Critique my business model..

[lmaccaro]

Looking at opening a sunless tanning salon, with a primarily subscription-based business model.

Location: campus of a large university on the west coast; it's swimsuit season year round. 55k students nearby, and I'd be located in a shopping/nightlife district that has around 4 million visitors annually.

Competition nearby: one person airbrush salon and one mega chain that is very poorly run

Expenses: $1k/mo rent & overhead. I'd work there for "free" at first until I had enough clients to spend $4k/mo on an employee.

Equipment: 1 airbrush sunless, 2 mystic units.

Model: $32/mo subscription for weekly Mystics. $45/mo for weekly airbrush . Walk-up $15 Mystic, $25 airbrush . May tweak this upwards to make the subscription seem like a better deal.
I'd aim to get as many subscriptions as I can and add on mystic booths as needed if I can book them.

At this model, about 140 ongoing "subscriptions" is my break-even point (with an employee), which is about 1.6 tans per hour in a typical day. Walk-ins and additional subs would be profit.

Does that sound like a reachable goal? What am I not thinking about?

Thanks!

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[peach]

Walkins should be higher than that. Also sounds like your pricing is low, especially for that area of the US.

[Black Sun]

If you work for 'free', you are destined to fail.

Biggest mistake (new) business owners make, is not paying themselves a salary. It should be the first check your CPA sends out each month.

[lmaccaro]

Fair enough, I would pay myself to keep track of it for tax purposes. However, I would still essentially be paying myself out of my own savings, at least for 1-2 months until business picked up.

My competitors charge walk-up prices of $25-$40 for an airbrush , or $50/mo for 4 mystics/mo subscription.

However, Groupon is pretty saturated here, with about 20 tanning deals going on in my city at any given time. Groupon sunless goes for as low as $7 for a mystic, $11 for airbrush . I'm aiming for somewhere in the middle.

	Buy Spray Tan Solution www.spraytan.com - Wholesale spray tan solution for tannings salons and mobile spray tan professionals. Lowest prices on premium Bronzz™ spray tan solution. Booth or airbrush tanning.

[House of Tan]

I can tell from your posts that you have not read too much on here yet.

Please take a few days (yes, whole days) and read this site from top to bottom and save yourself money and time.

With the knowledge you have at this very moment in time, you are not prepared to make a move into this industry.

Read, and then when you need clarity on something being discussed, do not be afraid to ask. Some personalities on here are mean, some sweet, and some are just matter-of-fact (like me). Just brush off the jerks but do not always discount what they say. Sometimes the best advice is hidden in sarcasm.

Best wishes

[Black Sun]

Originally Posted by lmaccaro

However, I would still essentially be paying myself out of my own savings, at least for 1-2 months until business picked up.

You don't GET BUSINESS. You CAN NOT pay yourself from savings...do this and you will fail for sure.

Why would you risk your savings to keep the biz going?

Running a business off of private funds is a disaster waiting in the wings.

What if, business does not pick up after 1-2 months (very good chance it won't). Would you still 'depend' on your savings to sustain????

It takes a business, any business, a good 3 years to begin to show a profit.

[chen1947]

Your pricing doesn't seem complete. I have been doing a lot of researche in to opening a sunless salon I currently have a uv salon. I would look at Shine it a sunless concept created by Sun Tan City. They have a really good pricing structure and concept.