Do you want to start tattoo shop business?

    Do you want to open tattoo shop ? Well, according to a report by Pew Research Center, 36 percent of Americans aged 18-25 have at least one tattoo. In other words, we can say that more than one-third of America’s young adults have tattoos! So, it will be safe to say that you’ll never run out of customers by starting a tattoo shop business provided that you plan and market it successfully.

    Although this business yields immense profit yet its startup isn’t easy. Obtaining a license for it is very difficult and secondly, a lot of machinery and medical equipment is needed along with experienced tattoo artists. That’s why, before you move on to starting this business, you will have to prepare a comprehensive business plan which will not only help you acquire a license for it but will also serve as the basis of your company’s future operations. In case you don’t know how to write a business plan, you can take help from this sample business plan of a tattoo shop business startup named ‘Jerry’s Tattoo Studio’.

    Executive Summary

    2.1 The Business

    Jerry’s Tattoo Studio will be a licensed and registered tattoo studio which will provide customized tattooing, body piercing and tattoo maintenance and removal services. The business will be based in downtown Chicago which is an ideal location for starting a tattoo shop.

    2.2 Management

    Jerry’s Tattoo Studio is a sole proprietorship owned by Jerry Tim. Jerry is a passionate tattoo designer who has been in this industry for more than 10 years. The company’s main management framework comprises of sales executives and tattoo artists.

    2.3 Customers

    Our customers include the young adults, adults, and celebrities based in Chicago. We will offer them a variety of tattoo designs as per their requirements.

    2.4 Business Target

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

    Tattoo Business Plan - 3 Years Profit Forecsat

    Company Summary

    3.1 Company Owner

    Jerry’s Tattoo Studio is a sole proprietorship owned by Jerry Tim. Jerry is a passionate tattoo designer who has been associated with tattoo industry for more than 10 years. Jerry is well aware of all health regulations related to this precarious work and has also taken a course on ‘Bloodborne Pathogens and Cross-Contamination Prevention’ from the Toronto Tattoo School.

    3.2 Why the Business is being started

    Jerry is passionate about tattoo designing and is known for creating exceptionally realistic tattoos. Tattooing is what he is made for and, being experienced in this industry, he knows how to open a tattoo shop. In addition to that, he aims to make profits in this industry by providing unparalleled tattooing services.

    3.3 How the Business will be started

    Jerry’s Tattoo Studio will be started in downtown Chicago in a leased location which was previously used by an IT agency. The facility features an open reception space, a small office space, a waiting room, a sterilization space, three tattoo stations and a bathroom. In addition to the usual inventory, the company will procure tattoo station equipment (2 tattoo chairs, lights, mirrors, tool box, trash bins, sharps container), sterilization room equipment (autoclave,  ultrasonic unit, sterilization pouches), waiting area furniture (sofa seats, coffee table, 2 flash art binders), reception area items (a reception desk, cash register, laptop, credit card reader, phones), office equipment (phone, printer, scanner, photocopier), a digital camera, a sound system as well as tattooing supplies (sterilizers, disinfectants, antiseptics, ointments, paper products, towels, gloves, linens, thermofax, skin scribes and stencil paper). The financial experts have forecasted following costs for opening a tattoo shop:

    Tattoo Business Plan - Startup Cost

    The detailed start-up requirements are given below:

    Start-up Expenses  
    Legal $55,300
    Consultants $0
    Insurance $32,750
    Rent $32,500
    Research and Development $32,750
    Expensed Equipment $32,750
    Signs $1,250
    TOTAL START-UP EXPENSES $187,300
    Start-up Assets $220,875
    Cash Required $332,500
    Start-up Inventory $32,625
    Other Current Assets $232,500
    Long-term Assets $235,000
    TOTAL ASSETS $121,875
    Total Requirements $245,000
    START-UP FUNDING
    START-UP FUNDING $273,125
    Start-up Expenses to Fund $151,875
    Start-up Assets to Fund $123,000
    TOTAL FUNDING REQUIRED $0
    Assets $23,125
    Non-cash Assets from Start-up $18,750
    Cash Requirements from Start-up $0
    Additional Cash Raised $18,750
    Cash Balance on Starting Date $21,875
    TOTAL ASSETS $373,125
    Liabilities and Capital $0
    Liabilities $0
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $0
    Other Current Liabilities (interest-free) $0
    TOTAL LIABILITIES $0
    Capital $620,125
    Planned Investment $620,125
    Investor 1 $0
    Investor 2 $0
    Other $0
    Additional Investment Requirement $0
    TOTAL PLANNED INVESTMENT $620,125
    Loss at Start-up (Start-up Expenses) $313,125
    TOTAL CAPITAL $251,875
    TOTAL CAPITAL AND LIABILITIES $251,875
    Total Funding $255,000

    Services for customers

    Before starting a tattoo shop business , you must decide what kinds of services will you offer to your customers. There are more than 35,000 tattoo parlors open  in the United States and for surviving in such competitive environment, you need to offer all those services which are offered by them. If you are offering more services than it will be a big competitive advantage for you. But, in any case, you need to decide your services before you plan to open a tattoo shop .

    Jerry’s Tattoo Studio will be a licensed and registered tattoo studio which will provide following services to its customers:

    1. Customized Tattoos: Our primary service includes designing of customized tattoos. Customers can either provide a picture of what they want or can just communicate their requirements. They can also choose a design from the set of our tattoo designs comprising of traditional, neo-traditional, realistic, watercolor, Japanese, tribal and blackwork tattoos.
    2. Body Piercings: A body piercing is a piercing or puncture made in the body by a needle for the purpose of inserting a piece of jewelry in the hole. Commonly pierced body parts are the ears, nose, and the belly button while there are also oral piercings which include the piercing of lip, cheek, and tongue. We will offer high-quality piercing services following all safety regulations.
    3. Tattoo Aftercare: We will provide tattoo aftercare and tattoo maintenance services and will also provide consultation and advice on how to take care of tattoos.
    4. Laser Tattoo Removal: We will also provide laser tattoo removal services for removing the permanent tattoos from the bodies of our customers.

    Our customers can make a reservation with us by visiting our shop or through our official website. They can also choose a design from the set of tattoos displayed on our website.

    Marketing Analysis of tattoo shop business

    The most important component of an effective tattoo shop business plan is its accurate marketing analysis and a good tattoo business plan  can only be developed after this stage. If you are starting on a smaller scale, you can do marketing analysis yourself by taking help from this tattoo shop business plan template or any other tattoo shop business plan free  available online. If you are starting on a larger scale, it is always best to seek the counsel of marketing experts for developing a good tattoo parlor business plan .

    The success or failure of a business totally depends upon its marketing strategy which can only be developed on the basis of accurate marketing analysis. Therefore, it must be considered before you think about   how to start a tattoo business .

    5.1 Market Trends

    The tattoo industry adds $722 million every year in revenue to the United States and the industry is currently growing at the rate of 9.8 percent. There are more than 35,000 registered open tattoo shops  which employ more than 54,000 people. However, a unique thing about this industry is that there is no tattoo studio which possesses a lion share in the market. The tattoo industry is the sixth fastest-growing retail business in the United States and more than one-third of America’s young adults (aged 18-25) have tattoos. In short, tattoo industry has a lot of potential and can be immensely profitable provided that you plan your business successfully.

    5.2 Marketing Segmentation

    Our target market is the residential community based in Chicago. The community consists of people from varying backgrounds, most of which are financially stable. As per the population distribution, 40.4% of population live singly, 18.9% are females with no husband, 35.1% are married couples who are living together and 28.8% population has children under the age of 18 living with them. The median for a household income in the city was $38,625 in 2000, and the median family income was $46,748.

    It is very important to analyze the market segmentation of your future customers before starting a tattoo business  because a successful and efficient marketing strategy for business can only be developed after we completely know our potential customers. Our experts have identified the following type of target audience which can become our future consumers:

    Tattoo Business Plan - Marketing Segmentation

    The detailed marketing segmentation of our target audience is as follows:

    5.2.1 Young Adults: Our first target group will be the young adults between 18 and 25 years of age. According to a report by Pew Research Center, 36 percent of Americans aged 18-25 have at least one tattoo. This target group will have the biggest contribution to our revenue so our marketing strategy will be specially built to attract the young adults in Chicago.

    5.2.2 Adults: Our second target group comprises of adults aged above 25 years. These adults also have tattoos but their number is comparatively less than the young adults.

    5.2.3 Celebrities: The third target group comprises of celebrities such as actors, public figures, and sportsmen and women. This target group contains all important customers so it will be directly dealt by Jerry himself.

    The detailed market analysis of our potential customers is given in the following table:

    Market Analysis
    Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
    Celebrities 25% 11,433 13,344 16,553 18,745 20,545 13.43%
    Young Adults 45% 22,334 32,344 43,665 52,544 66,432 10.00%
    Adults 30% 12,867 14,433 15,999 17,565 19,131 15.32%
    Total 100% 46,634 60,121 76,217 88,854 106,108 9.54%

    5.3 Business Target

    Our main business targets to be achieved as milestones over the course of next three years are as follows:

    • To achieve the net profit margin of $10k per month by the end of the first year, $15k per month by the end of the second year, and $25k per month by the end of the third year
    • To balance the initial cost of the startup with earned profits by the end of the first year

    5.4 Product Pricing

    After considering the market demands and the competitive environment, we have priced our tattooing services 5 percent cheaper than that of our competitors. There is no fixed price for tattooing and the prices depend on the type of tattoo and the number of hours required to work on that. The base price will start from $75 and the hourly rate of the session will depend on the tattoo type.

    Strategy

    After identifying the market trends, market demand, and the potential customers of the startup, the next step is to define an effective strategy to attract the potential customers. Like marketing analysis, sales strategy is also an important component and must be properly developed before thinking about how to open a tattoo shop .

    6.1 Competitive Analysis

    Our biggest competitive advantage will be the quality of our tattoos which will also be attractive and eye-catching. In addition to that, our second biggest competitive advantage will be our exceptional customer service. We will make sure that our customers get the best tattoo which suits their personalities. We will work with customers to search for designs that will look perfect on them. Our location is also one of our biggest competitive advantages since we will be based in downtown which is considered an ideal location to start a tattoo business .

    6.2 Sales Strategy

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

    • We will emphasize on our search engine marketing efforts to ensure a strong web presence.
    • We will get featured in the local news or on a certain website by a popular blogger to increase our popularity.
    • We will advertise our tattoo shop in magazines, newspapers, TV stations, and social media.
    • We will offer a 5% discount on our services for the first month of our launch.

    6.3 Sales Monthly

    Tattoo Business Plan - Sales Monthly

    6.4 Sales Yearly

    Tattoo Business Plan - Sales Yearly

    6.5 Sales Forecast

    Tattoo Business Plan - Unit Sales

    Sales Forecast      
    Unit Sales Year 1 Year 2 Year 3
    Customized tattoos 1,887,030 2,680,320 2,588,240
    Body piercings 802,370 815,430 823,540
    Tattoo aftercare 539,320 770230 1,002,310
    Laser tattoo removal 265,450 322,390 393,320
    TOTAL UNIT SALES 3,494,170 4,588,370 4,807,410
    Unit Prices Year 1 Year 2 Year 3
    Customized tattoos $140.00 $150.00 $160.00
    Body piercings $600.00 $800.00 $1,000.00
    Tattoo aftercare $700.00 $800.00 $900.00
    Laser tattoo removal $650.00 $750.00 $850.00
    Sales
    Customized tattoos $2,149,800 $2,784,000 $3,383,200
    Body piercings $120,050 $194,500 $268,500
    Tattoo aftercare $50,110 $71,600 $93,000
    Laser tattoo removal $139,350 $194,600 $249,850
    TOTAL SALES
    Direct Unit Costs Year 1 Year 2 Year 3
    Customized tattoos $0.70 $0.80 $0.90
    Body piercings $0.40 $0.45 $0.50
    Tattoo aftercare $0.30 $0.35 $0.40
    Laser tattoo removal $3.00 $3.50 $4.00
    Direct Cost of Sales
    Customized tattoos $989,300 $1,839,000 $2,679,700
    Body piercings $66,600 $119,900 $173,200
    Tattoo aftercare $17,900 $35,000 $52,100
    Laser tattoo removal $19,400 $67,600 $115,800
    Subtotal Direct Cost of Sales $1,294,100 $1,699,400 $2,104,700

    Personnel plan

    Personnel plan is also an important component of a good business plan for a tattoo shop  so make sure to duly consider it before thinking about how to start a tattoo shop. The personnel plan of our company is as follows.

    7.1 Company Staff

    Jerry will act as the General Manager of the company and will initially hire following people:

    • 1 Accountant for maintaining financial and other records
    • 2 Sales Executives responsible for marketing and discovering new ventures
    • 3 Tattoo Artists for tattooing the customers
    • 3 Assistants for helping with day-to-day operations
    • 1 Technical Assistant for managing the company’s official website and social media pages
    • 2 Customer Representatives 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.

    7.2 Average Salary of Employees

    The following table shows the forecasted data about the salaries of the employees for the next three years. These salaries are just an estimate and are also expected to deviate but the overall expenses will be more or less the same.

     Personnel Plan      
    Year 1 Year 2 Year 3
    Accountant $85,000 $95,000 $105,000
    Sales Executives $45,000 $50,000 $55,000
    Tattoo Artists $410,000 $440,000 $480,000
    Assistants $152,000 $159,000 $166,000
    Technical Assistant $87,000 $94,000 $101,000
    Customer Representatives $220,000 $250,000 $280,000
    Total Salaries $562,000 $599,000 $646,000

    Financial Plan

    The financial plan covers all the expenses needed for the startup so you must develop it before you think about how to open tattoo shop . The financial plan should craft a detailed map about the cost of inventory, payroll, equipment, rent, and utilities needed for the startup and how these costs will be covered by the earned profits. It is recommended that you hire a financial expert for guiding you through all financial aspects needed to start a tattoo business.

    8.1 Important Assumptions

     General Assumptions      
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 10.00% 11.00% 12.00%
    Long-term Interest Rate 10.00% 10.00% 10.00%
    Tax Rate 26.42% 27.76% 28.12%
    Other 0 0 0

     

    8.2 Brake-even Analysis

    Tattoo Business Plan - Brake-even Analysis

     Brake-Even Analysis  
    Monthly Units Break-even 5530
    Monthly Revenue Break-even $159,740
    Assumptions:
    Average Per-Unit Revenue $260.87
    Average Per-Unit Variable Cost $0.89
    Estimated Monthly Fixed Cost $196,410

     

    8.3 Projected Profit and Loss

     Pro Forma Profit And Loss      
    Year 1 Year 2 Year 3
    Sales $309,069 $385,934 $462,799
    Direct Cost of Sales $15,100 $19,153 $23,206
    Other $0 $0 $0
    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%
    Expenses
    Payroll $138,036 $162,898 $187,760
    Sales and Marketing and Other Expenses $1,850 $2,000 $2,150
    Depreciation $2,070 $2,070 $2,070
    Leased Equipment $0 $0 $0
    Utilities $4,000 $4,250 $4,500
    Insurance $1,800 $1,800 $1,800
    Rent $6,500 $7,000 $7,500
    Payroll Taxes $34,510 $40,726 $46,942
    Other $0 $0 $0
    Total Operating Expenses $188,766 $220,744 $252,722
    Profit Before Interest and Taxes $105,205 $146,040 $186,875
    EBITDA $107,275 $148,110 $188,945
    Interest Expense $0 $0 $0
    Taxes Incurred $26,838 $37,315 $47,792
    Net Profit $78,367 $108,725 $139,083
    Net Profit/Sales 30.00% 39.32% 48.64%

    8.3.1 Profit Monthly

    Tattoo Business Plan - Profit Monthly

    8.3.2 Profit Yearly

    Tattoo Business Plan - Profit Yearly

    8.3.3 Gross Margin Monthly

    Tattoo Business Plan - Gross Margin Monthly

    8.3.4 Gross Margin Yearly

    Tattoo Business Plan - Gross Margin Yearly

    8.4 Projected Cash Flow

    Tattoo Business Plan - Projected Cash Flow

     Pro Forma Cash Flow      
    Cash Received Year 1 Year 2 Year 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
    Expenditures Year 1 Year 2 Year 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
    Dividends $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

    8.5 Projected Balance Sheet

     Pro Forma Balance Sheet      
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $184,666 $218,525 $252,384
    Accounts Receivable $12,613 $14,493 $16,373
    Inventory $2,980 $3,450 $3,920
    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 Capital Year 1 Year 2 Year 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
    Earnings $100,709 $119,555 $138,401
    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

     

    8.6 Business Ratios

     Ratio Analysis        
    Year 1 Year 2 Year 3 Industry Profile
    Sales Growth 4.35% 30.82% 63.29% 4.00%
    Percent of Total Assets
    Accounts Receivable 5.61% 4.71% 3.81% 9.70%
    Inventory 1.85% 1.82% 1.79% 9.80%
    Other Current Assets 1.75% 2.02% 2.29% 27.40%
    Total Current Assets 138.53% 150.99% 163.45% 54.60%
    Long-term Assets -9.47% -21.01% -32.55% 58.40%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 4.68% 3.04% 2.76% 27.30%
    Long-term Liabilities 0.00% 0.00% 0.00% 25.80%
    Total Liabilities 4.68% 3.04% 2.76% 54.10%
    NET WORTH 99.32% 101.04% 102.76% 44.90%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 94.18% 93.85% 93.52% 0.00%
    Selling, General & Administrative Expenses 74.29% 71.83% 69.37% 65.20%
    Advertising Expenses 2.06% 1.11% 0.28% 1.40%
    Profit Before Interest and Taxes 26.47% 29.30% 32.13% 2.86%
    Main Ratios
    Current 25.86 29.39 32.92 1.63
    Quick 25.4 28.88 32.36 0.84
    Total Debt to Total Assets 2.68% 1.04% 0.76% 67.10%
    Pre-tax Return on Net Worth 66.83% 71.26% 75.69% 4.40%
    Pre-tax Return on Assets 64.88% 69.75% 74.62% 9.00%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 19.20% 21.16% 23.12% N.A.
    Return on Equity 47.79% 50.53% 53.27% N.A.
    Activity Ratios
    Accounts Receivable Turnover 4.56 4.56 4.56 N.A.
    Collection Days 92 99 106 N.A.
    Inventory Turnover 19.7 22.55 25.4 N.A.
    Accounts Payable Turnover 14.17 14.67 15.17 N.A.
    Payment Days 27 27 27 N.A.
    Total Asset Turnover 1.84 1.55 1.26 N.A.
    Debt Ratios
    Debt to Net Worth 0 -0.02 -0.04 N.A.
    Current Liab. to Liab. 1 1 1 N.A.
    Liquidity Ratios
    Net Working Capital $120,943 $140,664 $160,385 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0.45 0.48 0.51 N.A.
    Current Debt/Total Assets 4% 3% 2% N.A.
    Acid Test 23.66 27.01 30.36 N.A.
    Sales/Net Worth 1.68 1.29 0.9 N.A.
    Dividend Payout 0 0 0 N.A.

     

    Download Tatoo Shop Business Plan Sample in pdf

    OGScapital writer specializes business plan themes such as T-shirt printing business plan, screen print on T-shirt business plan, record label business plan, photography company business plan, pet photography business plan, greeting card business plan.