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Tankgunner95
04-16-2009, 06:46 PM
I have an opp. to go in half with a partner, in ownership with in a tanning bed business. I have been trying to think of all cost here is what I got so far.


Tanning Beds
Electric
Lease Space
Bulbs
Insurance
Payroll

I know Im missing alot of stuff, but Im wondering anyone out there in the nation could help me out and let me know if its a smart move or not?

Im sure I get some Smart A$$ answers but this is real, so I know there are alot of different people on here, curious of ideas, and thoughts, because I have never owned a business before.

SouthStndJunkie
04-16-2009, 06:48 PM
Tanning is a luxury in this economy that many people cannot afford.

Where's Plummer???
04-16-2009, 06:50 PM
dont forget youll have taxes. advertising. utilities which im sure the electric bill of a tan spa isnt cheap. i co-owned a small engine repair shop before joining the military and it was a lot more hassel than i had thought it woulda been.

Tankgunner95
04-16-2009, 06:50 PM
That was what I was thinking but the wife just came from waiting 20 for a bed at her regular spot. SO maybe $5.00 is just the right price to make you feel better about yourself.

Tankgunner95
04-16-2009, 06:51 PM
dont forget youll have taxes. advertising. utilities which im sure the electric bill of a tan spa isnt cheap. i co-owned a small engine repair shop before joining the military and it was a lot more hassel than i had thought it woulda been.

Did you make any money to speak of???

DHallblows
04-16-2009, 06:52 PM
That was what I was thinking but the wife just came from waiting 20 for a bed at her regular spot. SO maybe $5.00 is just the right price to make you feel better about yourself.

Maybe, but at the same time in 2 months it'll be free to just do it outside...

Where's Plummer???
04-16-2009, 06:52 PM
i'm not saying dont do it. by all means i like to see ppl outthere starting businesses. just dont expect it to be easy i thought it would be and it wore me down quite fast.

ya i made some pretty good money. but it was no more than my preious 9-5 job was bringing in.

strafen
04-16-2009, 06:53 PM
Location, location, location. You always want a business in an area where the flow of traffic doesn't exceed 35mph
This is the type of business you want to do a little marketing research. You want it in an afluent part of the city, a high traffic area taking into consideration convenience to potential customers; i.e, tanning availability for their lunch break, etc...

Tankgunner95
04-16-2009, 06:58 PM
Location, location, location. You always want a business in an area where the flow of traffic doesn't exceed 35mph
This is the type of business you want to do a little marketing research. You want it in an afluent part of the city, a high traffic area taking into consideration convenience to potential customers; i.e, tanning availability for their lunch break, etc...

Good Point, its 5 miles from the corvette plant and 2 miles from a school and theres not another one for 10 miles, its in a brand new shopping center, with a minute mart. Right outside the industrial park. I think I have total up cost at about .78 per visit will be cost. I just think im missing some parts, or I am over looking something. Thanks for honest remarks though, I just have a gut feeling it would do great, but scared to take that chance, that why im asking you guys??

loborugger
04-16-2009, 06:59 PM
My mother had tanning beds back in the 80s in her salon. She did nails and had the tanning in the back. The business did pretty well. My mother shut the business down cuz the marriage fell apart - she and my father were in it together. Nonetheless, it was successful.

The gym I go to has tanning in it. Whatever, I go there to work out. However, I can tell some of the folks also tan. Some other folks only tan.

What I would wonder - is tanning successful solo? Maybe if you threw in another service? Can you give a massage? A BJ? Hilarious! Just an idea...

telluride
04-16-2009, 07:00 PM
I know nothing about tanning beds and whether they're a decent business. But in an odd way your timing is good. Strip malls are desperate to get/keep clients, so you should be able to negotiate some serious below market rates. Push very hard and play one location/realtor off another.

On a similar front, be a vulture start-up: buy all your equipment used, from businesses that have/are failing.

Tankgunner95
04-16-2009, 07:02 PM
My mother had tanning beds back in the 80s in her salon. She did nails and had the tanning in the back. The business did pretty well. My mother shut the business down cuz the marriage fell apart - she and my father were in it together. Nonetheless, it was successful.

The gym I go to has tanning in it. Whatever, I go there to work out. However, I can tell some of the folks also tan. Some other folks only tan.

What I would wonder - is tanning successful solo? Maybe if you threw in another service? Can you give a massage? A BJ? Hilarious! Just an idea...

I dont like sausage, a

OBF1
04-16-2009, 07:02 PM
Do not forget the cost of inventory...Lotions and such. Add in the cost of a book keeper/CPA for tax purposes. Tons of towels and eye glasses as well as INSURANCE for those that are looking for an easy way out at your expense.

Unless you or your partner plans on working 60 hours a week you will need to hire some local talent to work with you/clean beds and wash and fold towels.

Meck77
04-16-2009, 07:07 PM
I'd ask yourself this. Are you considering this business because it's something you would enjoy doing or is it strictly a financial play. The old saying generally holds true. If you do what you love the money will follow.

Factor in the legal expenses. Make sure you and your partner have an iron clad deal. I've heard more complaints from partnerships than success stories.

Also make sure you have the cash flow to bleed money for at least a year. As SSJ this economy is pretty rough. Not sure if this is a new company or one you'd be buying into but you'll be hard pressed to get a commercial loan right now on a new business.

If I was looking to start a new company right now I'd ride the stimulus gravy train and find some government money out there. There has to be some.

Tankgunner95
04-16-2009, 07:09 PM
I read on this that you should make just as much on the lotion you sell then you do with the tanning beds themselves. Can you imagine the mark up on this!!!

Orange_Beard
04-16-2009, 07:16 PM
You will need some "security" cams, to record what's going on in the rooms.

Sodak
04-16-2009, 07:20 PM
You will need some "security" cams, to record what's going on in the rooms.

Potential extra source of revenue.

Make sure you have a good lawyer. :thumbs:

Tankgunner95
04-16-2009, 07:20 PM
I might see something you dotn wanna see remember that movie something about mary with that woman that was orange can you imagine her bucked naked. NO THANKS

enjolras
04-16-2009, 07:34 PM
I've owned several businesses (one very successful, one not so much, and the current one is looking very promising)... General advice: NEVER get into a business on a whim. Make sure you absolutely, well and truly understand the nuances of whatever it is that your getting into.

On that list your missing CPA and Lawyer fees. Just to get the business out of the ground your going to need an operating agreement (distribution of equity is one of the most complex tax issues there is, you can easily get into a situation where you owe more money than you have actual cash). Expect to shell out $5k-$15k in your first year on just legal/accounting alone... or be prepared to spend significantly more later cleaning up after the legal mess you've created.

I don't see any marketing materials in your list (business cards, printing costs for flyers, etc..). How are you going to get paid? Do you need a merchant account (are you prepared to personally guarantee those transactions? ). What about a POS terminal? What about build-out for the space?

Leases aren't generally simple. Depending on where you are at you may be asked to, again, personally secure the lease.

Payroll: Keep in mind your not just paying salary, but workers compensation and a variety of taxes/fees assessed by whatever municipality you live in. You need to get someone to write a policy (generally not terribly difficult in a retail business).

What does your credit score look like? What about your partners? Starting a business with questionable personal credit is REALLY difficult. You'll run into all sorts of trouble with things like credit card merchant accounts, leases, acquiring credit....etc...

Do you guys have enough start-up capital to fund AT LEAST 6 months of operations beyond initial fees (build-out, lease set-up fees, etc...). If you don't, your chances of failure increase markedly.

Point being, there are lots and lots of variables involved in entrepreneurship. If you can get past those, it's an incredibly rewarding thing to do (at least for me), but you have to fundamentally understand it's an investment. I personally lost nearly $50k on my second business and I consider myself lucky.

peacepipe
04-16-2009, 07:46 PM
dont forget youll have taxes. advertising. utilities which im sure the electric bill of a tan spa isnt cheap. i co-owned a small engine repair shop before joining the military and it was a lot more hassel than i had thought it woulda been.What! Is their a bussiness where you don't have to pay taxes!?

Tankgunner95
04-16-2009, 07:53 PM
I've owned several businesses (one very successful, one not so much, and the current one is looking very promising)... General advice: NEVER get into a business on a whim. Make sure you absolutely, well and truly understand the nuances of whatever it is that your getting into.

On that list your missing CPA and Lawyer fees. Just to get the business out of the ground your going to need an operating agreement (distribution of equity is one of the most complex tax issues there is, you can easily get into a situation where you owe more money than you have actual cash). Expect to shell out $5k-$15k in your first year on just legal/accounting alone... or be prepared to spend significantly more later cleaning up after the legal mess you've created.

I don't see any marketing materials in your list (business cards, printing costs for flyers, etc..). How are you going to get paid? Do you need a merchant account (are you prepared to personally guarantee those transactions? ). What about a POS terminal? What about build-out for the space?

Leases aren't generally simple. Depending on where you are at you may be asked to, again, personally secure the lease.

Payroll: Keep in mind your not just paying salary, but workers compensation and a variety of taxes/fees assessed by whatever municipality you live in. You need to get someone to write a policy (generally not terribly difficult in a retail business).

What does your credit score look like? What about your partners? Starting a business with questionable personal credit is REALLY difficult. You'll run into all sorts of trouble with things like credit card merchant accounts, leases, acquiring credit....etc...

Do you guys have enough start-up capital to fund AT LEAST 6 months of operations beyond initial fees (build-out, lease set-up fees, etc...). If you don't, your chances of failure increase markedly.

Point being, there are lots and lots of variables involved in entrepreneurship. If you can get past those, it's an incredibly rewarding thing to do (at least for me), but you have to fundamentally understand it's an investment. I personally lost nearly $50k on my second business and I consider myself lucky.

Understood and thanks great points, one thing I have on my side is I am a disable vetern, so i get a chance to go that route. When would you say you start making a profit, like how long? 6 months or a year or what do you see on your side.

dreasher54
04-16-2009, 07:53 PM
Well my dad owns a bussiness and there is so much more expenses and you are liable for everything. And you are the final say. but you work till the job is done. Im not saying not but its a lot of work.

Pony Boy
04-16-2009, 08:49 PM
I have owned a very successful small business for over 20 years. I didn't make any profit the 1st year. The next 2 years I put all my profit back into the business for improvements and expansion. The next 10 years I operated the business myself (low overhead). I now have a full time manager and trained staff. I play golf 6 days a week. When I'm ready to retire I will sell the business and walk away. The only thing I would do different is to build my own building. Once you are in an established place it difficult to move, someone can open the same type of business in your old location and take advantage of the traffic you have established. I have been lucky to have a landlord that has only adjusted my lease to cover his extra expense. I generate a lot of traffic for his strip mall so he works well with me.

tsiguy96
04-16-2009, 08:53 PM
Tanning is a luxury in this economy that many people cannot afford.

wrong. even in the times of a bad economy, people will always spend money on themselves.

Where's Plummer???
04-16-2009, 09:10 PM
What! Is their a bussiness where you don't have to pay taxes!?

i was only answering the ? idiot. he didnt include it in the list of ****. figured id throw it in.

Rabb
04-16-2009, 09:12 PM
hidden cameras

just sayin'

lazarus4444
04-16-2009, 10:44 PM
I say go for it. One thing you should do though is talk to a tanning shop owner in a nearby town and ask them about how they got into the business and what they would do different etc. Your going to need a lot of stuff, office equipment, computers, etc. etc. etc.

If you guys want a website I build business websites for free, pm me for more info.

worm
04-17-2009, 12:45 AM
Jamba Juice>tanning

SouthStndJunkie
04-17-2009, 01:27 AM
wrong. even in the times of a bad economy, people will always spend money on themselves.

There is a limit to this....if the economy gets bad enough, there are luxuries that have to be given up.

Tanning beds are a luxury where there is a much cheaper substitute....free sun.

Vegas_Bronco
04-17-2009, 01:30 AM
Hire some hot asians and pass them off as 'massage therapists' like they do down here in Vegas.

SouthStndJunkie
04-17-2009, 01:34 AM
Start a pawn shop....a very profitable business in a downturn economy.

Lots of hoops to jump through though.

footstepsfrom#27
04-17-2009, 01:40 AM
I know Im missing alot of stuff, but Im wondering anyone out there in the nation could help me out and let me know if its a smart move or not?

...I have never owned a business before.
This may seem like a simple business without much to know. Be careful of that. 80% of small businesses fail in the first 3 years and lack of business knowledge is one of the biggest reasons along with poor capitalization, so one of the smartest things you can do if you have no previous experience running a business is to get some basic business education and advice first...I said BUSINESS advice...not stuff off this forum from random posters.

When I say "basic"...I'm referring to things you can do affordably and in the short term, such as taking a few courses through a community business assistance center. Lots of them are free in fact. Once you feel like you understand some of the issues you're dealing with, spend a few bucks to get some business consulting/coaching from a business assistance strategist. You can probably spend $500 for some initial help. Talk to some other small business owners for a referral. It can save you a lot of headaches later. Here's a few things you need to do that they can help you with:

1) Doing some market research: you should have a good idea of the market where you are. Who are your competitors? How are they doing financially? (Check to see who has gone out of business) What's the profitability margin in this type of business? How long is the average salon in business? What locations are good or bad?

2) Develop a simple business plan, but one necessary for obtaining capital from a lender even if you're not planning on borrowing money. A business plan has a mission and vision statement, projections on revenues, start up expenditures, taxes, operational expenses, etc...you can find information on the web on how to develop simple business plans. For a small business like this you don't need anything that fancy but you DO need to support your plan with facts if you show it to a lender. Do NOT allow a business consultant to do this, though they can help you. You need to "own" the business plan, which means you have to work through the issues and understand your own plan. This should take you a couple of months.

3) What's your reason for wanting to do this specific type of business? Is this based on a personal interest or something else?

4) You mentioned a partner. If you are in business with a partner you need a partnership agreement, even for a small operation like this. I would advise you to have an attorney draw this up. The cost should be relatively small for something like this, maybe $300, but you need to be sure you have documentation in writing what each partner is contributing. If one is putting up money and the other managerial expertise or time spent, etc...that needs to be spelled out. How will you split expenses and revenues? Who makes decisions?

5) Do due diligence on your partner before-hand if you don't know them well. Are they financially solvent? Up to date with the IRS? Honest? Know who you're in business with and why they want you to be there with them.

6) It's a good idea to have at least 6 months of capital operating expenses in hand before you begin. Don't depend on the business making money to begin with...you'll be lucky to break even at first.

7) Build a network. Get to know some business people who can recommend you to people you'll need for help with basic stuff without charging you. Done right you can cut a lot of costs this way.

8) Develop an exit strategy. What happens when you're done? How do you get out? What kind of split is there with the partner? Work through this with your strategist as part of your business plan.

Good luck...

SouthStndJunkie
04-17-2009, 01:42 AM
Also...one big question that you have to ask yourself is....are you prepared to fail?

There is a decent chance that you will fail....it happens a lot with small businesses and an escape/fallback/alternative plan should be researched.

crazyhorse
04-17-2009, 04:52 AM
A partnership is very difficult. Because you have to be willing to let someone else run your business when you are struggling. I went into business with a partner. Within 3 years I was a sole proprieter. Of course I was in debt. Even though I knew what I wanted to do in the business I had the mistakes of my partner to pay for.

A business that can be started as cheaply as a tanning bed business should be started by a sole proprieter. That business will never support partners. It might be a supplement to your present income at best.

I strongly suggest you consider going it alone or not going at all for this particular choice. The idea of being a business owner is very romantic. The reality is very sobering and should not be an emotional decision based on what you want to do but what will work.

Your market will dictate the potential. The tanning business as a stand alone business I imagine is very tough.

Good luck with your decision.

Tankgunner95
04-17-2009, 06:17 AM
Start a pawn shop....a very profitable business in a downturn economy.

Lots of hoops to jump through though.

In all seriousness I am thinking of that also. Crazyhorse has a great point as well. I thought about that last night, if there was enough profit to have partners? Im not sure, I will have to do some more research on this. I was curious if anyone out there, had some experience and what their thought was. So thanks to everyone for the advise.

crazyhorse
04-17-2009, 06:56 AM
Consider your competition.

For example, where I live we have a beauty shop that has tanning beds. We even have a gas station/convenience store that has tanning beds, along with a shop that is a stand alone tanning salon.

The beauty shop and the convenience store both use the tanning beds as a supplemental source of income to another business. The tanning salon because it is stand alone sells swim suits, tanning lotions, costume jewelry and other assorted impulse buyer products.

The stand alone tanning salon is about to go out of business because they struggle to compete with the gas station and the beauty shop. Those two stores already pay thier payroll and operation cost of thier stores from thier primary business. making thier tanning operation so cheap to operate that the tanning salon, after paying payroll, electric, store lease, and over head cant compete from a price perspective with the other shops.

Also, I live in Arkansas. So the tanning biz is seasonal. There are lean times of the year in that business. So there are times of the seaon that business might be very good, and times where it's almost non existant.

I know it seems like I'm trying to kill your buzz on this idea. But all these variables are very applicable to your question and should not be over looked.

Persoanlly, in my market, I would not start a tanning business unless it was a supplement to an already existing business. But that's my market. Yours may be different.

Another interesting thing going on here is body painting. It's where they are taking different bronzers and literally air brushing it on. It allows you to shade different areas. For example, you can shade a womans breast to appear rounder and highlight cleavage as well as give a person more of a "six pack" look for thier abs. I know they've been doing that in the movies and in magazines for some time. But it's trickling down to the mainstream, and doing so in some of the more specialized taning salons.

crawdad
04-17-2009, 07:12 AM
I think you better think hard about the type of business with all this crapola about skin cancer and all. Tanning is down in this country. People are afraid!

Owning a small business is not all its cracked up to be. You have alot more bills and you work alot more hours! Been there for 14 years as of April 12 and although it is great working for myself..it is very challenging!

MVP-06
04-17-2009, 07:28 AM
partnership= pain in the ass.

Keep in mind that you will be splitting not only your costs, but profits, decisions, etc ... My wife tans and she pays around $30 a month for unlimited tanning. How many people do you have to see to cover your overhead? To me it seems you would have to see a ton of people to do so. Obviously you want to make $ on your investment. Tanning salons seem to need alot of customers to break even, let alone make money. Especially if splitting 2 ways

montrose
04-17-2009, 08:32 AM
I do freelance consulting, which is obviously a lot different from what you're looking into, but my family has owned a family business for 50 years. You'll hear a lot of negatives but I'd say the top two are payroll and taxes. In regards to payroll, it can be tough to pay all of that money each week. What business owners, of any size, must realize is that your employees are supposed to be assets - not costs. If your employees aren't working towards helping you make money and are instead of costing you money than either 1) you don't need that position or 2) that person isn't the right employee for the job. In your case of launching a tanning place, keep that in mind as you hire your employees. Make sure every position you hire for is essential and because you should have your pick of the lot considering the economy - you'll be able to hire people that can do the jobs well while bringing in lots of business. Per taxes, just make sure you've got plenty of money saved up to make your estimates. If you can, estimate high as you'll avoid the kick in the nads I just took this week paying Uncle Sam.

One last note, BRAND!!! You must brand your business, especially in something like a tanning salon when you have lots of other competitors. What makes your business unique? Why should people come to your salon instead of another? Things like location and price are great reasons, but if you can actually develop a story and image for your business - you'll be amazed how much that can help attract business. If you want more help in branding, let me know.

montrose
04-17-2009, 08:32 AM
I do freelance consulting, which is obviously a lot different from what you're looking into, but my family has owned a family business for 50 years. You'll hear a lot of negatives but I'd say the top two are payroll and taxes. In regards to payroll, it can be tough to pay all of that money each week. What business owners, of any size, must realize is that your employees are supposed to be assets - not costs. If your employees aren't working towards helping you make money and are instead of costing you money than either 1) you don't need that position or 2) that person isn't the right employee for the job. In your case of launching a tanning place, keep that in mind as you hire your employees. Make sure every position you hire for is essential and because you should have your pick of the lot considering the economy - you'll be able to hire people that can do the jobs well while bringing in lots of business. Per taxes, just make sure you've got plenty of money saved up to make your estimates. If you can, estimate high as you'll avoid the kick in the nads I just took this week paying Uncle Sam.

One last note, BRAND!!! You must brand your business, especially in something like a tanning salon when you have lots of other competitors. What makes your business unique? Why should people come to your salon instead of another? Things like location and price are great reasons, but if you can actually develop a story and image for your business - you'll be amazed how much that can help attract business. If you want more help in branding, let me know.

FYI - My first post not in the the breakup thread since I launched it! :strong: