How to Open a Tanning Salon: Cost, Location and Legal Aspects

When opening your tanning salon, keep these essential aspects in mind:

1. Choose a location — Select a high-traffic location with good visibility, such as near shopping centers, gyms, or beauty salons. Ensure the location has adequate parking and is easily accessible.
2. Tanning equipment — Invest in high-quality tanning beds, spray tanning machines and airbrush systems.
3. Tanning products — Choose reputable tanning products that cater to different skin types and preferences. Offer a range of lotions, bronzers, and aftercare products.
4. Supplies — Stock up on essential supplies such as disposable undergarments, towels, cleaning supplies, and protective eyewear.
5. Health permits — Secure necessary health permits and ensure compliance with local health department regulations regarding sanitation and safety.
6. Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or hire one of the best LLC services on the market.
7. Legal business aspects — Register for taxes, open a business bank account, and get an EIN.
8. Hire staff — Hire knowledgeable and skilled staff for various roles, including tanning technicians, receptionists, and marketing personnel.
9. Website and online presence — Create a professional website showcasing your services, location, hours of operation, and contact information. Consider offering online booking options and maintain active social media profiles to engage with potential customers.
10. Partnerships — Build relationships with local businesses, gyms, beauty salons, and event planners to generate referrals and collaborate on promotional activities.

You May Also Wonder:

How profitable is a 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.

What qualifications and skills are necessary to start a tanning salon?

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.

Can I start a tanning salon on the side?

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.

How can I differentiate my tanning salon from competitors in terms of services or amenities?

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.

How popular is tanning salon?

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.

Step 1: Decide if the Business Is Right for You

Pros and cons

Starting a tanning salon has pros and cons to consider before deciding if it’s right for you.

Tanning salon industry trends

Industry size and growth

• Industry size and past growth – The US tanning salon industry is worth $3.9 billion in 2022 after expanding 75% in the last decade.((https://www.ibisworld.com/industry-statistics/market-size/tanning-salons-united-states/))
• Growth forecast – The US tanning salon industry is projected to grow 4.9% in 2022.
• Number of businesses – In 2022, 7,052 tanning salon businesses are operating in the US.((https://www.ibisworld.com/industry-statistics/number-of-businesses/tanning-salons-united-states/)) 
• Number of people employed – In 2022, the US tanning salon industry employs 61,770 people.((https://www.ibisworld.com/industry-statistics/employment/tanning-salons-united-states/))

Trends and challenges

Trends in the tanning salon industry include:

• Thanks to celebrity clients, spray tanning is becoming the method of choice for many people due to the risks of skin cancer from UV tanning equipment.
• Personalized tanning treatments that include customizable colors based on skin tone are becoming more common. 

Challenges in the tanning salon industry include:

• Health risks and warnings from the Centers of Disease Control have drastically reduced demand for UV tanning.
• Inhaling certain components of spray tanning materials can also cause health issues, creating concern among consumers.

How much does it cost to start a tanning salon business?

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: 

• Spray tanning machines
• Commercial tanning beds
• Inventory of lotions
• Protective eyewear
• Timers
• Cleaning supplies

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

How much can you earn from a tanning salon business?

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.

What barriers to entry are there?

There are a few barriers to entry for a tanning salon. Your biggest challenges will be:

• The startup costs of your space and equipment
• Breaking into a market crowded with tanning salons

Step 2: Hone Your Idea

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.

Why? Identify an opportunity

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.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your products or services

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. 

How much should you charge for tanning?

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.

Who? Identify your target market

Your target market will be broad, although it may tend to be younger. You can market on sites like TikTok, Instagram, and Facebook.

Where? Choose your tanning salon location

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.

Step 3: Brainstorm a Tanning Salon Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “tanning” or “tanning salon”, boosts SEO
• Name should allow for expansion, for ex: “Emma’s Tanning Palace” over “Emma’s Maternity Tanning Salon”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

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.

Step 4: Create a Tanning Salon Business Plan

Here are the key components of a business plan:

• Executive Summary: Summarize the vision and strategy of your tanning salon, highlighting its range of tanning services, target market, and approach to providing a safe and luxurious tanning experience.
• Business Overview: Describe the focus of your tanning salon, which includes offering various tanning options such as UV tanning beds, spray tans, and tanning lotions.
• Product and Services: Detail the range of services offered, including different levels of UV tanning, spray tanning, and skincare products.
• Market Analysis: Assess the demand for tanning services in your area, considering factors like local demographics and lifestyle trends.
• Competitive Analysis: Compare your salon to local competitors, focusing on how your services, equipment quality, or salon atmosphere will stand out.
• Sales and Marketing: Outline your strategy for attracting and retaining customers, such as membership packages, promotional offers, or social media marketing.
• Management Team: Highlight the experience and qualifications of your team, especially in areas like customer service, beauty industry, and salon management.
• Operations Plan: Describe the day-to-day operations of the salon, including equipment maintenance, customer appointments, and health and safety standards.
• Financial Plan: Provide an overview of financial aspects, including start-up costs, pricing strategy, and projected profitability.
• Appendix: Include supplementary documents like business licenses, equipment warranties, or detailed market research data to support your business plan.

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.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

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. 

Choose your business structure

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:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

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. 

Step 6: Register for Taxes

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.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

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. 

Step 8: Apply for Tanning Salon Business Licenses and Permits

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.

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.

Step 9: Open a Business Bank Account

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. 

Step 10: Get Business Insurance

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:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

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.

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Develop your website

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.

Marketing

Here are some powerful marketing strategies for your future business:

• Choose Relevant Directories: Begin by listing your salon on popular platforms like Google My Business, Yelp, Bing Places, and any local business directories specific to your area or industry.
• Optimize for Local SEO: Ensure your salon ranks in local searches and on maps. Use relevant keywords, keep your Google My Business listing updated, and actively seek customer reviews.
• Social Media Engagement: Utilize platforms like Instagram, Pinterest and Facebook to showcase services, share before-and-after photos, and engage with your audience. Regular posts and stories can build a loyal following.
• Email Marketing: Send newsletters to inform clients about new services, special offers, and loyalty programs. Personalized emails can help in retaining customers.
• Collaborations and Influencer Partnerships: Work with local businesses and influencers to increase your reach. This can include cross-promotions or special events.
• Referral Programs and Discounts: Encourage word-of-mouth marketing by offering incentives for referrals and first-time visitors. This helps in building a customer base quickly.
• Community Engagement: Participate in local events or host your own, like open houses or wellness seminars. This raises brand awareness and positions your salon as an active community member.
• Consistent Branding and Messaging: Ensure your marketing materials, both online and offline, reflect your brand identity and values consistently. This helps in building a recognizable and trusted brand.

Focus on USPs

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: 

• Get that golden look with spray tanning
• 24/7 tanning to fit your schedule
• Unlimited tanning memberships – lowest fees in town

Networking

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. 

Step 12: Build Your Team

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:

• Tanning Salon Attendants – greet and service customers
• General Manager – scheduling, accounting
• Marketing Lead – SEO strategies, social media

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. 

Step 13: Run a Tanning Salon – Start Making Money!

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.