Thinking of starting a tanning salon business?

A tanning salon can be a lucrative business, and even after the concerns surrounding UV exposure, indoor tanning still continues to grow to become even more popular than ever.

While the tanning salon industry is among those most heavily affected by the novel Coronavirus pandemic between 2020 and 2021, it is expected to make a steady growth over the next five years amid the rebounding consumer spending.

Not to mention, when compared to opening a hair salon (including a barbershop), beauty salon, or even a nail salon, opening a tanning salon – whether with sunrooms or solariums – is way simpler, and with a lower barrier of entry.

With that being said, starting a tanning salon is definitely a lucrative business opportunity with high profitability potential, and in this guide, we will learn how to open and run a successful tanning salon business in 2024.

By the end of this guide, you’d have learned about:

• Why start a tanning salon?
• What makes a good tanning salon business?
• How much does starting a tanning salon cost?
• How do you attract clients and stand out among the competitors?
• How to grow and expand your tanning salon business?

Let’s start this guide right away.

Tanning Salon: Industry Overview

In the U.S. and many countries all around the world, the tanning salon industry comprises companies that provide indoor tanning services via UV solariums (tanning beds) and sunrooms (tanning booths) and also businesses offering spray-on tanning services.

It’s also common for tanning salon businesses to offer complementary services like nail services, hair cutting and styling, and even fitness centers, among others.

As mentioned, starting a tanning salon on its own is relatively simpler compared to a beauty salon, hair salon, or nail salon due to a few important advantages:

• Lower skill/experience requirements: you need to have the skills and experience to offer a haircut in a hair salon/barbershop (or hire an experienced hairstylist), but that’s not the case with a tanning salon where you’ll ‘only’ need to operate the training bed or booth. With lower talent requirements, and for a smaller salon, you can get away with just one operator/administrator handling all the clients’ needs.
• Smaller space needed: it’s possible to open a one-bed tanning salon with only around 350 sq ft of space, while to open a decent hair salon, you’ll need at least 1,000 sq ft of space. Obviously, the need to rent/purchase a large space will also translate into higher startup capital.
• Simpler legal requirements: opening a tanning salon is much simpler from the legal requirements point of view than opening a beauty salon. You don’t need to own too many permits and licenses as you’d need to operate a beauty salon, and there are also fewer insurance requirements.

With the lower overall barrier of entry, starting a tanning salon may be a more attractive option for business owners who’d like to enter the beauty and wellness niche but don’t want to commit a high amount of startup capital and/or don’t have the required certifications, skills, and experiences to start a beauty salon or hair salon.

Opening a Tanning Salon Business: Step-By-Step Guide

Step 1: Planning a Tanning Salon: Market Research, Competitive Analysis, and Feasibility Studies

Before you commit to actually starting a tanning salon business, you’ll need to answer three key things:

1. Is there a sizable market for a tanning salon in the area?
2. What does the competition look like? Are there any tanning salons in the area?
3. How can you beat the competition and win the market?

To answer these questions, you’ll need to conduct proper market research, competitive analysis, and feasibility studies.

Market Research

Your market research should focus on determining:

• Who is your target clientele?
• All the necessary information about this target clientele: demographics data, behavior, online activities, where they currently take tanning services, and so on

• Where should you start the tanning salon to target this target clientele?
• How should you design a tanning salon that can meet this target clientele’s expectations?
• What types of services will you provide in your tanning salon?

Competitive Analysis

After you’ve determined who your target clientele is and what types of services (tanning only, spray-tan, other services) you are going to provide in your salon, then you can perform a competitive analysis to determine:

• Who are your direct and indirect competitors in the area?
• What types of services are they providing?
• How do they approach their pricing strategy?
• What are their Unique Value Propositions (UVPs)?
• What are their weaknesses?

Feasibility Study

Based on the results of the market research and competitive analysis, you can conduct a full feasibility study to determine four key aspects of your business:

1. Technical feasibility: determining whether you have the technical resources (i.e., manpower) to start and run a tanning salon that can win the competition in your area.
2. Economic feasibility: whether you’ll have the financial resources (or can acquire the funding) to start and run the tanning salon business.
3. Legal feasibility: whether there’ll be any aspects of the tanning salon project that may not meet the legal requirements in your area. (We’ll discuss the legal and compliance requirements of starting a tanning salon again further below in this guide.)
4. Operational feasibility: whether you’ll have the overall capabilities to fulfill the day-to-day operations of your tanning salon.

Why is a proper feasibility study important? By performing a feasibility study analysis, you can:

• Improve the focus of your tanning salon project to meeting your goals
• Identifying potential opportunities that you might not have explored when planning your tanning salon
• Giving you more valuable insights and information to make better business decisions
• Identifying any potential obstacles before starting the project

In short, the feasibility study will ultimately prepare you to successfully start and run the tanning salon.

Step 2: Decide whether to buy a franchise or start your own salon

When it comes to starting a tanning salon, you have two basic options: to start your own salon from scratch or buy a franchise.

If you are based in the U.S., there are many reputable tanning salon franchises you can choose from, like The Palms Tanning Resort and iTAN, among others.

By purchasing these franchises instead of building your own salon from scratch, you can leverage the franchise’s good reputation and marketing resources instead of having to identify and attract your own clientele.

Depending on the franchise, the franchisee may do everything for you, like setting up the location, training your employees, and purchasing/setting up equipment, so on your end, the whole process will be very simple.

However, it’s typically more expensive to buy a franchise than to start a salon, and – not to mention –  you’ll get more freedom in branding your tanning salon and shaping the business as you see fit by starting from scratch.

You may also want to note that the majority of the successful tanning salons were started from scratch, so in most cases, starting your own tanning salon will pay you in the long run.

Step 3: Create a Comprehensive Business Plan

Although this step is not a must, we’d recommend writing a comprehensive business plan for your tanning salon.

This is especially an important step if you are planning to use outside funding (third-party investment, bank loans, etc.) to fund the tanning salon business since you’ll typically need a well-written business plan to secure business loans.

However, even if you are going to fund the salon by yourself, having a well-written business plan will also be useful in providing a clear roadmap to success for your salon business.

You can use the following format/structure for your tanning salon business plan:

1. Executive Summary

The first and often the most important section of any business plan.

There will be many readers who will only read this section before deciding whether the rest of the business plan is worth reading, so make sure it’s well-written and optimized.

The executive summary should include:

• The tanning salon’s business vision and mission
• The purpose of starting the tanning salon business
• What kinds of services will be provided and their prices
• What kinds of products will be sold in your salon
• Marketing and promotion plan
• Plans for growth and monetization

The executive summary section will be a summary of the other following sections in the business plan, so we’d recommend writing this section last once you’ve finished polishing the next sections.

Although this section is important, keep it short, not more than 10% (ideally 5%) of the whole business plan’s length.

2. Company Overview

Also called business overview or company analysis, this section should contain the basic details of your tanning salon business, including but not limited to:

• Purpose
• Vision and mission
• Short term and long term goals
• Services and products offered (with price)
• Target clientele
• Unique Value Proposition

Your Unique Value Proposition (UVP) is essentially your tanning salon’s competitive advantage: what makes your salon unique from direct and indirect competitors in your area, and how you can win the competition.

3. Industry and Market Analysis

Use the results of the analysis and feasibility study we’ve discussed in the previous step in writing this step.

Again, in this section, you should elaborate:

• Who is your target clientele?
• All the necessary information about this target clientele: demographics data, behavior, online activities, where they currently take tanning services, and so on

• Where should you start the tanning salon to target this target clientele?
• How should you design a tanning salon that can meet this target clientele’s expectations?
• What types of services will you provide in your tanning salon?

You should also elaborate on how you are going to design and build your hair salon business based on the insights you’ve collected.

4. Sales and Product Plan

While when compared to a hair salon or beauty salon, there are fewer types of services offered in a tanning salon, there are still quite a few varieties:

• Standard UV tanning services
• Spray-on tanning services
• Airbrush tanning services
• Body contour tanning services

It’s also possible for a tanning salon to offer complementary services such as nail services (manicure, pedicure, etc.), haircut, health spa, and even a fully-fledged fitness center.

Use this opportunity to determine what kinds of products (tanning-related or otherwise) you’d sell in your tanning salon, and elaborate it in detail in this section.

5. Marketing Plan

This section should cover how you plan to market and promote your tanning salon business, including reiterating the details of the services and products you are going to offer and their unique value(s).

In this section, you should also discuss in detail the pricing strategy for your products and services while elaborating your marketing strategy.

6. Management Team

This section should discuss your tanning salon business’s organization and management strategy. List your leaders with their qualifications, and describe their responsibilities. If applicable, you may also want to include the legal structure of your tanning salon business.

7. Operations Strategy

This section should discuss in detail how you plan to run your salon business, like:

• Your opening hours
• Your location(s)
• How you plan to expand the business over time
• The kind of employees the business will need

8. Design and Development Plans

Your tanning salon business’s concept. Elaborate on why you choose this specific design and how you are going to turn this concept into reality.

9. Financial Plan

Elaborate on how much funding you’ll need to start the hair salon business and how the money is going to be spent. You should also include detailed explanations of the key financial assumptions used in developing the business plan.

The financial plan section should discuss the development of your tanning salon business’s revenue and profitability model: how you plan to generate income and get paid from clients.

10. Appendix

You should include a full set of financial projections in the appendix. For a tanning salon business as a brick and mortar business, you can also include technical drawings, as well as other documents like customer lists and extensive competitor analysis.

Step 4: Finding an ideal space

As a brick-and-mortar business, finding the perfect space is one of, if not the most important factors that will influence the tanning salon’s success.

With that being said, choosing the ideal space for your tanning salon can be easier said than done, but here are some key factors to consider when evaluating different options:

• Location. Pretty self-explanatory. When choosing a space for any business, location is the most important thing to consider first. Evaluate foot traffic; you’d want a location that is near enough to your target clientele yet doesn’t have too much direct competition nearby.
• Space. Fortunately, you won’t need a very large space to start a tanning salon business, and you can start a one-bed tanning salon service with around 350 sq ft in space. However, you’ll need more space if you are planning to add more beds, booths or offer complementary services.
• Surrounding businesses. Other businesses in the area can dictate foot traffic. If the space is located near a busy office, for example, the employees of the said office may visit the tanning salon after work.
• Visibility. As a beauty and wellness business, it’s not always a good idea to have a very visible location, and you may want to consider:
  • Type of client: if your target clientele values privacy (i.e., with a by-appointment model), a less visible location can be a better choice and may help make your salon more exclusive
  • Marketing strategy: if your marketing relies on foot traffic, then you should choose a location that is more visible.
• Applicable regulations. You might want to visit the town hall or relevant organizations in your area to find out what regulations may impact the specific space. Your building owner (if you are renting the space) may also have additional policies you’ll need to follow.

Last but not least, you should evaluate the cost of renting/purchasing the space. Spaces located in premium locations will obviously be more expensive, so it’s crucial to first identify a budget that works well for you (if you’ve completed your business plan beforehand, this shouldn’t be an issue).

Step 5: Figuring out the finances

How much does it cost to start a tanning salon?

Obviously, the answer to this question can vary a lot depending on many different factors, but here are the general items you should plan for:

• Interior and decoration: will vary depending on building materials and designs, they can range between $500 and $3,000 per room.
• Electrical installation: if the location is already set up properly, then you may not need to spend anything. However, you may need to negotiate with the landlord and be prepared to spend $5,000 upwards.
• Furniture and lighting: will depend on the space’s size and how many beds you’ll have, but you may need to prepare between $5,000 and $30,000
• Tanning equipment: base tanning beds will cost you around $4,000 (you may get used ones starting from $1,000.) Stand-up beds can cost $20,000, and modern high-pressure beds can cost $30,000 upwards.

As you can see, you may need at least $100,000 in startup capital and an additional $30,000-$50,000 for ongoing expenses.

Supplies and ongoing operational expenses may include:

• Electricity costs
• Tanning lotions
• Employee uniforms
• Advertising costs

Based on your budget, plan your pricing strategy accordingly to stay profitable.

Step 6: Building a strong digital presence

Today, if you are not visible online, essentially, your target clientele doesn’t know you exist. Focus on building a strong online presence in four key areas:

1. Professional website

With platforms like Wix and Squarespace, among others, it’s now very easy and affordable to build your own professional website, so there’s simply no reason not to have one.

Make sure your tanning salon website is well-designed, mobile-friendly, loads fast, and contains all the important information about your spa, including available services and prices if applicable.

2. Online booking and appointment

Today’s consumers simply expect reliable, easy-to-use online bookings, and you should also consider the fact that many would prefer to use online booking software to book your salon services outside business hours.

Integrating 24/7 online appointment scheduling software to your website, app, and Google Maps listing is crucial if you want to maximize bookings and grow your tanning salon business.

Choose a salon appointment scheduling software solution that supports Reserve With Google, so you can easily allow prospective clients to book your service from your Google Maps listing, as well as your website.

3. Google Maps SEO

Prospective clients will Google “tanning salon near me”, “salon in (city name)”, or other queries when they are looking to book a salon service. In fact, this is one of the main ways people learn about local businesses besides social media (i.e., mentions from influencers.)

Meaning, if your tanning salon doesn’t appear on the results for these queries, you won’t get noticed by potential clientele. You’ll need to optimize your presence on Google Maps, and you can do it by:

• Claiming and verifying your Google My Business listing
• Optimizing your listing, focus on providing complete and accurate information for your prospective clients. You can optimize for keywords, but make sure to do so naturally.
• Encourage (positive) reviews from your clients, mainly on Google Maps but also on relevant review sites like TripAdvisor.
• Build local citations by listing your salon business on relevant online directories

4. Social media

In this social media age, it’s only obvious to promote your tanning salon business on social media.

• Create and optimize profiles on relevant social media networks
• Create a social media marketing plan to invest in relevant paid social media advertising

• Reach out to relevant influencers so they can help promote your brand
• Run contests and giveaways

Conclusion

While starting a tanning salon can be a lucrative business opportunity, you’ll still need careful market analysis and planning if you really want to achieve success.

In this guide above, we’ve shared some of the most important steps and actionable tips you can use in order to start and run a successful tanning salon business and achieve success.

By following the actionable tips we’ve shared above, you are ready to plan and set up your successful tanning salon business and achieve success in 2024 and onwards.