Do you want to start men’s salon business?

Do you want to start a tanning salon? Well, about one-third American population go to salons for tanning their skin so you will not be at loss after starting this business. Tanning business yields an immense profit but it requires proper planning as well as a lot of effort for its startup. Besides obtaining a license, you will have to buy medical equipment and machinery along with hiring experienced tanning experts.

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However, the first thing you must do before starting this business is to create a detailed and effective business plan. In case you don’t know how to write a business plan, you can take help from the sample tanning salons business plan  available online or this sample plan of a tanning salon startup ‘Suntan Salon’.

Executive Summary

2.1 The Business

Suntan Salon will be a licensed and registered tanning salon which will provide high-quality tanning service. The business will be started in a leased building in Manhattan, New York.

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2.2 Management

Suntan Salon will be owned by Jack Andrew, who currently runs a pharma products business. Being associated with the pharma industry, Andrew knows how to start a tanning salon and operate it efficiently.

2.3 Customers

Our customers will initially be the residential community-based in Manhattan. We will offer different packages with different exposure times as per their choice.

2.4 Business Target

Our business targets to be achieved within the next three years are as follows:

Tanning Salon Business Plan - 3 Years Profit Forecast
Franchise Business Planning 
Helps the franchisee get business case approval from the franchisor

Company Summary

3.1 Company Owner

Suntan Salon will be owned by Jack Andrew who is a wealthy businessman famous for his pharma products companies. Being associated with the pharma industry, Andrew is well aware of all health regulations related to this precarious work and has also hired medical experts for his venture.

3.2 Why the Business is being started

Andrew has been interested in healthcare-related businesses since the start of his career and due to his vast field experience, he knows how to start a tanning salon business. In addition to that, he aims to make a profit in this domain by providing unparalleled tanning services.

3.3 How the Business will be started

Suntan Salon will be started in Manhattan in a leased building featuring spacious air-conditioned rooms, wide reception space, a conservatory, a waiting room and four bathrooms. In addition to the usual inventory, the company will purchase air conditioned climatronic controlled aromatherapic tanning beds installed with high powered tanning lamps and music system. The startup costs are as follows:

Tanning Salon Business Plan - Startup Cost

The detailed startup requirements are given below:

Start-up Expenses 
Research and Development$42,750
Expensed Equipment$42,750
Start-up Assets$0
Cash Required$322,500
Start-up Inventory$52,625
Other Current Assets$222,500
Long-term Assets$125,000
Total Requirements$245,000
Start-up Expenses to Fund$121,875
Start-up Assets to Fund$195,000
Non-cash Assets from Start-up$118,750
Cash Requirements from Start-up$0
Additional Cash Raised$118,750
Cash Balance on Starting Date$121,875
Liabilities and Capital$0
Current Borrowing$0
Long-term Liabilities$0
Accounts Payable (Outstanding Bills)$0
Other Current Liabilities (interest-free)$0
Planned Investment$0
Investor 1$312,500
Investor 2$0
Additional Investment Requirement$0
Loss at Start-up (Start-up Expenses)$313,125
Total Funding$265,000
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    Products and Services

    Your tanning salon business plan must include the services you are going to provide to your customers. You should devise your services’ plan keeping in mind that you have to survive in a competitive environment where there are many similar businesses in the market. After you have decided what services will you provide, you can train your staff accordingly such as training them on how to operate the tanning machines or how to start a tanning bed.

    Suntan Salon will provide the following services to its customers:

    • 10 Minutes Tan: We will provide a 10 minutes tan service for the who don’t want to get exposed to Ultraviolet rays for long. This tan will last for a fortnight or a month and is fairly lighter as compared to the other package.
    • 25 Minutes Tan: We will provide a 25 minutes tan service people who want to get a strong shade and are strong enough to endure slightly long-term exposure to rays. This tan will last for more than 2 months and will give them a darker look.
    • Tanning Lotion: We will also sell tanning lotion needed after a person gets tanning service. This is to facilitate our customers so that they don’t have to go and buy tanning lotion for themselves.

    Our customers can make a reservation with us by visiting our salon or through our official website.

    Strategy and Implementation Summary

    When you know how to open a tanning salon business, the next step is to define an effective strategy for business to attract and gain more customers.

    5.1 Competitive Analysis

    Our biggest competitive advantage will be the friendly-environment and comfort that we will provide to our customers. Furthermore, we will make sure to keep our salon and tanning beds in a clean, spotless state.

    Our second biggest competitive advantage will be our exceptional customer healthcare service. We will make sure that our customers get only that tan exposure which will suit their skin and doesn’t affect their health. Besides, we’ll use the latest and best-in-class machines for our services.

    5.2 Sales Strategy

    After carrying out a detailed analysis, we came up with the following ideas to advertise and sell ourselves.

    • We will advertise our tanning salon through social and mass media.
    • We will provide discount on customer referrals.
    • We will offer a 15% discount on our services for the first month of our launch.

    5.3 Sales Forecast

    Tanning Salon Business Plan - Unit Sales
    Sales Forecast   
    Unit SalesYear 1Year 2Year 3
    10 Minutes Tan1,887,0302,680,3202,588,240
    25 Minutes Tan802,370815,430823,540
    Tanning Lotion539,3207702301,002,310
    TOTAL UNIT SALES3,228,7204,265,9804,414,090
    Unit PricesYear 1Year 2Year 3
    10 Minutes Tan$140.00$150.00$160.00
    25 Minutes Tan$600.00$800.00$1,000.00
    Tanning Lotion$700.00$800.00$900.00
    10 Minutes Tan$2,149,800$2,784,000$3,383,200
    25 Minutes Tan$120,050$194,500$268,500
    Tanning Lotion$50,110$71,600$93,000
    Direct Unit CostsYear 1Year 2Year 3
    10 Minutes Tan$0.70$0.80$0.90
    25 Minutes Tan$0.40$0.45$0.50
    Tanning Lotion$0.30$0.35$0.40
    Direct Cost of Sales   
    10 Minutes Tan$989,300$1,839,000$2,679,700
    25 Minutes Tan$66,600$119,900$173,200
    Tanning Lotion$17,900$35,000$52,100
    Subtotal Direct Cost of Sales$1,294,100$1,699,400$2,104,700

    Personnel plan

    The personnel plan of our tanning salon business is as follows.

    6.1 Company Staff

    We will initially hire the following people:

    • 1 Manager for managing all operations in the salon
    • 1 Accountant for maintaining financial and other records
    • 3 Tanning experts for attending the customers
    • 3 Assistants for helping the experts
    • 1 Technician for maintaining our machines
    • 1 Receptionists for interacting with customers and recording their orders

    All the employees will be hired by following strict testing procedures and will also be trained before onboarding.

    6.2 Average Salary of Employees

    The following table shows the forecasted data about the salaries of the employees for the first year.

     Personnel Plan   
     Year 1Year 2Year 3
    Tanning Experts$550,000$650,000$750,000
    Total Salaries$962,000$1,096,000$1,230,000

    Financial Plan

    The financial plan covers all the expenses needed for the startup of a business so you must develop it before laying the base for a new business. To maximize your tanning salon profit, you must formulate a thorough financial plan covering all the costs of inventory, equipment, tanning machinery, payroll, rent, etc. You can take help from this sample business plan for a general idea but it is recommended to take guidance from a financial expert if you need accurate figures.

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    7.1 Important Assumptions

     General Assumptions   
     Year 1Year 2Year 3
    Plan Month123
    Current Interest Rate10.00%11.00%12.00%
    Long-term Interest Rate10.00%10.00%10.00%
    Tax Rate26.42%27.76%28.12%

    7.2 Brake-even Analysis

    Tanning Salon Business Plan - Brake-even Analysis
     Brake-Even Analysis 
    Monthly Units Break-even5530
    Monthly Revenue Break-even$159,740
    Average Per-Unit Revenue$260.87
    Average Per-Unit Variable Cost$0.89
    Estimated Monthly Fixed Cost$196,410

    7.3 Projected Profit and Loss

     Pro Forma Profit And Loss   
     Year 1Year 2Year 3
    Direct Cost of Sales$15,100$19,153$23,206
    TOTAL COST OF SALES$15,100 $19,153 $23,206
    Gross Margin$293,969$366,781$439,593
    Gross Margin %94.98%94.72%94.46%
    Sales and Marketing and Other Expenses$1,850$2,000$2,150
    Leased Equipment$0$0$0
    Payroll Taxes$34,510$40,726$46,942
    Total Operating Expenses$188,766$220,744$252,722
    Profit Before Interest and Taxes$105,205$146,040$186,875
    Interest Expense$0$0$0
    Taxes Incurred$26,838$37,315$47,792
    Net Profit$78,367$108,725$139,083
    Net Profit/Sales30.00%39.32%48.64%

    7.3.1 Profit Monthly

    Tanning Salon Business Plan - Profit Monthly

    7.3.2 Profit Yearly

    Tanning Salon Business Plan - Profit Monthly

    7.3.3 Gross Margin Monthly

    Tanning Salon Business Plan - Gross Margin Monthly

    7.3.4 Gross Margin Yearly

    Tanning Salon Business Plan - Gross Margin Yearly

    7.4 Projected Cash Flow

    Tanning Salon Business Plan - Projected Cash Flow
     Pro Forma Cash Flow   
    Cash ReceivedYear 1Year 2Year 3
    Cash from Operations   
    Cash Sales$40,124$45,046$50,068
    Cash from Receivables$7,023$8,610$9,297
    SUBTOTAL CASH FROM OPERATIONS$47,143 $53,651 $59,359
    Additional Cash Received   
    Sales Tax, VAT, HST/GST Received$0$0$0
    New Current Borrowing$0$0$0
    New Other Liabilities (interest-free)$0$0$0
    New Long-term Liabilities$0$0$0
    Sales of Other Current Assets$0$0$0
    Sales of Long-term Assets$0$0$0
    New Investment Received$0$0$0
    SUBTOTAL CASH RECEIVED$47,143 $53,651 $55,359
    ExpendituresYear 1Year 2Year 3
    Expenditures from Operations   
    Cash Spending$21,647$24,204$26,951
    Bill Payments$13,539$15,385$170,631
    SUBTOTAL SPENT ON OPERATIONS$35,296 $39,549 $43,582
    Additional Cash Spent   
    Sales Tax, VAT, HST/GST Paid Out$0$0$0
    Principal Repayment of Current Borrowing$0$0$0
    Other Liabilities Principal Repayment$0$0$0
    Long-term Liabilities Principal Repayment$0$0$0
    Purchase Other Current Assets$0$0$0
    Purchase Long-term Assets$0$0$0
    SUBTOTAL CASH SPENT$35,296 $35,489 $43,882
    Net Cash Flow$11,551$13,167$15,683
    Cash Balance$21,823$22,381$28,239
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    7.5 Projected Balance Sheet

     Pro Forma Balance Sheet   
    AssetsYear 1Year 2Year 3
    Current Assets   
    Accounts Receivable$12,613$14,493$16,373
    Other Current Assets$1,000$1,000$1,000
    TOTAL CURRENT ASSETS$201,259 $237,468 $273,677
    Long-term Assets   
    Long-term Assets$10,000$10,000$10,000
    Accumulated Depreciation$12,420$14,490$16,560
    TOTAL LONG-TERM ASSETS$980 $610 $240
    TOTAL ASSETS$198,839 $232,978 $267,117
    Liabilities and CapitalYear 1Year 2Year 3
    Current Liabilities   
    Accounts Payable$9,482$10,792$12,102
    Current Borrowing$0$0$0
    Other Current Liabilities$0$0$0
    SUBTOTAL CURRENT LIABILITIES$9,482 $10,792 $12,102
    Long-term Liabilities$0$0$0
    TOTAL LIABILITIES$9,482 $10,792 $12,102
    Paid-in Capital$30,000$30,000$30,000
    Retained Earnings$48,651$72,636$96,621
    TOTAL CAPITAL$189,360 $222,190 $255,020
    TOTAL LIABILITIES AND CAPITAL$198,839 $232,978 $267,117
    Net Worth$182,060$226,240$270,420

    7.6 Business Ratios

     Ratio Analysis    
     Year 1Year 2Year 3Industry Profile
    Sales Growth4.35%30.82%63.29%4.00%
    Percent of Total Assets    
    Accounts Receivable5.61%4.71%3.81%9.70%
    Other Current Assets1.75%2.02%2.29%27.40%
    Total Current Assets138.53%150.99%163.45%54.60%
    Long-term Assets-9.47%-21.01%-32.55%58.40%
    TOTAL ASSETS100.00%100.00%100.00%100.00%
    Current Liabilities4.68%3.04%2.76%27.30%
    Long-term Liabilities0.00%0.00%0.00%25.80%
    Total Liabilities4.68%3.04%2.76%54.10%
    NET WORTH99.32%101.04%102.76%44.90%
    Percent of Sales    
    Gross Margin94.18%93.85%93.52%0.00%
    Selling, General & Administrative Expenses74.29%71.83%69.37%65.20%
    Advertising Expenses2.06%1.11%0.28%1.40%
    Profit Before Interest and Taxes26.47%29.30%32.13%2.86%
    Main Ratios    
    Total Debt to Total Assets2.68%1.04%0.76%67.10%
    Pre-tax Return on Net Worth66.83%71.26%75.69%4.40%
    Pre-tax Return on Assets64.88%69.75%74.62%9.00%
    Additional RatiosYear 1Year 2Year 3 
    Net Profit Margin19.20%21.16%23.12%N.A.
    Return on Equity47.79%50.53%53.27%N.A.
    Activity Ratios    
    Accounts Receivable Turnover4.564.564.56N.A.
    Collection Days9299106N.A.
    Inventory Turnover19.722.5525.4N.A.
    Accounts Payable Turnover14.1714.6715.17N.A.
    Payment Days272727N.A.
    Total Asset Turnover1.841.551.26N.A.
    Debt Ratios    
    Debt to Net Worth0-0.02-0.04N.A.
    Current Liab. to Liab.111N.A.
    Liquidity Ratios    
    Net Working Capital$120,943$140,664$160,385N.A.
    Interest Coverage000N.A.
    Additional Ratios    
    Assets to Sales0.450.480.51N.A.
    Current Debt/Total Assets4%3%2%N.A.
    Acid Test23.6627.0130.36N.A.
    Sales/Net Worth1.681.290.9N.A.
    Dividend Payout000N.A.

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