How to Start a Tattoo Studio

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How to Start a Tattoo Studio

If you’re working as a tattoo artist in a studio, chances are you enjoy putting your creativity to work and helping customers to bring their ideal tattoos to life. But if you’re ambitious and have an entrepreneurial drive, the next natural step is to start thinking about starting your own tattoo studio. When you own a studio, you’ll have control over its creative direction and even hire other tattoo artists and support their careers. Before you start planning out your studio, make sure that you understand everything that will go into your new business venture.

Business Overview

At tattoo studios, professional tattoo artists both design and apply permanent tattoos at customers’ requests. Some customers come in with a hand-drawn design or sketch, which a tattoo artist can then redraw and develop into a template. In other cases, customers can select from a portfolio of existing designs. Depending on the complexity of a design, a customer may come in for one session, or the tattoo may be completed over the course of multiple sessions.

Many studios offer complementary services, too, expanding their potential income. Tattoo removal services and tattoo cover-ups are a natural fit for any tattoo studio. Branching out into body piercings is another option.

Industry Summary

The tattoo industry has experienced significant growth from 2014 to 2019. According to IBIS World, during that time, the tattoo industry experienced a 6.1% annual growth. The number of businesses increased to 47,832, while industry employment also grew to 54,400. In 2019, the industry brought in $2 billion in revenue.

This growth was driven by the growing popularity of body art. As stigma over tattoos has been reduced, demand for them has increased, with nearly 30% of the population having tattoos. Tattoos are highly popular among millennials, with nearly 50% of millennials having tattoos. This has resulted not only in increased business for tattoo studios but a wider customer base, as well.

Industry Trends

The tattoo industry is constantly evolving, and tattoo studios need to keep up with changing demands to appeal to customers. Stylecaster notes that some of the tattoo trends of 2019 will remain popular, like minimalist black ink and grunge tattoos. Watercolor tattoos will go out of style, but they’ll be replaced by tattoos that make bold use of color. This trend of big, bold color is also likely to merge with traditional tattoo styles, essentially reinventing traditional tattoos.

Korean tattoos are another trend to watch. Many of these tattoos are small and refined, but that style is also likely to merge with other tattoo styles for new and exciting techniques.

Careful planning is also becoming more popular. People are making the decision to go big with their tattoos, rather than getting many small pieces, and they’re planning out the work in great detail. Some customers are having large projects completed with one tattoo artist, while others take the route of having multiple smaller projects completed by artists with complementary styles. There’s more thought going into the art and effect of tattoos today.

Target Market

Tattoo studios market to adult audiences who enjoy tattoos (and sometimes body piercings). An ideal target market has the disposable income to invest in tattoos, and tattoo enthusiasts who could become repeat customers are particularly valuable for tattoo studios. Price is often not a factor; however, the shop’s reputation for quality work is.  Because millennials are so enthusiastic about tattoos, they make up a large portion of a studio’s target market.

Checklist for Starting a Tattoo Studio

If you’re thinking about starting your own tattoo studio, there are a few things you should keep in mind. Here is a checklist of the essentials to get started.

Step 1: Write a Business Plan

After coming up with the idea, the next step in starting your business should be to write a business plan. Not only will a bank require you to have a business plan, but multiple studies have shown that a business plan helps increase the odds of starting a successful business.

Related: How to write a business plan

Step 2: Form a Business Entity

A business entity (also referred to as a business structure) refers to how a business is legally organized to operate. There are four primary business structures to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

When deciding on which business entity is best for a tattoo studio, it normally comes down to the sole proprietorship and Limited Liability Company.

A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay.
 
The corporation can be a good choice to minimize liability risk because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.

That leaves the sole proprietorship and LLC.

The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is that the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.

Related: Guide to forming your LLC
 

Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.


Some popular LLC formation services include:


IncFile - $0 plus state fees & free registered agent for 1 year!

IncAuthority - $0 plus state fees & free registered agent the first year!

ZenBusiness - $49 plus state fees & free registered agent for 1 year!

Step 3: Name the Business

Finding the perfect business name can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.

Related: Tips and ideas for naming a tattoo studio

Step 4: Select your Location

Finding a good location for a tattoo studio can often be the most difficult and time-consuming part of starting this type of business. According to Tattoo.com, some landlords are unwilling to rent space to a tattoo shop, and some retail centers consider tattoo studios to be nuisance businesses and won’t rent to them. Visibility is important to increasing awareness of your new shop, so be patient and look for a location that works.

Even once you find a location, be prepared to do some renovating. Most local laws will require that you outfit the studio with a handwashing station separate from the bathroom. You’ll probably need to invest in non-porous floors that are free of tears and rips.

Related: Choosing a business location

Step 5: Register for Business Licenses and Permits

Each state has its own tattoo regulations and permit requirements, with the most common including passing an OSHA-approved Bloodborne Pathogens course. Compliance is generally administered by the Health Department and each artist to complete. Tattoo shops will likely be subject to regular inspections to ensure they practice safe sanitation, sterilization, and other health and safety laws.

Some states like New Jersey require an apprenticeship under the direct supervision of a tattooist practitioner for 2,000 hours before they can be licensed, while only 1,000 hours of being an apprentice are required for body piercing.

There are also general business registrations at the local, state, and federal levels that a tattoo studio might need, such as a business license, sales tax permit, Employer Identification Number, and Occupancy Permit.

Related: Common business licenses, permits, and registrations by state

Step 6: Find Financing

Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a tattoo studio is another.  The cost to start a tattoo studio is comparatively small compared to other businesses; however, receiving funding can be difficult.  To get a loan, the borrower(s) will need to have good credit and be able to personally invest 15-25% towards the total start-up costs.

Related: Finding the money to start a business

Step 7: Open a Business Bank Account

Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
 
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.

Step 8: Get your Marketing Plan in Place

Marketing is an important ongoing activity that can help to bring in new customers. Many tattoo studios use social media platforms like Facebook, Instagram, and Pinterest, in addition to review sites like Yelp and Google. Paid advertisements on Google, radio, and TV can be effective as well.  A website is also important to showcase the design skills of the studio.

Establishing a referral program or loyalty program can also help bring in new customers while building on existing customers’ loyalty.

Related: Low-cost ideas to market a new business

One important task while working on the marketing is developing an online presence. A website developer may be out of the budget, but Wix makes it easy for non-technical people to get a website running quickly and affordably.

Step 9: Get Business Insurance

There are several types of insurance to consider when starting a tattoo studio. A few of these include:
General liability insurance protects the studio if any customers are hurt while on the property, like if a customer trips or falls. This policy usually covers expenses like legal fees and medical bills.
Commercial property insurance protects the studio if it’s building, equipment, and inventory are ever damaged by an event like a fire.
Worker’s comp insurance helps to cover expenses like medical bills or lost wages if any employees are ever injured while on the job.

Many factors can affect the cost to insure a tattoo studio, such as the value of equipment and the number of employees. To get the most accurate idea of insurance costs, it’s best to request quotes from multiple providers. Then, compare those quotes while paying attention to variables like coverage limits and exclusions, premiums, and deductibles.

Related: Types of insurance your business may need

Step 10: Hire Employees

Depending on a tattoo parlor’s size, hiring additional tattoo artists may increase its productivity and allow it to keep up with increased customer demand. Some tattoo artists may bring their existing customer base with them to the studio, which can be a worthwhile investment. According to PayScale, tattoo artists make an average of $96.67 per hour. Depending on the hiring arrangements, a studio may also need to budget for workman’s comp insurance, paid time off, and staff health insurance contributions.

A common challenge in running a tattoo studio is finding the right tattoo artists and maintaining a positive work environment. Painful Pleasures recommends hiring tattoo artists based on their attitudes and potential, not their current skill level. When you create an environment that allows artists to grow, you’re more likely to attract quality artists. For instance, you can encourage artists to create a gallery piece and build their portfolio, even if they do that piece at a discount while building their skills.

Be prepared to hold an active role in managing artist relationships and in keeping a peaceful balance in the studio. Doing shop bonding activities can help you get to know your employees well while also building relationships between the artists for a better work environment.

Related: Hiring your first employee

Step 11: Set up an Accounting System

Setting up an accounting system is critical to the long-term success of your business.

Staying on top of taxes not only keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

Related: Setting up the accounting for your business

The thought of accounting can be intimidating for a lot of new entrepreneurs. There are a number of ways of handling bookkeeping, from DIY to hiring a bookkeeper. These include:

- Pen and paper - Low expense, but difficult to track.
- Spreadsheet - Low expense, but easy to make errors.
- Accounting software - Medium expense, but owner typically inputs expenses. Some great accounting software programs include Freshbooks or Wave Accounting.
- Hire a bookkeeper - Higher expense, though very affordable at $100-$200 per month in most cases. A dedicated bookkeeper will probably save money because, in addition to handling all of the bookkeeping (so you can focus on the business), they also provide personalized tax advice and ensure the business is in compliance.

Find bookkeepers in your local area or use a service like 800Accountant.

How much does it cost to start a tattoo studio?

Starting a smaller tattoo studio with one tattoo station is relatively affordable and can be done for about $15,000. Larger shops require larger investments and can cost as much as $30,000 or more to establish.

Some common startup costs for a tattoo studio include:
– Tattoo equipment like tattoo tables, autoclaves, tattoo guns, needles, supply carts, etc.
– Computers, printers, software, scanners, etc.
– Building alterations like partitions, sinks, plumbing, electrical outlets, etc.
– Cleaning supplies
Inventory of tattoo ink and latex gloves
– Furniture for a waiting area
– Signage
– Working capital to cover the first few months of the lease, payroll, insurance, etc.

How much can a tattoo studio owner make?

Tattoo studios are often highly profitable businesses. According to Market Research, many tattoo studios do over $500,000 in business each year. It’s estimated that tattoo studio revenues average $241,000 per year, per studio. While factors like a studio’s location, the number of tattoo artists employed, and its years in business will affect profits, this can be a business that offers significant financial returns.

In addition to tattoos, additional revenue can be found by offering skin care solutions and piercings.

What skills are needed to run a tattoo studio?

Opening and running a tattoo business doesn’t require a business degree, but certain skills and experiences can increase the business’ chance of success.

Tattooing experience. Tattooing talents and experience are necessary when starting a studio. If studio owners have previously worked as tattoo artists themselves, they may bring an existing customer base to the studio.

Artistic talents. Artistic skill is a must for any tattoo artist. A studio owner should have artistic talents and artistic knowledge, which is important in evaluating others’ work and hiring more tattoo artists.

Awareness of trends. Customers often want tattoos that represent the newest trends, so a studio owner needs to be aware of evolving trends to ensure that the studio can deliver those types of tattoos.

Creativity. Many customers are looking for tattoos that are new and fresh. Studio owners need to constantly rely on their creativity to provide the unique designs customers seek.

Customer service skills. Shop owners engage with customers daily. Strong communication skills are needed to understand what a customer’s looking for and to keep the customer relaxed and engaged during each session.

Management skills. If a studio brings in additional artists, the ability to hire, train, and manage staff is important. Recruiting and interviewing potential hires, as well as evaluating their portfolios, is another important skill to have.

Are there grants to start a tattoo studio?

It’s extremely rare to find a grant to start a tattoo studio. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.

Legitimate federal grants can be found at Grants.gov, and you can check on your state’s economic development office to see if they have any grants available.

What is the NAICS code for a tattoo studio?

The NAICS code for a tattoo studio is 812199, which is classified under Other Personal Care Services.

The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.

Related: What is a NAICS code?

Resources:
Alliance of Professional Tattooists
National Tattoo Association
Tattoo Artists’ Guild

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