Moses

I'm trying to get a handle on what monthly expenses will be. The biggest ones are obvious: rent, utilities, labor, and insurance. What else am I missing? Is there a rule of thumb for estimating the electric bill and how expensive is insurance and is it hard to get? I have a fair amount of business experience but very little (none!) with the tanning business.
Thanks,
Moses

DWhite6872

Insurance isn't that much...$300 a month (guessing)...you will want to include lease payments, lamp changes, cleaning supplies, inventory and thats all I can think of...at the moment.

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Any Advice given please consider the size of your market![ This Message was edited by: DWhite6872 on 2005-05-17 20:01 ]

RedLime

Phone, payroll taxes, loan payment - if you have a loan, merchant fees, lotion inventory....to add to the list

sunsally

Labor - not only hourly pay, but also your half of taxes, commissions, payroll service if you use one

Utilities - not only electric (rule of thumb, 10% of s.f. on year, but month-to-month varies widely, as to some areas!), gas & water but cable/DSL/internet (if you use it), double business line (need a line for c.c. machine) and voice mail.

Rent - including CAM

Insurance - do a search on companies that handle tanning. Cost depends on #units and other factors. Often due 1 year at a time - not monthly.

Prof fees - see payroll processing above, bank and merchant services (credit cards, gift cards if you use them), lawyer, accountant,...

Business loans and/or lease payments - including beds, computer(s), construction loans, credit card payoffs if used,...

Software tech support fees

Cost of good sold - lotion inventory (including sunless myst), any other retail items (plan on some shrinkage/theft too)

Salon reusable items - TP, towels, tissues, make-up wipes, complimentary candy, magazine subscriptions for lobby,...

Equip maintenance and repair - lamp changes (est this upfront, save as you go!)

Salon maintenance - cleaning supplies, rug service?, window washing?, cleaning service?, carpet cleaning?,...

Big one you missed? Advertising!! Much more expensive then you ever think!





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[ This Message was edited by: sunsally on 2005-05-17 21:00 ]

Neon Beach

I think it's all been covered. Whatever you can imagine can become an expense. Best advice, have lots of money left over to cover your butt for at least a year of known expenses............

Moses

Thanks guys, this is a big help. In my small town it is hard to spend very much on advertising. There just are no venues to advertise. We will have the ability to cross market with another business we own. We will be pretty well capitalized since we won't need a loan. Can credit cards not be cleared on a dsl line? My wife is going to run it so hopefully payroll will be a minimum. I'm hoping that tanning is a "sexy" enough business that it will attract some quality young people willing to work for not a lot of money and free tanning. Is that the case?
Thanks,
Moses

Moses

Sunsally,
You said electric rule of thumb was 10% os s.f. Excuse my ignorance but what is s.f.?

sunsally

Lots of people will want the free tanning - only a small percentage will turn out to actually be worthwhile hiring and what you could consider "quality". Recall, for this "not much money", you want them to treat the business as if it was their own in your absence - customer service, cleanliness, dependability, and of course - honesty.

Build in $$ for your wife, plus profits. That way, if she ever stops running it, you have a true idea of your costs, and profits. No sense in going into business just to buy her a break even job!

Advertising - this may include the cost of giving a "free tan or lotion sample" to a new customer, direct mail pieces, local papers, etc Sandwich sign out front if allowed? Giving gift certificates to local fundraisers (schools, non-profits,...). Advertising in school yearbooks, scoreboard signs at the high schools.

Best wishes!

sunsally

s.f. = square footage.

If salon is 1500 s.f., expect (avg) of $150/mo.

My salon is 2100 s.f., bill was $750 for March and the same for April. But I run a lot of big equipment!

movieking

Your credit card terminal can be used on the DSL line if you get a DSL line filter from Radio Shack ($10-$12) and a adaptor that allows you to plug two phone lines into one jack.