. And foster a strong social media presence on Facebook, Twitter and Instagram, where you can advertise time-limited offers, launch competitions or promote memes.

Licensing

As a tanning salon proprietor you may be required to obtain a licence from your local authority. Each province will have certain requirements – for example limiting the number of sessions each customer is allowed over a given time period.

You will also probably need to conduct regular maintenance checks to obtain and retain a safety test certificate. The terms of this requirement will vary depending on your local area, so check with your local authority.

Health and safety

There are lots of rules and regulations surrounding the tanning industry, so proprietors have to be responsible and educate their clients about the risks associated with tanning and how to minimize those risks, taking into account different skin types.

You will also need to provide required protective equipment, such as eye protection. This can either be disposable or reusable – but keep in mind that reusable protection must be cleaned after every single use.

The industry’s controversial reputation may put some business owners off, but you could be a champion for the majority of responsible proprietors. Provide a balanced view: promote the benefits – it can improve certain skin conditions, such as psoriasis, for instance – as well the risks.

Like most businesses, if you keep your customers safe, healthy and happy they will keep coming back.