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Written by: Carolyn Young
Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
Edited by: David Lepeska
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on May 18, 2022
Updated on March 26, 2024
Investment range
$52,550 - $93,100
Revenue potential
$192,000 - $480,000 p.a.
Time to build
0 – 3 months
Profit potential
$57,000 - $144,000 p.a.
Industry trend
Growing
Commitment
Full-time
People love to have that sun-kissed look, even in the winter when they’re stuck indoors for weeks on end. Tanning salons have exploded in recent years, with the US tanning industry expanding nearly 75% in the last decade.
If you want to ride that wave, you could start your own tanning salon and make a good living while helping people look great. You could open a franchise outlet for the likes of Palm Beach Tan or South Beach Tanning Company, or start your tanning salon from scratch.
But before you make your move, you need to understand how to start, market, and run a business. Fortunately, you’ll find all the information you need in this step-by-step guide as you prepare to launch your successful tanning salon.
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Starting a tanning salon has pros and cons to consider before deciding if it’s right for you.
Trends in the tanning salon industry include:
Challenges in the tanning salon industry include:
Startup costs for a tanning salon range from $50,000 to $95,000. Costs include a space rental, space preparation with tanning booths, and tanning equipment.
You’ll need a handful of items to successfully launch your tanning salon business, including:
| Start-up Costs | Ballpark Range | Average |
|---|---|---|
| Setting up a business name and corporation | $150 - $200 | $175 |
| Business licenses and permits | $100 - $300 | $200 |
| Insurance | $100-$300 | $200 |
| Business cards and brochures | $200 - $300 | $250 |
| Website setup | $1,000 - $3,000 | $2,000 |
| Rental space deposit | $3,000 - $5,000 | $4,000 |
| Space preparation | $10,000 - $20,000 | $15,000 |
| Tanning beds | $20,000 - $40,000 | $30,000 |
| Spray tanning machines | $15,000 - $20,000 | $17,500 |
| Other equipment and supplies | $3,000 - $4,000 | $3,500 |
| Total | $52,550 - $93,100 | $72,825 |
The average price for a tanning membership is about $40 a month. After rent, overhead, and labor, your profit margin should be about 30%.
In your first year or two, you could sell 400 memberships, bringing in $192,000 in annual revenue. This would mean $57,000 in profit, assuming that 30% margin. As your brand gains recognition and you get referrals, memberships could rise to 1,000. With annual revenue of $480,000, you’d make a fantastic profit of $144,000.
There are a few barriers to entry for a tanning salon. Your biggest challenges will be:
Now that you know what’s involved in starting a tanning salon, it’s a good idea to hone your concept in preparation to enter a competitive market.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Research tanning salons in your area to examine their products and services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a tanning salon that also has a nail salon or a tanning salon with extended hours.
You might consider targeting a niche market by specializing in a certain aspect of your industry, such as spray tanning or UV tanning.
This could jumpstart your word-of-mouth marketing and attract clients right away.
You can offer both tanning beds and spray tanning for one-time use, or in membership form. You can also sell skincare products for added revenue.
A single use of a tanning service is about $20. Memberships average about $40 per month. After the costs of rent, overhead, and labor you should aim for a profit margin of about 30%.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Your target market will be broad, although it may tend to be younger. You can market on sites like TikTok, Instagram, and Facebook.
The location of your tanning salon can play a significant role in its success. Look for a spot with high visibility, such as a busy commercial area or a location near a popular attraction. Consider the demographics of the area, including the age and income range of the population.
Take into account the layout and design of the space, ensuring that it is both visually appealing and functional.
By choosing the right location for your tanning salon, you can establish a thriving business that not only provides customers with a sun-kissed glow but also promotes relaxation and self-care. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.
Here are some ideas for brainstorming your business name:
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to tanning salons.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your tanning salon will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
Choose Your State
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
The IRS website also offers a tax-payers checklist, and taxes can be filed online.
It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.
Securing financing is your next step and there are plenty of ways to raise capital:
Bank and SBA loans are probably the best option, other than friends and family, for funding a tanning salon business. You might also try crowdfunding if you have an innovative concept.
Starting a tanning salon business requires obtaining a number of licenses and permits from local, state, and federal governments.
Your state may require that you have a tanning license. There are also requirements to post information about the dangers of UV rays from tanning beds.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your tanning salon business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use industry-specific software, such as SalonTouch, DaySmart, or TanTrack, to manage appointments, membership signups, customer database, and payments.
Developing a website for your tanning salon is crucial in today’s digital landscape, acting as your online storefront. You have two primary options: utilizing a website builder for a more hands-on, cost-effective approach, or hiring a professional web developer for a custom-designed site.
The importance of a well-optimized website cannot be overstated; it should be user-friendly, mobile-responsive, and optimized for search engines to enhance visibility. Including clear, compelling call-to-actions (CTAs) is vital to guide visitors towards booking appointments or contacting your salon. High-quality images, engaging content, and easy navigation further ensure a positive user experience, making your website an effective tool for attracting and retaining clients.
Here are some powerful marketing strategies for your future business:
Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your tanning salon meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your tanning salon business could be:
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a tanning salon business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in tanning salons for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in tanning salons. You’ll probably generate new customers or find companies with which you could establish a partnership.
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a tanning salon business include:
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Tanning salons are booming, and have already zoomed past their pre-pandemic levels. You could get a share of the growing market with your own tanning salon, build a thriving and popular operation — even a national franchise!
You’re off to a golden start by growing your business knowledge, so now it’s time to lay out the beds and launch your successful tanning salon.
A tanning salon can be very profitable. You can make money from individual tanning appointments, memberships, and the sale of skin care products.
A single use of a tanning service is about $20. Memberships average about $40 per month. After the costs of rent, overhead, and labor you should aim for a profit margin of about 30%. Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points.
Qualifications and skills necessary to start a tanning salon may include knowledge of tanning equipment and techniques, business management skills, customer service experience, and understanding of safety regulations related to tanning.
Effective marketing strategies for a tanning salon include utilizing social media platforms, offering promotional discounts or packages, partnering with local fitness centers or beauty-related businesses, and providing excellent customer service to encourage word-of-mouth referrals.
You could start a tanning salon on the side by having limited hours, but that would seriously impact your revenue potential. A tanning salon is best run as a full-time business.
Differentiate your tanning salon from competitors by offering additional services like spray tanning, skin care consultations, or beauty products, providing a clean and welcoming environment, offering flexible pricing options, and emphasizing exceptional customer service.
The popularity of tanning salons can vary depending on location and cultural factors. It is important to conduct market research to assess the demand and potential customer base in your specific area.
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