Tan Hopes

Okay Robbie S - I'd say from $18.88 to $28.88 a month is going up. A $25 package that cost me $4 for a Level 2 bed now cost me $8 - Level 3 $6 now $10, Level 4 $8 now $12, Level 5 $10 now $15. Without me getting too snotty here, after years of tanning at my location, I think I can make a fair judgement on whether the help has been rude or not. And if they really do know what they're doing, then explain why the customers complain openly while sitting in the lobby???

Oops, sorry didn't mean to hurt your feelings Robbie S (since you own Darque Tan, why did you just now join this forum if you've been in business since 1990 - was it for damage control?) Don't tell me you aren't aware that the prices have gone up, I even called the store to verify the costs...

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Was someone PAWD? Find out next on 60 Minutes!

Anyway. If the clientele are there and can support you, its a good situation. The fact that the area is rapidly growing is a plus. Keep in mind that once that area stops growing your growth will stop too. Thats the one thing you have to be prepared for. Plot a 5 mile radius around the salon, that will be the bulk of your clients.

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Anyone know where the thread "Leaving Money On the Table" is?
Robbie S?
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sunsally

Tan Hopes -

I was watching this thread earlier, and my first thought was ...."Only 60K population, Darque Tan market - their salon is very popular, the others are dirty and need to change lamps.....hmmm......pretty easy to do a quick clean and change lamps if new competition comes to town, and even easier to add a new Darque Tan --- I'd say no".

Then I see how you have responded to "Robbie S", and even more so, I'd say ---- NO.

As I have a habit of writing long posts, I'm going to break this into smaller pieces with some general advice for new prospective salon owners everywhere.

First advice - KNOW your competition!

While you may not know this, Robbie S is among the most widely respected in this entire industry as a great mind and great businessman. Darque Tan is among the most successful models in the country. Robbie has implemented some of the most successful strategies now copied (sometimes well, sometimes not well) by salons everywhere - oftentimes with his help and encouragement.

And no - he is not my "friend", we have met in passing and I can assure you he has no idea who I am -- but in my line of work I interact with his peers, suppliers, friends and others, have studied his model as a consultant and I have also been on the boards long enough to recall when he more actively participated and I can assure you he is the "real deal".

CAN you open one there? Sure. Can you be successful? Maybe. I guarantee I have NEVER talked to one salon owner ever, in over 5 years in this industry, who didn't think that the existing competition where they wanted to open was a) dirty and b) rude/bad customer service. Always - EVERY time. What they don't realize is it is a lot more than that separating success from failure.

"Know your competition" means --- know what THEY can do to respond to you. Can they get off their butts and do a quick spruce up on decor or add a bed and suddenly be in the game again at minimal cost? Can they stop being lassez-faire with staff and reinforce good customer service skills? Can they offer some crazy specials (free tanning for a week, a month, a summer, a year.......) to ensure you never get off your feet?? Can they add another store to your market and "book end" you so that they are the "first stop" for customers coming from any direction??

Look at your competition with a CRITICAL eye. But then go back and try to look at them with the most generous attributions. What might CUSTOMERS like about going there? Is it convenient (location, hours), comfortable (been going there, familiar), cheap, popular (there are a LOT of people who like to "stay with the herd", even when that means waiting around -- it is why some popular restaurants will have 1 hour plus waits in a night and another down the street might be empty!)? Is it only a little bit of those things, but they have INCREDIBLE sales skills and somehow "talk" customers into THINKING it is those things?

Step 1 for anyone thinking of opening a salon - KNOW your competition!

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sunsally

Step Two - Look at it as an INVESTMENT, and be unemotional in your analysis.


I run into SO many prospective or current owners who "have a dream". And that is great -- but this SHOULD be about making money! Ultimately, it is very simple -- you are going to "invest" money - and time -- into a project, and you want to see if it is going to have the best return of your money, and time, compared to alternative investments.

When I see people write things like "I don't have to work" or "I don't mind working 70 hours" -- part of me thinks -- ok, that's good - that gives them some flexibility in terms of capital issues as well as tells me they understand the realities of owning a business.

But really -- NOBODY wants to work 70 hours a week for NO pay!!! To "break even" on all the money and time they invested! Or even to LOSE money!!! If you are going to do that, go start up a foodbank for the community in your basement and use the money to stock it with food for the homeless or something more noble than tanning! :)

So part of the BUSINESS PLAN should be whether or not you HAVE to draw money from your time in the business, to fund your own lifestyle and survival. But part of the business plan should ALSO be whether or not it DOES pay you for your time - at some reasonable market wage - as well as is making enough to pay back the initial investment at some reasonable market rate of return - as well as making some "profit" on top of those items! If it can't do all three -- it isn't an investment, it is an expensive and time consuming dream. Nothing wrong with that if you have that luxury - just know it going in.

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sunsally

Step Three - Be properly capitalized (with a tip of the hat to DCJJP2's earlier post)


Write your business plan, then cut in half what you REALLY believe you will achieve in revenues so you feel you are being very conservative. THEN - cut revenues in half again, and double expenses. NOW you are ready! :)


Again, time after time over the years I meet new salon owner after salon owner who think they will be able to exactly plan their costs and the timing of their opening -- and are "surprised" when neither goes as planned. EVERY time!

A list of the "unexpecteds" can and often includes:

-landlord takes longer to review and finalize the lease to get things started

-landlord takes longer on "their part" (especially for folks going into new strip malls that aren't finished being built yet!!)

-permits get hung up and take longer

-contractors are flakes and don't stay on schedule

-inspections don't go as planned

etc, etc, etc...

It isn't uncommon for days to stretch to weeks, weeks to months.

In a seasonal business like tanning, the "timing" of your opening is critical and tied to your cash reserves. If you "hit season" - and capitalize on it -- you may make enough to carry you through part of slow season (as well as sign up EFTS and others who will contribute). If you don't - you may start off by "feeding" it for 6 months. Every slow season follows a busy and vice versa, so it all "evens out" -- but it is a critical difference in cash flow management!

Beyond the timing of these "unexpecteds", are the costs. Architects' fees you didn't anticipate, different licenses, more expensive electric or HVAC than you planned (frequent "surprise"!), getting "caught up" in the decor/buildout and spending more than you probably should, etc ......


You also need enough cash reserves to account for competitor changes. See advice #1. They won't generally "do nothing" and just let you come in and take your market. So expect them to try to do some crazy things to counteract you. If they have been there longer, they may have lower costs (maybe paying less rent, or equipment is paid off), they have a data base of known tanners they can reach out to (you are trying to find that initially, at more cost).

EVEN if you buy equipment smartly (and that is another thread), expect that opening a business will be anywhere from 100K (VERY low end, and unlikely in most markets and for most newcomers!) to 500K. I'd guess the average is about $250K anymore. Just to "break even" with cash flow, most salons are looking at $10K/month to $20K/month. That is before you pay back your initial investment, and before you make any profit.

So make sure you have ENOUGH money to do it "right" - because those who go half-way often don't make it through the first few years and lose everything they invested of their time, and money. As well as frequently their other assets, credit rating, etc.

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sunsally

Step 4 - Understand that opening a tanning salon is NOT about tanning, but rather, about the following, in the following order:

1. RUNNING A BUSINESS

2. OPERATING A RETAIL SALES ORGANIZATION

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3. Providing tanning products and services.



Think about tanning LAST. Think first about your skills in running a BUSINESS.

-Are you organized?
-Good with numbers?
-Can multi-task and juggle many different things well - including payroll, staffing, training, advertising & marketing, cleaning, technical maintenance, bookkeeping, PR, community involvement,....

If you can't do all/some of those things WELL-- are you prepared (financially) to pay someone else to do them for you? Because they must be done WELL.


How about sales? Do you understand that tanning is no longer about just opening doors to let the massive waiting crowds in to tan, but it is about SALES!

From your equipment mix, pricing options, salon layout, presentation of the salon to new clients, advertising & marketing ..... it is ALL about SALES. You need to know how to structure your environment for SALES, tailor your advertising & marketing to encourage SALES, hire and train employees for SALES, motivate and reward SALES behavior, .....

Are you PERSONALLY an outstanding SALES PERSON? Do you get a huge kick trying to SELL someone something -- anything? Are you persuasive? Relentless? Resilient (if turned down)? Do you know how to look for those traits in others you want to hire, and how to train them to be even better sales people??


Finally -- and much further down the line --- know a little about tanning. How it "works", why it feels good, how the different equipment and products you offer will lead to different results.

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sunsally

The above was for everyone, because Tan Hopes has asked the very questions that everyone new to the industry is thinking and wondering -- thanks for that!!


Now - for Tan Hopes - my "advice" would be -- read the above, and see if you feel you can adequately address each of them. If so - sure, open a salon - you have as much chance as anyone to be successful, and in fact, if you can do all of those things, probably MORE chance than most because many don't even think those things through!!!!

Just understand, that in the particular market that YOU are considering, you will have ONE competitor who already does all of those things, PLUS has the benefit of a huge organization of many years history behind them.

They will pay less for equipment than you, less for rent, less for advertising, less for buildouts, less for products, less for insurance, etc.

They will benefit MORE from their advertising dollars (one radio ad or billboard can advertise 10 stores - for the same cost) and already go in branded with very good name recognition which will create a much greater "reach" for their message.

They will have more capital, so if there were to be a "war" (and Robbie does NOT have the reputation of being a vindictive or "nasty" competitor, but not a doormat either!), they will be able to outlast you. Or, maybe the two of you will "survive" and the other operators in the market will all fold, and leave plenty for you both!


If it were me - I'd probably call and try to set up a time to meet with Robbie. There might even be an opportunity to use your customer skills experience and enthusiasm and work ethic within his organization, perhaps as a manager or regional trainer, maybe as a licensee for a new store in this market?? Might give you many of the "opportunities" to do what you see an opening for, with fewer of the risks.

Just a thought -- best of luck no matter which way you go! Keep us posted!!!

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Robbie S

I know there are many veterans out there who just loved reading TanHopes broadside attack. I must say it took me back to what I love about these boards...a good dog fight.

In this instance, as this is the Newbies board and I haven't played for a while, I'll practice a little restraint.

First, my prices. As our pricing is always a topic of interest, let me explain.

Ironically, I am usually critized for low pricing, but in this case I can't claim that I raised prices, although TanHopes believes I did (which means I need to do a better job training our staff).

We still offer $18.88 period. It will never go away. It will always be Level 1 beds at one salon only. Our new $28.88 is just a bundled price with our all-salon-access option ($4 a month- this hasn't changed either) and our new Rewards program (now $6 a month- which includes lot's of value). The total is $28.88, but you can do any or all parts of this membership. $18.88 is still very much available and still the same price and offer it always was.

As per the $ it costs to go into upgrade beds, this hasn't changed either. You can still get into level 2 beds for $4, Level 3 for $6 etc. You just have to buy a bigger package than before to get that rate. Even our lowest rates, Level 2 for $3 and level 5 for $7 are still available...you just need to purchase a bigger package to get it.

Does this mean we raised our pricing?...perhaps technically yes, but I would argue that our rates are still the same.

I will look into the "rude" complaints as I take these very seriuosly. Just call into our customer service department and you'll see how quickly we'll try to make it up to you. If you email me privately, I'll personally add a package to your account for the inconvenience.

This offer is open to SunSally as well, as her defense of my Company was very flattering and worthy of a big package. She should also be commended for her brilliantly penned- 4 steps to opening a business as she covered every base. Very well written and great advice for readers in this forum.

As to the claim, I just joined for damage control, my customers typically don't read these boards and I'm not selling anything in these forums. I have a google alert set for Darque Tan and your comments created a hit. When I read the accusations you made regarding my company, I found it necessary to set the record staright, as while you may not know me, many of the people who read these boards and who I respect in this Indusrtry, deserve to hear the truth.

No apologies necessary for "hurting my feelings". You didn't. But I would caution you going forward. If you continue to frame my company in such a negative light, I may just have to hurt yours.

sunsally

As I currently own two salons of my own and am located far from your closest market, I will respectfully and appreciatively ask Robbie S for the option to "trade" my big tanning package offer in exchange for a interview at some later date if/when I find Highline has tired of me and I'm looking for my next placement in the industry. Currently RDKJ is on my personal "short list" for that opportunity (and more proximate geographically at the moment), so in my "dream" the two of you can fight over the chance to add me to your team!

That said - the comments were not meant to be "flattery" but truth. There is a "frustration" expressed on these boards sometimes against those that are successful, as if a "chain" wasn't at one time a "Mom & Pop" (both terms I find somewhat lacking, and even disparaging). I bumped the "Leaving piles of money on the table Part II" thread and readers will see that Darque Tan started with $13K and an 8 bed salon in 1990. Times have changed, and you would be hard pressed to start for $13K anymore (time value of money though), but the point is that Darque Tan's success didn't just "happen" - it was cultivated through a series of successful business decisions.

All things equal, while other salons do and have continued to survive and even thrive in Darque Tan markets - as a newcomer my advice would be not that you can NOT open there - but don't underestimate the competition. Same reason I would look hard about opening in Sacramento. Or Louisville. Or Dallas (for a few reasons!). Or Oklahoma City. You CAN, but with strong regional players already established, you have to have your ducks WELL in a row and you may find another market has a lower "barrier to entry"!

And beyond that -- if you ARE going to open in markets that already have well established competitors -- SOME would recommend not trying to 'stir up the hornet's nest' in advance unless you have the means to back it up. With Tan Hopes' military background, I'm sure she will be able to think of many warfare equivalents that will translate to best business practices in this sort of scenario!

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