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If you’re looking for a business opportunity that allows you to put your passion for the beauty and skin health industries to use, then opening a tanning salon may be an appealing option. As the owner of a tanning salon business, you’ll be able to help clients look and feel their best on a daily basis. With a little marketing talent and some creativity, you can make your salon into a profitable business. 

Business Overview

Tanning salons offer a variety of services, including indoor tanning and spray tanning. Salons typically offer tanning services by appointment, though some may take walk-ins. Some salons sell more than just tanning services, and may offer accessories like sunglasses, skin care products, and even bathing suits. Tanning salons often depend on repeat business throughout the season, so establishing relationships and positive experiences for customers is important. 

Industry summary

The tanning salon industry has undergone steady growth during the past five years. According to IBIS World, from 2014 to 2019, the industry grew by 5.2 percent. The number of tanning salon businesses has increased to 9,462 salons, and the industry is predicted to bring in $4 billion in revenue in 2019. As the number of salons has increased, industry employment has also grown, and today 59,483 people are employed within the tanning industry. No companies have major market shares in the United States.

The growth within the industry is related to the increased employment and improved economy that we’ve seen from 2014 to 2019. As more people are employed in better-paying positions, they have more disposable income and choose to spend that income on luxury products and services, like tanning. 

While tanning use has increased, the tanning industry does face a threat from regulatory groups like the Food and Drug Administration. These groups are working to increase public education about the dangers of indoor tanning, and this increased education can cause customers to be concerned about indoor tanning and to even avoid it, entirely. Tanning salons will need to be able to evolve with customer demands for safer tanning options, like spray tanning. 

Industry trends

According to Ist Magazine, the tanning industry is becoming more focused on providing customers with an experience than focusing on simply providing a service. In addition to using the latest tanning beds with the best technology, salons need to offer more customized experiences to customers. This can involve everything from providing different skin care choices, a selection of light options tailored to the customer, and even different music selections. When salons can give customers a positive experience, customers are more likely to see the brand in a positive light and return again for future tanning sessions. 

Artesian Tan also predicts that spray tanning will continue to grow in popularity, and social media will play an important role. Because social media allows people to engage directly with brands and to post photos showing off the results of a visit to a salon, salons will need to master their social media marketing and encourage customers to post about the brand on social media. 

Who is the target market for your tanning salon?

The target market for a tanning salon can vary according to a salon’s location and branding. In most instances, tanning salons target adult women who value their appearance and who have enough disposable income to afford tanning services. College students and, on occasion, high school students may also be part of the target market. 

Skills, experience, and education useful in running a tanning salon

While opening a tanning salon doesn’t require a business degree, there are certain skills and experiences that are valuable to have in this industry. 

Knowledge of tanning and skin care. With more customers becoming concerned about potential health effects of tanning, any salon owner will benefit from a knowledge of tanning and skin care. Being able to discuss skin health with customers and to offer well-informed tips and advice can help to build customers’ trust in the business. 

Customer service experience. The ability to engage with customers and to make them feel welcome and appreciated is important in tanning salons. Customers are increasingly valuing the experience that tanning offers, so business owners who are personable can create meaningful connections with customers, encouraging them to become returning customers. 

Attention to detail. Small details can have big implications in a tanning salon setting. Not only is attention to detail important for the customers’ safety, but focusing on the little details that contribute to a salon’s atmosphere can make it a more pleasant and enjoyable space. These small improvements can help to drive tanning sales and earn returning customers. 

Marketing skills. Marketing a tanning salon takes some skill, but even basic marketing skills will help a salon owner to grow awareness of their salon. The more marketing a salon owner can do themselves, like placing print advertising and creating social media accounts, the more they’ll be able to save by only hiring a professional marketer to take care of more complicated tasks.  

Financial Overview

The cost to start a tanning salon depends on factors like the salon’s size and whether the salon will feature tanning beds or spray tanning. Plan to spend at least $150,000 in starting a tanning salon, though costs can be closer to $300,000 when establishing a larger salon or when purchasing top-quality tanning beds and equipment. 

Common startup costs for a tanning salon 

  • Tanning beds
  • Spray tanning machines
  • Renovations so that the building can support the electrical use of equipment
  • Waiting room and changing room furniture and decor
  • Supplies like towels, lotions, and eye protection
  • Signage

Working capital

A tanning salon depends on working capital to keep the business running, and because this industry is seasonal, that working capital becomes very important in the off-seasons. Working capital covers expenses like monthly bills and equipment purchases or repairs. If too much working capital is tied up in inventory or equipment purchases such as tanning beds and the salon doesn’t generate enough business to replace that working capital, it can be difficult to keep the salon running. 

Common operational expenses

In addition to the startup funding described above, a tanning salon’s budget also needs to include the below operational expenses. 

Lease 

Lease costs will vary according to a property’s size, location, and any modifications that need to be made. Renovating an existing commercial space to accommodate a tanning salon can be very expensive, since electrical wiring will need to be altered to power tanning beds and a very powerful HVAC system. While leasing a property in a premium, high-traffic space can be even more expensive, it may be worth the additional cost in terms of the walk-in traffic and overall business awareness the location offers. 

Employees

While a salon owner may be able to staff a small salon on their own, the long hours will make it difficult to maintain this on a long-term basis. Most tanning salons will need at least a few employees. According to PayScale, tanning salon receptionists make an average of $12.57 per hour, or $32,067 per year. 

In addition to budgeting for employee salaries, hiring employees means that a salon needs to be prepared for other related expenses like unemployment insurance, Social Security contributions, and paid time off. 

Marketing

A tanning salon will depend on marketing to bring in new customers and to encourage existing customers to return. Common strategies include social media marketing, print advertising, radio advertising, and even the development of a loyalty rewards program. Costs will vary across different marketing platforms. 

Insurance

A tanning salon will need multiple types of insurance in order to keep it fully covered: 

    • General liability insurance protects the salon in case a customer is ever injured while at the business, such as by tripping while in the salon or experiencing a skin reaction to salon products or treatments 
    • Commercial property insurance covers damage to the salon’s equipment or to the building, itself, in case an event like a fire ever occurs 
    • Workers comp insurance is required if a salon has any employees. This coverage goes into effect if an employee is ever injured while at work, and it can pay for expenses like medical bills or lost wages. 

Insurance premiums vary from company to company, and they’ll also be affected by the size of a salon, its location, the number of employees on staff, and the value of the salon’s equipment. To get the most accurate idea of what insurance will cost, request quotes from multiple insurance companies. Then, look at factors like deductibles, premium costs, coverage limits, and coverage exclusions to determine which policy is best for a salon. 

Licenses & Permits

Some states require tanning salon owners to obtain training, tanning certification, and/or to pass a state-administered test. You can see a list of state tanning requirements here.

In addition to these tanning-specific regulations, a business owner may also need to hold licenses and permits before opening any business. 

How much can you potentially make owning a tanning salon?

The income generated by a tanning salon depends on many different factors, including the number of tanning beds or spray tanning stations it has, the salon’s location, and its years in business. Indeed.com reports the average income for a tanning salon owner to be $30,000, but remember that this will vary from business to business. 

Things to consider before starting a tanning salon

A tanning salon can give you control of your own business and some independence, too, but starting a salon is no small undertaking. Salons require significant startup costs because of the cost of the equipment that you’ll need. 

It’s also important to realize that tanning is largely a seasonal activity, with salons seeing most of their business in the spring and summer. Budgeting and planning to keep the salon operational all year long will be important, but many salon owners successfully navigate the industry and have successful businesses. 

Resources: 
American Suntanning Association

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