Tanzenite

If your looking for "just a little extra" but do not plan on putting the time and effort into it, then the tanning industry is not for you. Take your money and look into real estate. That's where the $$$ is. Good Luck!!

lucky7_93021

Yeah thats where I have been.... you have to put in just as much time to make money in real estate, especially in this market.
Thanks for all the help!

BP

1 million bucks (literally) for a very good new soft cloth car was installed. That is before the property is purchased.


A part time new tanning biz owner will likely not make any $ - you will just be employing people and make work for you.

sunsally

Good one question.....kinda.....:)

A couple of thoughts:

1. At ONE point, the tanning industry was a place to make money hand over fist. It was as if salons had printing presses in the basement and were making their own bills! Of course - -like ANY trend, the news passes slowly, and by the time EVERY one knows it's "the thing" to make money in -- it isn't anymore. Tanning is there now -- the "hey day" is past.

2. Nevertheless, strip malls LOVE tanning salons because they are "draws" -- people seek out salons and they drive traffic to other businesses. The demographics are often good for other businesses. So strip malls often solicit them -- hence one on every corner and abundant oversaturation for a business that only 10% of people even consider utilizing.

3. It used to be CHEAP to "get into the game" -- maybe 100k? Now the start-up can easily range from $200K - 500K+. The "big players" in the franchise biz, like Palm Beach tan, quote $400-750K -- per store. And they want "area developers" -- folks who will commit to multiple locations. And speaking of locations, everyone says how important "location, location, location" is (and it is!) -- but do you know how much "prime retail" costs in your town -- and if that is financially feasible for the economic realities of a tanning salon?

4. It's retail. As an absentee owner, you are entrusting your investment to a young worker in one of their first jobs, making $7/hr. Does that feel comfortable to you? Gonna hire a "full time manager"? Plan on a pay scale of at LEAST $15/hi or $30-40K/year to get someone decent. Hmm -- that just took a chunk out of the "profits" you were looking at achieving.

5. There is a BATTLE -- a WAR -- being waged in SEVERAL arenas right now in an attempt to SHUT DOWN THE TANNING INDUSTRY. The medical community is at the forefront, but the cosmetic industry isn't far behind!! They have DEEP POCKETS -- CREDIBILITY & SOPHISTICATED METHODS -- and a VESTED INTEREST to see tanning shut down. They are WAY more organized, aggressive and effective than the tanning industry can ever even HOPE to be -- and they are winning right now. There is a constant slate of new legislation being proposed to make tanning more restricted, at the same time widespread media campaigns are being waged to scare people away.

6. The "explosion of franchised tanning salons"? That has NOTHING to do with there being money to be made in tanning -- but EVERYTHING to do with money to be made in franchising!! A handful of good ones -- if that. More crooked ones than not. They cater to folks who THINK they are "entrepreneurs" -- but in reality, they want to buy a safe "cookie cutter" that they think is the road to get-rich-quick. Nothing wrong with that, but see pt #1 above -- the boat has already sailed on the "big money" here for all but the MOST savvy -- and your average person buying into the tanning franchises today isn't -- or they wouldn't be investing there!

7. Did I mention the business is seasonal? Hard to make enough money to pay for itself in most salons, many months of the year. Feast or famine, and better be a HECK of a money manager to spread it out to cover until the next busy season -- and then pray the busy season actually materializes as it has been hard to find the last few years.

8. Economic downturns -- oh yea -- it's a vanity item, a "luxury". When gas prices and utilities and everything else go up -- tanning tends to fall down the priority list. Especially when there are easy substitutes available -- like free sunshine or fairly inexpensive sunless products.

9. It's a BUSINESS -- not "tanning". Tanning seems fun, easy, fluffy -- good 'cause "I like people". But this is BUSINESS. Are you an expert at marketing, cash flow managment, employee selection, training and retention, compensation that motivates in the most efficient way, real estate and lease negotiation, etc etc etc? To say nothing of your skill in negotiating with banks, lease companies, contractors, vendors & suppliers, etc. Better be good at it all, because that's what it takes to run a successful business -- no matter what industry. Tanning is certainly no easier!

I could go on.

In short, it is -- in general -- an industry that is oversaturated, with a shrinking demand that requires GREAT business acumen, capital funding and a bit of luck -- along with a LOT of experience or great mentors -- to make money today. A handful are doing it -- most are 10-20 year veterans who have worked their way into their positions. Some are smart and lucky newcomers who found an unsaturated market and had the money to jump in quickly and make it happen. But MOST are independent operators, who got into the market over the past 5 years, and have struggled to break even most years. And a LOT have NOT made that struggle - and lost it all, or put it up for sale, hoping another starry-eyed dreamer like they once were will come along and put everything THEY have on the line, sure that THEY will somehow be so much smarter and better than everyone else who tried before them.

If you're still interested -- let me know and I'll be glad to help you. We set up salons all over the country, and they're successful. But that's only because we have a team with over 25 years of experience in the tanning industry, MBA/Ph.D in business and 20 years of consulting on employee, customer & organizational issues, a tech support team that can't be beat, another team member with 15+ years of marketing experience, etc. If you don't have all THAT in your corner -- I doubt you'll make it long enough to pay off your loans or live out your lease. Most aren't right now.

How's that for an answer to your question? :)

billable

Does anyone else stop reading after about 25 lines?

sunsally

If you do, bet your landlord and equipment lein holders and others love you!

That's ok -- a LOT of ADHD salon owners -- it seems to be a "fit" for some reason.

movieking

Great post as always Sunsally!

Marca

If you have money to invest and other interests than tanning, I would not invest it in a tanning salon. At least not in the market I'm in. Actually here in Holland I know of very little companies that can survive on "JUST" tanning. For all the reasons SunSally has posted. There are other possibilities for much better ROI!

parrot head

My wife and I opened our salon in January of last year. I purchased the building and spent $75,000 for the buildout. We then spent $120,000 for the equipment. We have since added a spray booth and just added a hp bed. This cost another $45,000. I am retired and drawing SS. My wife is employed fulltime away from the salon. Are we making enough money to cover all of our expenses? Yes. We do enjoy a few nice dinners via the salon and we do make our annual trek to Vegas for the show. Could we make living off of the salon? Absolutely not. It's more of a hobby for me and gives me something to do. I am the manager (been in the business for 20 years) and my wife is the owner. Hopefully, in 4-5 years my wife will retire and the salon will help support our champaine tastes. I am confident that the salon will continue to grow, because we constantly upgrade and improve. You can't be an absentee owner and expect to have a viable business adventure in tanning. You have to work it yourself...... I bet You're thinking ROI? I could have done better putting my money in real estate, but I wouldn't be having so much fun.

Tommy

Nope, I read every line. Here to learn something, otherwise, whay's the point?
Good Luck.

Tom