jayjay65

I'll try to keep this brief but I apologize in advance if this post gets lengthy. I am currently researching the tanning industry (in a medium sized midwestern county) as an investment opportunity but am having trouble getting a handle on what the store level economics of a 10-15 bed salon are. I've compiled all of the research regarding competitors (locations, pricing, # beds, unique service offerings, etc.) and of the 'core tanning demographic' in the area (caucasion women 18-44 & caucasion men 18-29). The market as a whole has 110,000 people in the above demographics and currently has approximately 400 beds in service. I've segmented the market by zip code and the # of people in the targeted demographic per bed (#people in 'core' demographic by zip code/# of beds in service by zip code) ranges from a low of 63 people per bed to a high of 1,000 people per bed but in the higher population areas of the county is in the 90-400 range. My question is, for pro forma purposes, what would be a reasonable expectation of net income for a 15 bed salon assuming:

- Rent in the $9-12/ sq ft range
- Lotion sales of approx 25% of total revenues
- Avg price per tanning session in the $6-7 range
- FT manager(s) to run the location(s)
- Open 7 days a week

I have built a fairly sophisticated financial model but I'm looking to benchmark my line item assumptions against reliable industry data (So if it would be easier, list expense items as a % of revenues - with an estimate of what a reasonable top line revenue range might be for the following line items):

COGS
Occupancy (Rent, CAM, RE insurance)
Utilities
Labor (incl benefits, if any)
Advertising
Business Insurance
Repairs and Maintenance
Other operating exp

Thanks.