Opening During Recession

Starting a tanning salon business during an economic recession sounds like a daunting task, but major businesses have flourished during rough times. Hyatt, Burger King, IHOP, FedEx, Microsoft, and Trader Joe’s all started during an economic downturn. Businesses that are geared to fill a hole in the market, or streamline business operations tend to come out ahead. Of course during a recession, entrepreneurs should take some extra precautions like creating feasible business plans and making careful projections.

One of the biggest advantages of starting a business during a recession is the fact that you can get good deals on leasing business spaces. “According to Grubb & Ellis, the average retail rental rate was up 1.7% in 2007, but is showing a big decline in rental rates- some instances as low as 10%, with a forecast for even lower rates (Articlesbase).”

Sometimes just opening a business makes more sense than standing in an unemployment line. If you could find the capital to open, you could be well on your way to a successful business.

Sources:
http://www.insidecrm.com/features/businesses-started-slump-111108/
Articlesbase – http://www.articlesbase.com/business-articles/great-deals-in-the-market-on-office-leasing-in-todays-economy-787810.html

Keep Customers By Keeping Your Tanning Salon Clean

If you had the choice to tan at a messy salon and the clean salon down the street, which tanning salon would you tan in? One of the most major concerns customers have at a tanning salon is whether or not the salon is kept clean. Basic cleaning is required to keep customers from feeling that the salon is dingy and unkept. Seeing a tanning salon with dirty windows, and lotion splatter on the walls in a tanning room makes the impression and assumption that perhaps the tanning beds aren’t being sanitized properly. A little salon cleaning and maintenance goes a long way in helping make customers feel comfortable and will help retain their confidence in your services.

Customers know that just because a tanning bed has a “this bed has been sanitized” sign laying on it, does not mean it has been properly sanitized. Tanning bed cleaner such as Lucasol is widely used in the tanning salon industry. Lucasol is a hospital grade cleaner that is also known to disinfect HIV. But, if the product is not being used in accordance with the instructions on the label, then it’s possible that the tanning bed is not being sanitized properly. Lucasol is a concentrate and paying special attention to how much Lucasol is being mixed with water, and paying attention to the instructions on the label, is of utmost importance.

Cleaning the acrylics, with tanning bed cleaner such as Lucasol, on your tanning beds is one thing, but it’s also a must to remove hair from under the acrylic, clean air vents, and clean the tops of the tanning bed when you are doing your regular tanning bed maintenance. Keeping the whole tanning bed clean gives a better impression of the overall cleanliness of the tanning salon. In addition, cleaning the vents, filters, lamps, and ballasts will also keep the tanning bed in tip-top shape keeping the tanning bed from that extra wear-and-tear.

Aside from the tanning beds, keeping the rest of your salon clean helps keep customers stay confident in your tanning salon. As I mentioned before, tanning lotion splatter is unappealing and dirty. It’s also tough to clean if it isn’t cleaned up quickly. Having the tanning salon attendant pay attention, not just to cleaning the tanning bed, but to the floor and walls after a customer tans can also help from this unwanted detraction.

Creating a check list helps keep the tanning salon clean. Clean bathrooms, mirrors, floors, windows, counter-tops, lotion displays, all help with keeping customers happy and feeling like the salon they are visiting is in the best shape it can be. A squeaky clean salon gives a positive impression for customers leading to greater retention.

Tanning Salon Advertising Mediums

What kind of marketing do tanning salons use? There are various forms of advertising all of which can help increase traffic to your tanning salon. Whether you are a startup tanning salon business, or an established tanning salon, it is important to keep your tanning salon’s name out in the public for people to see. The more interest you keep out there, the more traffic you are likely to see.

The main types of advertising tanning salons usually adopt are newspaper ads, television ads, direct mail, radio ads, and websites. There are various ups and downs to each of these types of tanning salon marketing campaigns.

Newspaper ads are typically flexible and timely. Newspaper advertising is perfect for tanning salons located in smaller cities where a customer on any side of town might decide to go to your business. Newspapers provide customers with a good sense of believablity. The downside to newspaper advertising is that once the public reads the newspaper, it is basically thrown into the trash. There is no residual advertising and people do not tend to pass these type of ads around to friends. Look to small local publications in addition to the main newspaper in your city. These tend to have better pricing, but not as high a circulation.

Television ads offer a good way to quickly get your tanning salon noticed with mass market coverage. TV advertisements offer good pricing per exposure and appeals to target audiences with careful time slot planning. TV ads can be expensive to produce, however. Contact your local cable provider to see if they offer local television advertising slots.

Direct mail is an excellent way to get your advertising into the hands of potential tanning salon customers. You can be selective as to who receives your direct mail by buying lists and mailing to certain zip codes, or people who have signed up for other services that are similar to that of a tanning salon. Depending on how many pieces are designed, printed and mailed, prices may vary.

Radio ads offer a wide audience. You can be selective as to which radio stations air your advertising and what time they air, targeting specific audiences. Tanning salons tend to do fairly well with radio advertising in the pop genre. The only down to radio advertising is that people tend not to pay as much attention to the ads, so it is extremely important to have an advertisement that appeals to the target audience and sticks out from the rest of the ads.

Door hangers, and leaflets are another great, low-cost way to advertise your tanning salon. You can market your salon to select audiences. Hanging advertisements on the handle of people’s doors puts the advertisement right in their hands. Apartment complexes are excellent for leaving this type of advertising because of the high density of people. Leaving leaflets on cars in parking lots is another good way to get advertising in people’s hands. The only downside to using either of these is that people may find this type of advertising annoying.

Advertising your tanning salon is extremely important, whatever method you decide on. Once you have a general idea of what you want to do, call around locally and see what kind of prices, offers, and other ideas you can get from marketing agencies. You want to increase traffic to your tanning salon and marketing is an essential way to do so.

Editor’s Note: Check with your local government prior to using marketing tactics such as placing leaflets on cars and hanging advertising on door handles, as permits may be required.

Pros and Cons of a Tanning Salon Franchise

As you know, there are pros and cons to almost everything in business. That remains true when opening a new tanning salon and having to decide whether or not to build a salon from the ground up, or buying in to a franchise. These Pros and Cons outlined below should help distinguish between the major differences between a franchise and a non-franchise tanning salon startup.

PROs:
1. A strong Franchise name.
2. A Business in a Box theory (pay a total opening price for equipment, software, product).
3. Receive training, marketing and other support on a continual and ongoing basis
4. Offered products or equipment that might be exclusive to just the franchise.
5. Support in business design and layout and location scouting.
6. The level of quality customers receive from each franchise store would be the same.
7. Franchise purchasing power. Buying products and or equipment in larger quanities, can lead to better and deeper discounts.

CONs:
1. Higher Start-Up Cost. Franchises will have a list of equipment that they feel is correct for your location and or business, this will lead to more out of pocket expense.
2. You are required to share your banking and profit information. You also conform to uniform operating procedures.
3. Every year you will need to make royalty payments for using the franchisor name. Every month you will make payment to franchisor for a percentage of the profit you made. This sometimes can be up to 15% of gross sales. Your monthly or yearly payment amount is still due if business is slow.
4. No protected territory for your business. Franchisor has the right to put locations where they feel is profitable, unless otherwise stated in your agreement.
5. Most franchises are held to a long-term, 10-20 year commitment.
6. Some franchise may not be known or popular in your state or city.
7. You are more of a manager than an owner. Being a franchisee places many aspects of your business in the franchisor’s hands.

Choosing the Right Lease

Many companies lease or finance equipment without considering the differences in expense deduction methods between a true lease or loan. It’s only after year-end when tax time arrives that they find out the type of lease or financing they chose did not maximize their possible deductions for that and future years.

The end of lease residual or purchase option is the primary factor that determines the tax handling of your lease. Every for-profit company in the U.S. has an amount of capital equipment they can purchase each year that can be fully expensed under I.R.S. Section 179.

If your company has not exceeded the annual limit, then a finance lease with a $1.00 residual may be the choice for you. On the other hand, if you have met your maximum capital purchase deduction for the year or regularly do so, you may want to choose a true lease with a fair market value residual or purchase option not less than 10% of the original equipment price. Since the total monthly payments of a true lease are normally expensed each year, you may be able to accelerate your equipment depreciation if the lease term is less than the term required to depreciate the asset under it’s classification. You will also save in the accounting costs associated with creating and managing depreciation schedules.

Another important factor in choosing your lease is weighing the benefits versus disadvantages between longer and shorter terms. Longer terms can provide for lower monthly payments and increased annual cash flow for revenue producing assets. The main disadvantage to longer lease terms is the higher balance you will have to pay off if you want to trade out of the equipment or buy-out the lease early for any other reason. If the equipment you are getting does not retain it’s value, depreciates in value quickly, or regularly becomes obsolete, it may be wise to choose a shorter term.

This article was contributed by Corky Downing of Lease Process.

A Few Notes for a Startup Tanning salon

Everyone opening a new tanning salon needs assistance and guidance for a successful beginning. Having the right mix of equipment is what will set you apart from your competition. And, it is important to select and stock the best selling tanning lotions in order to be competitive and maximize revenue. But, what is needed before you open up a tanning salon?

Demographics are a BIG part of the tanning salon business. Can you get the right customers through your door to keep the salon afloat? There are various ways you can find demographics for your area. One of the easiest is just to Google for your area like this: “Los Angeles Demographics.” This is important so that you know that the area you are looking to open a tanning salon at is not comprised of, for example, 90% males. Although males tan, there are not as many male tanners as there are female, so you are not likely to have high traffic in a situation like this. Use common sense when looking at this data.

It is important to figure out what regulations your local government (city and state) has set for tanning salons and service based businesses. This varies widely and some people might not find it an ideal situation in their locality. Checking with your local board of cosmetology could help figure out this information, as certification may be necessary.

Aside from tanning beds and lotions, you need to find a space that you can lease to operate your business. It is important to find a space in a shopping center that already has a good number of people who visit. Most tanning salons tend to do well in shopping centers that are anchored by a grocery store. Grocery stores typically provide the traffic and the right demographic for a tanning salon business.

Tanning salons are typically about 150 square feet per room. So, if you want to have a salon with 10 tanning beds, you’ll need a space that is at least 1500 square feet. Of course, this is only an average so don’t go building 150 square foot rooms! You’ll need a bathroom, waiting area, laundry room, front desk, etc., to go in the salon too!

When you’re looking for a space to lease, ask the leasing agent about the air conditioning system. Tanning salons need at least one ton of air conditioning per tanning bed depending on your area’s weather. If the air conditioner in the space you are looking at doesn’t provide this, see what the leasing agent can do to initiate an upgrade.

There are many other things that go into opening a tanning salon, but hopefully this gets you started.