solstrale

I'm in the process of developing a business plan for a new tanning and hair salon. I'm looking at 2500 square feet with a goal of having 14 - 15 rooms with 500-600 square feet reserved for the hair salon. The hair salon is a sub lease concept where I plan to sub lease each chair to individual stylists. My goal is not to make any money on the hair other than to have that space pay for nearly all of my tanning space. The salon is an upscale concept and I will feature all top of the line equipment. I've carefully looked at SunErgoline, Dr.Mueller, UWE, and UltraSun. Right now I'm leaning toward UltraSun.

The area that the salon is in is upper middle class with the average household income around $100,000. The center that I'm looking into has 9-11K cars per day and is very easy to get in and out of. I'm looking to do a three price point monthly unlimited memberships starting at 23.45 for my base beds, 39.95 for my medium pressure beds, and 44.95 for high pressure and spray on tans. I will have competition in the area but will offer the areas best value on every level of tanning. Only 1 competitor is somewhat close and their environment reminds you of a smelly oven. My other two competitors are over 3 miles away. The area that I'm looking at is on pace to grow 27% over the next 5 years and my store will be located at the entrance to where all of these new homes are currently being built.

I guess this is a long drawn out way of saying that I'm trying to find some data that can support any revenue predictions that I make so that when I go to a lender, I can present my business plan with confidence. Is there anyone who can attest to realistic numbers on an upscale salon or any industry resource that has good numbers to use when making forecasts?

I greatly appreciate any and all input.

engfant

Way too cheap. Those are almost single session prices. I have 2 levels of DECENT equipment and I charge $45/month and $75/month.
Based on your setup you should be MUCH MORE THAN ME.

For instance, you say UWE is that the S CLASS? If so that's a $20+ PER VISIT. There are people on here that get upwards of $40-$50/session in their HP beds.

There are MANY different situations but if you are talking HIGH SCALE your prices are VERY LOW SCALE.

DWhite6872

go to www.sitereports.com

sunsally

1. In a 2500sf space, depending on the exact dimensions of course, hard for me to see you having 500-600 sf for hair and STILL have room for 14-15 rooms (plus lobby and counter for both, bathrooms, laundry and electrical area,..). Especially given that you are talking about bigger beds and even HP that require 10x10 or 10x12 sized rooms. It is possible, but will be tight.

2. Of hair/tanning combos, if hair is expected to be just a small part - most find that they would have made more revenue having more tanning in the space, rather than the hair. Plus, with hair you have chemical smells, need for water. And if 500sf enough chairs that there will be a "buzz" for the hair and they can draw enough clients to be successful? I don't know about hair - but research this carefully. I would make it all tanning, and try for more like 16-18 rooms instead. More immune to competition this way, more levels/bigger beds potential (where you make your revenue).

3. For a break-even analysis "guide", see http://www.sundash.com/sundash.asp?ID1=Service+And+Contact&ID2= Break-Even+Analysis.

4. For the pricing you gave, if this is EFT and you are depending on high VOLUME with outstanding sales staff, the level 1 & 2 are probably right. $44.95/mo seems VERY low for high pressure and spray (especially if you will let them do both for that price). Many prefer the option of only offering EFT on base beds, then sell them "upgrades" to other equipment. More likely to stay on it year round and don't have to worry as much about "traffic flow" when "their bed" at the higher levels is always full. With 14-15 beds, you are a little on the small side for a "high volume" salon.

5. Typically plan on it taking at least 3 years to get to what you think/hope will be your expected capacity and revenue. Perhaps 40-50% in year 1, 70-80% in year 2 and then 100%. After that, more modest growth (10-20%/year) with higher revenue associated with those salons that can SELL (products and upgrades) and have a higher than average EFT base. Search other threads re. cash flow due to the seasonality of the business, but typically 75% of revenue between Jan & June, 25% rest of the year.

PM me with other questions - sounds like a good location!

Steve Underhill

Revenue should be based on demographics and marketing program, not how many cars that pass the center or visit the center each day. It appears you have some understanding of pricing but without a complete look at your entire program and demographics I cannot tell you what to expect.

Steve Underhill

If you are doing 75% of your business in 5 to 6 months and 25% in the other 6 to 7 months, you are doing something very wrong and leaving a lot of income on the table.

Standby

Steve, we are at 60-40. What is a good ratio to be at?

SakeBomb

You definitely need professional help on this. Steve is one third right. I do not rely solely on demographics. It is just too risky if you are going to invest perhaps hundreds of thousands into a tanning salon. What you need is a market potential analysis. This is really the only way to estimate the revenue potential for your salon. It takes years of experience in market research, consumer behavioral science--or how people spend their time and money--to do this right. I hope this answers your question.

MATT A

Your slow months should be around 30 maybe 40%. Less than the busy season. 40 Is high end pushing it though.

sunshine_tanning

solstrale,,,,,,,,,,,,,in reply to the message you posted,,, I did the same thing went to the town 22 miles from my existing buisness,and put in a tanning salon, and nail station,, we put it in a strip mall with 15000 to 18000 traffic count. all new beds some with facial tanners, bronzers and regular beds.we have the club membership and no one in town has it we sell them for 19.95 per month.We clean our own beds and the salon is declorated real pretty.The nail tech was paying me 25% of what she took in. she worked 6 mos and left me to put in her own shop. now I have (2) tanning salons and have been in the buisness for (5) years and I have come to believe that you have to have something else in that salon besides tanning. there is a off season and that is from august to feb and i dont care if you give free tanning, there wouldnt be one person out if 25 that would come and get the free tanning. When the season is over , its over and they dont have the motivation to get in the tanning bed, until after jan most of the time they start around feb 15th getting in the mood to tan. so our new tanning salon done good for (6) mos and the last (6) mos we had nothing coming in. we had to take the profit that we made during tanning season to pay the bills during the off season , so we wound up making a profit that year of 1.74 thats right,,,one dollar and seventy four cents. I think in december we took in 8.00 and the overhead is 1200.00 so the difference had to come out of the other buisness. I thought that if I put in the nicest and fanciest place in town that they would come all year,,,, wrong,,, We have a laundromat to go with the tanning at the other place.and it does well.,,,,so if you dont put something in that will carry you in the off months you will be sunk the first year,,,,maybe if you get a lease on the beauty spaces that will lock them in for so many years it will work. they are always wanting to put in their own shopp so they can get all the money.....good luck phil