Site Selection:
The Key To A Salon’s Success
Jenifer Hunt
Every year, the indoor tanning industry attracts new businesspeople who want to make their salon the best it can be. Successful businesses start with a solid business plan, and during the planning process it is essential to choose the right mix of equipment and lotions. However, business owners in any industry know that location is perhaps the most critical factor to consider when drawing up a salon business plan. Increase your salon’s profitability and chances for success by learning and understanding the basic principles of salon site selection.
“The three most important aspects of opening a business are location, location, location.” Does this adage sound familiar? Does it ring true? It should.
Site location can both directly and indirectly affect salon revenues. It is crucial to know how your salon type is likely to appeal to target population in areas you are considering opening your business. Many tanners make decisions on where to tan based on convenience, accessibility and low rates. Others are willing to travel out of their way to patronize salons that offer high-end services. Conduct market research to determine how your proposed salon will appeal to those in the area.
Big-box stores such as Wal-Mart and other major retailers and supermarkets invest enormous resources in market research reports including demographic studies to help predict the profitability of a particular area. However, most tanning salons do not have the luxury of hiring market research firms or demographic consultants to profile the shopping habits, median age and housing statistics of potential locations. Fortunately, small-business owners can do their own site selection research with time, effort and guidance.
Know Your Audience
Although more men are joining the tanning ranks every year, females between the ages of 18 and 49 comprise the majority of tanners. Therefore, understand the spending patterns of the women in your proposed target demographic. Can the area support the type of salon you want to open?
Baby boomers may not be interested in tanning services any longer; however, they are already a major market for anti-aging products and services. An area with a large population of women in this age group may be less interested in tanning and more interested in ancillary services such as anti-aging light therapy treatments. This type of customer demands excellent customer service and ambiance and is willing to pay for it. Conversely, a salon located in a college town may find its core customer most values affordable tanning services. Prime locations for this type of customer include near schools, apartment buildings, in shopping developments and strip malls anchored by a major retailer, or in an urban, high-traffic area.
Major retailers that anchor shopping developments and strip malls, including supermarkets, Blockbuster and McDonald’s, spend enormous amounts of money studying traffic flow, population, housing and buying habits of populations in areas of interest. Salon owners that choose to locate in profitable shopping areas anchored by a major company can be certain market research has been conducted and that the area can support new business. Because the desirability of these locations can make them expensive, salon owners must determine if the cost-benefit ratio works to their advantage.
You won’t attract walk-in customers if they cannot see you. The typical tanning salon depends highly on visible exposure and owners should look for locations visible from many directions and vantage points. The best locations are in view of many passersby, from pedestrians to drivers to those taking public transportation.
Space, Zoning Issues
Allocate appropriate square footage for rooms, equipment, front-counter display space, lobby area, laundry facilities, restrooms, etc., for immediate and future needs. Ask for help determining how much space should be allocated for various purposes. Consult other salon owners, do online research, confer with design or construction professionals familiar with the tanning industry and accept advice from equipment manufacturers and distributors experienced in turnkey operations.
Consider future growth requirements as space limitations can hamper expansion and potential earnings. Having a great space is irrelevant it’s not zoned for a service-based commercial business. Know the zoning ordinances of the areas that interest you.
Not-for-profit organizations like the Chamber of Commerce and local government agencies can help small business owners gain access to zoning ordinances. It is often simpler to buy or lease property already appropriately zoned, than property that is not. While there may be more risk in obtaining property not zoned for commercial service, some business owners may decide to secure a highly desirable location and then petition the city council or city zoning commission to rezone the area.
Make it a priority to learn and understand the basics of choosing a great salon location when you create your business plan. Understand your market, conduct market research, be visible from many directions and vantage points, be detail-oriented when allocating space, plan for future growth and know the zoning ordinances. Consult industry insiders and other professionals for help. These suggestions underscore the importance of location to the success of a business.
Commonly Used Terms Defined
During your research for a great salon site, you may come across unfamiliar terms. Learn the following terms to increase your understanding as you research and to facilitate communication with industry professionals:
Baby Boomers—The generation of Americans born after World War II usually defined as those born between 1946 and 1964.
Demographics—A description of the statistics or characteristics of a population including age, marital status, income, family size, occupation, and personal or household characteristics such as age, sex, income, or educational level.
Population Density—The size of the general population and potential customers.
Census Tract—An area within a ZIP code with households with uniform social and economic characteristics. Census tracts generally have between 2,500 and 8,000 residents.
Consumer Orientation—Identification of those most likely to buy a product or service.
Custom Marketing Research—Customized marketing research to address specific projects for corporate clients.
Daytime Population—The population of an area during the daytime. This can be very different from the residential population measured by the census.
Disposable Income—The income available for spending or saving after taxes have been deducted, also known as discretionary income.
Forecast—An estimate based on assumptions about future trends in births, deaths and migration, or of a demographic characteristic such as population or number of households. Forecast and projection are terms often used interchangeably.
Lifestyle Selectivity—Selectivity based on lifestyle habits of segments of the population, e.g., hobbies, interests, ownership etc.
Target Population—The population studied to help determine if your intended salon is of interest. A high-end salon concept requires a destination location or one with higher disposable income, whereas a tanning salon targeted to students should be less expensive.
