How to Buy a Tanning Salon(Basic Version)

So you want to buy a tanning salon? Well maybe I can help you out. I am the owner of a very busy tanning salon in MA. I have increased sales and customers significantly since buying the salon several years ago. The process of owning, operating, and enjoying your tanning business is quite simple. I could have written every single detail but to be honest it is not needed. I am an experienced salon owner, I have never stressed the details. People tan because they want to look good. If you are friendly, have good equipment, and the right prices you will succeed.

Instructions

Difficulty: Moderately Easy

Things You’ll Need:

• Accountant, Lawyer, Money, and a CAN DO attitude!

1. First things first, should you buy a tanning salon already in business or open a new one from scratch? To me the answer is simple. Buying an existing business means the customers are in place, equipment is operational, and you have an experienced owner/manager who can train you in the day to day operations.
   
   So, now what does that mean? Well, it means you need to search for a tanning salon that is for sale. You can find listings using internet searches, word of mouth, publications, or if you would like ask owners if they would be willing to sell(at the right price of course).
   
   Please note, be sure you know what you can afford to spend before attempting to approach an owner. I have had many potential buyers talk to me only to find out they had no ability to actually buy the business.
2. Business Plan. Before you can find what you are looking for it is a necessity to know what you want and how you will do it. Do not let the idea of a business plan scare you. They can be a few pages with just a basic outline or a detailed breakdown of all operations and financials. I did not and do not have a business plan. I simply wrote a one page outline of how I will run things and what types of marketing I would seek out.
3. You have found the perfect place! Now what? Well you will need to decide how you want to structure the new business. Will you be going it alone as a sole proprietor, or with a partner(s)? These are questions that should be dealt with using an accountant and a lawyer, preferably both with small business experience.
4. Now it is time to negotiate for the sale. You will need to see the tanning salons books(sales, profits, losses, expenses, etc.). Based on these numbers your team(lawyer and accountant) can help you find a good price to offer. You will also need to discuss lease terms and training terms.
5. MONEY! If you planning on paying cash for the business than you can disregard this step. If, on the other hand, you are going to be seeking financing there are many great options available to you. Most entrepreneurs will find it best to use a local bank that offers short term credit score based loans. These types of loans are SBA(small business association) secured. That means the SBA will back you in the event of defaulting. Due to this banks are much more likely to offer competitive terms.
   
   Note-most banks will want your credit score to be 700 at a minimum.
6. You have agreed to buy it and everything is signed(lawyer confirmed all of this). Your lease terms are favorable and fair. It is go time! Starting on day 1 you will want to absorb as much as possible from the previous owner and any employees that may be staying on. The key here is to learn the computer systems, how to clean beds, what and where to buy. All the while you must also be building relationships with your customers while assuring them things will only change for the better. At the end of week one you should begin to seek out your best options for advertising. Since you bought it there should have been advertising in place BUT it is time to bring in some new faces and new money!
   
   It is worthy of note that you will be putting in many hours. I work anywhere from 60-75 hours a week.
7. So what is next? Make money and enjoy your new business. Never give up and constantly seek out new opportunities and equipment. You may read articles that are much longer and tend to tell you about how hard this can be. I am telling you this from experience, in less than 3 weeks I found financing, negotiated a deal, and too over. It is not always this easy. Do not let yourself be discouraged. Buying a tanning salon is a very achievable goal.

Tips & Warnings

• Mass mailings typically do not work for most businesses but I have found sending coupons to be very productive and profitable. Remember the more creative the better. Offer free tans for new customers, this will generate new business.
• Negotiate with your suppliers for better prices and free shipping. If you can keep your profit margins the same and lower prices your customers will love you.
• All states and cities will vary but most will require a business license and a license to operate a tanning salon, have your lawyer take care of these for you.
• If you decide to use a partnership structure make sure you have a clear understanding of what happens when things do not go as planned.
• Happy customers bring 1 new customer .... Angry customers take 5 away!
• Tanning is very susceptible to cycles. There are busy seasons and slow seasons. Do not allow yourself to be caught with an empty bank account when you approach the slower times of the year.
• Many states are passing laws limiting the age of your customers. Be aware of these laws and follow them.
• It is tempting to lie to the IRS when you own a cash business. DO NOT LIE! You cannot help yourself by being dishonest.