Chapters
1 - 2 - 3 - 4 - 5 - 6 - 7 - 8 - 9
2007-08 Lamp Application Guide
Salon Operations & Procedures
Salon Management
Finding Good Employees
Salaries, Benefits And Incentives
Customer Behavior
Customer Relations
Operating Costs And Revenues
Selling Services And Products
Evaluating Your Salon’s True Potential
Expansion Issues
Salon Location
Choosing Your Salon’s Name
Marketing, Promotion And Advertising
Selling Strategies
Marketing Basics
Creating An Image
Grand Openings
Live Radio Promotions
Salon Design
Advertising And Promotion
Yellow Pages Advertising
10 Steps To Profitable Print Advertising
Computers & The Tanning Salon
Direct Mail
E-Mail
Electronic Funds Transfers
Professional And Legal Advisers
Salon Operations And Procedures
Operating a successful indoor tanning salon is no easy task, especially for those attempting it for the first time. Though daily procedures may seem like second nature to the seasoned professional, the new salon owner may find those tasks a little overwhelming.
This chapter contains the main operational procedures salon owners must use and understand in daily operations. Although some details may vary slightly, depending upon location and business goals, there are some basic steps to use as guidelines.
Sections included on salon management, operating costs and revenues, hiring good employees and salary issues. Other sections include detailed information about advertising, marketing, promotion, franchising, computers, software, business legalities and accounting. This chapter also examines expansion issues, securing loans, writing a business plan, cost analysis and choosing the right name and location for your salon. Use this chapter as your business tool to stay ahead of your competition.
Salon Management
Management of any business is much more than just determining the overall job to be done and then delegating duties to employees. While delegating duties is a major task, the actual task is much more involved. Before knowing what has to be done, the manager first must determine the short- and long-term goals of the salon in order to formulate a clear idea of what is to be achieved. With the specific goals in mind, the manager can define the actions that will best achieve those goals. Next, the manager must clearly and effectively communicate to the employees what is expected of them and how their actions contribute to business’ overall goals.
Effective delegation can be the hardest part of personnel management, especially if one is accustomed to doing the entire job oneself. It is not uncommon for a new manager to have difficulty adjusting to the new role and allowing employees to do the work they were hired to do. Such people must work to resist the temptation to continue to do the bulk of the job themselves simply because that way they know it will be done the way they like it. Teach your employees to do the job the way you like it and then let them do it.
Effective delegation can be the hardest part of personnel management, especially if one is accustomed to doing the entire job oneself. It is not uncommon for a new manager to have difficulty adjusting to the new role and allowing employees to do the work they were hired to do. Such people must work to resist the temptation to continue to do the bulk of the job themselves simply because that way they know it will be done the way they like it. Teach your employees to do the job the way you like it and then let them do it.
The best way to train employees to handle specific jobs in a certain way is to explain what is to be done, how it is done and why, and then step back to allow the employee the room to accomplish the task. At the same time, a manager must stay involved enough in the process for the first few weeks to lend assistance and constructive advice when it is needed. To some, this process is instinctive and comes as naturally as walking or breathing; these rare people are born managers and a real asset to any business. Most people must work at it consciously, and develop the skill only after much trial and error.
To add to the difficulty, personnel management is only one part of the typical tanning salon manager’s job. In a small business such as a salon, the position carries many responsibilities.
On any given day, the manager may be called on to train a new employee, placate an angry customer, order a new supply of retail products, take the day’s receipts to the bank, update payroll and many more of the dozens of recurring tasks involved in running a salon. In short, if there’s something to be done, odds are the manager will have to do it at some point in time.
However, management should not be taken lightly, and it is not something that comes easily to everyone. Many professionals who are outstanding at their jobs have a difficult time branching into a management position, even when it’s in the same field. As one such professional put it, “I like doing my job, I just don’t like making other people do theirs.” However, unless you’re very fortunate during the hiring process, you’ll probably have to spend some time doing just that. Look on it as an investment in the future. Once your employees are trained, and you’re accustomed to the role of manager, things will run more smoothly.
Since there is a finite limit to the amount of work any one person can do effectively, salon operators must be effective managers in order to achieve maximum success in their businesses. The ideas in this section are intended to act as a guide in many aspects of salon management.
Hiring And Training Employees
Almost everything in your salon business depends upon the competency of your employees; therefore, the people you hire and the way in which you train them is critical to your success. The idea is to find employees who are going to earn their wages, not just collect them.
Hiring individuals with good personalities and good work ethics truly can increase your sales. Customers feel more comfortable, secure and happy when someone who is friendly and capable is aiding them. The employee becomes even more important if you add retail merchandise to your salon.
The most common way to find employees is to place a newspaper advertisement. However, in order to attract the type of people you want to hire, you must stipulate your high standards in the ad. Mention that you are seeking an inside sales person with flexible hours in a pleasant, business atmosphere. Mentioning the word “business” right off the bat indicates to a potential applicant that he or she will need a professional attitude in order to land this job.
It is also good to indicate that good phone skills are needed, as well as having excellent rapport with clients. Mention the importance of appearance as well. Being in the beauty/health field, it is important to have attractive, neat, fit employees. This alone can create a salon image.
Keep your eyes open for potential employees. Health clubs and beauty salons are good places to find people who can convey the image you desire. Employees have been known to quit without warning, so when you come across someone you like and they express an interest in working for you, take their name and number and begin a file. Then it will be easier to find the right person without going to the trouble of advertising when you need to.
Waitresses also are good candidates for potential employees. If they work in a restaurant that’s only open for dinner, there’s a chance they might need a daytime job. So if you’re out eating and encounter a waitress who’s attractive, neat, attentive, personable and provides good service, ask her if she’d be interested in discussing employment with you.
If you come across an exceptional employee while shopping your competitors, make an offer, but keep in mind that there may be some drawbacks.
If your operating style is drastically different from that of your competitor, you may encounter unexpected difficulties. The employee may have been trained to work a certain way, and old habits are sometimes hard to break. The employee also may have been trained to operate and explain different equipment.
Always conduct interviews in your salon and allow the potential employee to take a session as part of the interview. Even if you don’t hire the person, you may gain a customer. By doing this, you also may see how they react to the equipment and how well they understand its function.
Make sure you go over your requirements and expectations; they must be perfectly clear from the beginning. A lack of communication is the most common source of problems in an employee-employer relationship. Prepare a written job description and emphasize selling retail items, as well as tanning and/or add-on services as a primary responsibility.
Allow potential employees to do some of the talking because this is one of the best ways for you to get a feel for their personality and ideas. Do some role playing; pretend you are the customer and let them interact with you. Act as a customer coming out of an initial tanning session, and let them try to sell you a package or a product. This can give you an idea of how well they will function on the job. If they are excessively timid when role playing, it’s likely that they will act the same way when it comes to the real thing.
The Training Process
After hiring, break the employee in slowly. Pushing too hard may cause a person with excellent work potential to become frustrated and discouraged.
First, give employees a package of literature from the manufacturer or manufacturers of your tanning units. They also should be given copies of your ads, fliers, customer cards, daily record sheets and any other forms they will be expected to fill out. Have them read chapters of this book and copies of the trade journals and explain that it is imperative that they read all the information carefully. Review each form step by step and have them spend the day studying them, preferably in the salon so they can ask you questions at any time.
Allow them to listen, on an extension, to inquiries you handle on the phone, and explain why you said what you did immediately afterward. Remember, there is no better teacher than hands-on experience. Don’t expect them to get the hang of it the first few times—you probably didn’t even do that. Allow them to go through the phone procedure with you for the first few days as practice makes perfect and builds confidence.
Supply the new employee with a list of the questions most commonly asked by customers, and give them the answers, along with a detailed explanation of why they are answered that way. You may want to give them a quiz at the end of their training period, just to be sure they are capable of being left on their own in the salon.
Cleaning duties can be a touchy subject, so be sure to specify your expectations in the very beginning. Don’t wait until after you’ve hired the person to explain that some cleaning duties are required. It’s possible they wouldn’t have been as interested in the job if they had known this and, if that’s the case, concealing the fact won’t make them any more receptive to it.
Employees always should clean equipment thoroughly after each use. The cleaning may sound simple, but you must emphasize that it needs to be done carefully and properly. Explain why it is necessary and what the possible consequences are if it is done improperly.
Go through the procedure a few times for the tanning units, then have them do it while you’re watching. Don’t be afraid to criticize; it is important that this procedure be done right.
Let your employees know that you expect them to keep the reception desk as tidy as possible since this usually is the first impression clients get when they enter the salon. If it is messy or dirty, the client automatically will jump to the conclusion that the rest of the salon is the same way.
Be sure to stress to your employees the importance of enforcing the salon’s rules. Tell them they are never to extend tanning times or to allow clients to tan without protective eyewear. Make sure they understand why, and are able to explain the dangers of such practices to your clients.
The dress code for the salon is up to the individual salon owner. If you are trying to portray an image of individuality in your salon, your employees should do the same. You may want to set certain guidelines, like khaki shorts and pastel-colored shirts, just to keep the general image the same, but it’s not usually necessary. Clothing can be fun, but should never be risqué. Also, keep in mind that it should be loose and comfortable enough to allow ease of movement when cleaning equipment.
If you find a good employee who you feel will stay with the salon for some time, consider taking the employee to one of the trade associations’ training programs. The depth of knowledge that is presented, as well as the opportunity to network with other salon owners and employees, is invaluable. If you can’t justify the travel expenses for any of your employees, still give serious thought to going yourself. The knowledge you gain, as well as the training manual, will be an asset to your in-salon training program. Another, less expensive alternative is a correspondence training course offered by some of the associations.
Employee Relations
Rapid employee turnover is something all businesses want to avoid. In addition to being costly in money and time, it also can cause problems with other employees and client relations. In order to minimize this problem treat your employees well.
Being considerate and generous to an employee will encourage him or her to do more for you. Treat your employees in the same manner in which you wish to be treated—with fairness and dignity. However, if an employee has become very negative and doesn’t seem receptive to reconciliation, get that person out of the salon. The negative attitude will be transferred to other employees and to customers, causing a great deal of damage to the salon’s morale and image.
An open communication policy can solve many problems before they develop into major issues. Talking to your employees is of primary importance, and let them know how you feel about their performances. If they are doing a good job, tell them. If their performances are slipping a bit, let them know you are concerned, and would like to know if there is some way you could help get them get back on track.
If you have students working in your salon, school usually takes precedence over work. Make every effort to accommodate their special needs and try to develop a schedule that will work smoothly for them. If this is not acceptable to you, don’t hire students. However, at the same time, they should be made aware of the special needs of your salon, and that you are operating a business.
There is a fine line between being friendly with your employees and still maintaining your authority. Socializing after work hours should be limited. However, eating lunch together, when possible, is a good way to bridge any communication gaps that may exist.
Try to be at the salon as much as possible since this lends itself to better employee relations, as well as better client relations. Employees generally are more responsible, and clients feel more secure when there is an authority figure present, and it creates a more professional atmosphere.
Allow your employees to tan free. This offers incentive to them and gives them real experience with the equipment, while helping you maintain salon image. You also may want to give their family members a 50-percent discount. If you spell out a policy on how much family members pay, you avoid having your employees “guess” what it is. If you sell lotions and clothing, give your employees a discount. They will probably wear the clothes while working in the salon, and this gives your retail side a boost. Your clients are more likely to notice the clothing on your employees than they are on the racks.
Motivating Your Employees
Motivation seems to be big money these days. In fact, a huge industry revolves around it. There are tapes, seminars and in-depth clinics devoted to the subject. Some help devise programs to motivate a sales staff, others teach managers to motivate their employees and still others coach people in all walks of life to motivate themselves. None of this is free. Motivational assistance, be it taped or in person, commands a hefty price. Why is that? It’s simple: motivation is big money because it can help a business bring in big money.
No matter what business you’re in, it’s a proven fact that motivated employees are more productive than their ambivalent counterparts. People who want to do something and want to do it well will do a better job than those whose main interest is just getting it done. Motivation is very important because motivated employees make the salon money.
However, experts warn that a motivation program must be more than just a reward system for exceptional sales and customer service efforts. Although rewards should play a role in the overall program, it’s crucial for the working environment itself to be motivating.
One thing often overlooked in creating such an environment is the existence of detailed job descriptions. Because it’s much easier to do a job when you know exactly what is expected, it’s important for employees to know what they can and can’t do. Poor understanding of what is expected will tend to detract from the quality and quantity of work produced, as will job descriptions that require an employee to be doing two things at once.
In a tanning salon, no assistance is required while customers are using the equipment, so one or two employees can handle customer service simultaneously and many administrative and maintenance duties.
However, if you offer ancillary services such as nails, day spa amenities, hair services or nutritional supplements, the necessary work can be broken down into two and possibly three specific positions, and one person is going to have a tough time doing all three. After all, one person cannot be the ideal front desk receptionist, properly attend to clients and conduct salon tours and program explanations, all at once.
Another element to creating a good, motivating working environment is you, the salon owner. One of the best things you can do is be there yourself, setting a good example. In addition to being there, you should make the employees feel that they are a part of the business. If they can see how their job fits into the overall function of the business, they’ll be much more likely to want to do a good job.
And even better than just letting them see how the overall salon goals are set and achieved is having them take part in the process. Don’t fall into the trap of assuming that employees are only working for a paycheck; feelings of involvement and accomplishment actually may be more important considerations. Motivation comes from belief in a process or product. The more involved the employees are, the more they’ll believe.
Incentives And Rewards
When designing an incentive program for your employees, don’t limit yourself to cash or percentage rewards. Although they can be effective, money isn’t always the best incentive. It is important to appreciate employees in the way they want to be appreciated. Non-monetary rewards can be aimed at three different kinds of personalities: feeling, logical and action types. Each type will be best motivated by a different reward.
The first group—the feeling type of person—is best motivated by recognition and by some demonstration that they are valued. Rewards that provide the best incentive are things like a plaque on the wall in the salon, employee of the month awards, mention in a customer newsletter, flowers and similar approaches.
The second group—the logical employees—need to have quantitative goals to achieve. They like to see exactly where they stand, be it on a board or graph in the office or whatever. Then they can mark their progress against the chart, striving to reach a clearly defined target.
Finally, the active type of employee isn’t motivated by money so much as by what it enables him to do. That is to say, money is a means, not an end. It makes sense that the way to focus this person on a goal is to reward its achievement with fun, active things. A few examples might be tickets to concerts or sporting events, mini-vacations, restaurant gift certificates and similar activities.
The key in all cases is to make sure the reward is something that the person values. If you don’t present the goal and reward in the employee’s language and value system they either won’t see it or will become confused.
Also be aware that few people fit exactly into one category; most are a combination of more than one. Take some time to observe and evaluate what kind of people your individual employees are before structuring an incentive program.
Yet, your employees should be made to understand that their paycheck is their reward for meeting their job requirements. Be sure to set their goals beyond that minimum. That is to say, they are only entitled to a bonus reward if they go beyond what already is expected.
Finally, you can’t motivate your employees to achieve specific goals until you have some for the salon yourself. A problem in the tanning industry is that many salon owners never define their mission. The salon’s goals may be to reach a certain dollar figure in accessory sales.
They may be to achieve a certain percent occupancy. They may be to increase the number of three-times-a-week tanners by a specific amount, or even to increase the number of referrals by a set factor.
Hopefully, the goals of your salon touch on all of these areas. In the course of achieving them, however, keep the salon’s focus consistent. If you’re adding accessory lines, make sure they fit in; don’t dilute your purpose.
The importance of setting up a detailed program to motivate salon employees cannot be denied. In so doing, the salon owner makes a statement about what is valued, be it increased sales, improved customer service or, better still, both. It’s been demonstrated time and time again that motivated employees are productive employees. Productive employees will, by definition, bring more income into the salon, and that’s what it’s all about.
Salaries, Benefits And Incentives
The ultimate goal of an indoor tanning salon should be to make money. Often standing in the way is the inevitable revolving door of qualified employees who leave because they are unchallenged, discouraged, disinterested or feel they aren’t being paid well. What to do?
There are two main reasons why salons should give serious consideration to the compensation packages they offer their employees: 1) It costs the salon money to continually hire and train new employees after old ones leave; and 2) happy, motivated employees who stay will continue to contribute to the salon’s financial success.
The problem? Many employers aren’t dedicating the time to what they offer their employees. “They fail to think through what kind of employees they’re really trying to attract, and what will be the most effective way to compensate them,” says Morey Villareal, president of Villareal & Associates, a Tulsa, Okla.- based company specializing in compensation consultation, search and selection, and organizational analysis.
Hanging on to a top-notch salesperson is easier said than done. Salon owners try to keep them by offering the “total package,” but what exactly is the total package? It can be base salary, benefits, commissions and other incentives, and even working conditions and flexible hours, Villareal says.
“There can be a number of things that will accrue to the employee’s benefit that have an effect—not just culture, supervisory style or climate of the company, but tangible things like pay and flexible hours or work weeks,” he says. “There are all kinds of things that employers can do to attract, motivate and retain employees.”
The total package also should include benefits for all employees, says Paul R. Dorf, managing director of Compensation Resources, Inc., an Upper Saddle River, N.J.- based consulting firm specializing in issues such as sales compensation and performance management.
Sadly, it’s the nature of retail sales and service that while employees are happy, they tend not to stay long.
“It’s often difficult to keep people for the long-term, and not just because of the nature of the work, but because of the nature of the people you’re hiring,” Villareal says. “They tend to be students or they’re on their way to a career in something else.”
With those two factors comes a certain amount of turnover, he says, even if salon owners do a good job of attracting, motivating and retaining good employees.
So what is a salon owner to do?
“I think I’d still do the best job I could in making sure to manage it as carefully as I could,” Villareal says. Salons increase their chances of keeping employees by keeping a nice working environment and having good people to work with, as well as making sure pay is competitive and that there are built-in advantages in the way compensation and working conditions are structured, he says.
It Pays To Pay
Compensation specialists agree that hourly wages should be competitive, but it begs the question: competitive to what?
First of all, base pay should be in line with other businesses in the salon’s area. Villareal points out that the market isn’t just other tanning salons, rather all businesses that might be recruiting the same type of employee. Second, the pay should be equitable, which means owners should be paying employees in the salon similarly for the same types of jobs and skills.
“Those are the two key requirements,” he says. “Most of the organizations I work with—and I work with a lot of small companies—don’t do a very good job with either one. They don’t have a very good feel for how the market is or for the types of people they’re trying to recruit, and they don’t know very much about how to structure pay so that they’re treating people in fair, consistent ways.”
Since September 1997, the federal minimum wage has been $5.15 per hour. Some states have enacted their own, often higher, rate. In any case, it won’t be less than $5.15 because if the state rate is lower than $5.15 or there is no state minimum wage, the federal rate applies. Washington’s minimum wage tops out at $7.63, for example, and the rate in California and Massachusetts is $6.75. Connecticut, Delaware, the District of Columbia, Rhode Island and Vermont also have rates of more than $6 per hour.
It’s been said in the tanning industry that salon owners should pay employees 85 cents to $1 more than minimum wage, and they should pay managers $1.25 more than the other employees. But some say there shouldn’t be such a hard-and-fast rule. Instead, companies should do their homework.
Salon owners need to keep their finger on the pulse of their market. If Tanning Salon A is paying its bed cleaners $5.50, but similar jobs in the area are paying $6.50 or more—regardless of what minimum wage is—that might explain why the salon has trouble keeping bed cleaners.
Many companies get hung up on dollars and cents and lose sight of the larger picture, Dorf says. They let employees go simply because they want more money—even if it’s 50 cents an hour.
Statistics have shown that it costs businesses as much as two times an employee’s annual salary to replace that employee, Dorf explains. This is measured in advertisements for the open position, sales missed and time spent interviewing and training a new hire, but also in the dissatisfaction of other employees when they have to pick up the slack of a former co-worker.
For example, if an employee wants $1 more per hour, that translates into roughly $2,000 more per year. “Most organizations take it as a personal affront,” Dorf says. But if the owner lets that employee go, it could cost the salon an estimated $25,000 to replace the employee. Most companies don’t think of that, Dorf says.
“We found if an employee said he was going to leave, the company—in many cases—would think it over and make a counteroffer, and that person probably worked out to be a better employee,” he continues. “There are still articles that people write that say if employees come to you and say they’re unhappy and they’re going to leave, let them go. Yet, there’s a lot of empirical data that says those people will stay and make better employees if you make the effort.”
There always will be employees who jump to the salon down the street because it pays 25 cents more per hour. But typically, employees will stay if they are happy with where they are, and they’ll only leave if there are greater underlying problems, such as poor management, Dorf says. “Even though we’re compensation specialists, compensation is strictly one arrow in the quiver that management has to use to retain people.”
Dorf is a firm believer in incentive plans such as profitsharing programs for all employees. “Not only is it additional money, but if it’s constructed properly it also keeps the people informed about what’s going on in their company,” he says.
“They want that communication. Providing them that communication as part of some kind of bonus or group incentive plan has that secondary advantage.”
Incentives And Commission
Incentives come in many forms. Commission is the most widely known and used in retail sales. Simply put, it provides a monetary reward for selling a product. The more products an employee sells, the more money goes into his pocket.
According to the U.S. Bureau of Labor Statistics’ 2002-03 Occupational Outlook Handbook, commission gives salespeople the opportunity to greatly increase their earning, but it depends on their ability to sell their products as well as the “ups and downs” of the economy.
“Money is a motivator,” Dorf says. “People who go into sales roles, in many cases, are motivated by money—just like people who go into the healthcare field have an altruistic bent and are looking to help others.” He adds that people do retail sales because they like the personal interaction.
Finding out why employees come to work in a salon is the key to providing solid incentives. Find out what makes them tick and provide them compensation that helps them get to their personal goals.
The basis of a successful sales compensation package can be achieved in three steps, according to Dorf’s Compensation Resources: 1) clearly defining sales goals that are realistic but challenging, 2) tracking and measuring performance against goals, and 3) rewarding achievement with competitive and motivational compensation.
Salespeople range from counter clerks selling gum at the register to jumbo-jet reps pitching the benefits of their plane to a major airline. Obviously, the commission involved for each scenario is vastly different. Because tanning salons involve the sale of relatively small-ticket items such as lotions and tanning packages, an incentive system can be quite flexible.
For example, a salon can offer its employees 2 percent for sales over $500 per month and 3 percent for sales over $1,000 in that time. Commission also can be paid per sale, such as 2 percent for each product worth less than $30, and 5 percent for each product more than $30.
When used correctly, motivation can be a powerful incentive. When used incorrectly, it could force an employee to walk. The trick, again, is to know what will work in each situation. When a commission program has been put into place, it is important the owner monitor the employees. In their effort to earn as much commission as possible, employees may revert to high-pressure tactics that could drive off customers, which isn’t beneficial for any salon. Make sure customers feel comfortable with their salesperson and enjoy their sales experience while in the salon.
There are two main trains of thought when it comes to motivating employees: They’re often described in the carrot-and-stick theory. A carrot is used for reward and positive reinforcement, and a stick (pain) is used to induce cooperation.
Both are applied financially in the workplace, with varied results. To illustrate this point, consider a salon employee who asks a customer to try a particular lotion. He may be asking for one of three reasons:
- The employee gets a commission for each bottle sold (carrot theory).
- The manager simply asked all employees to push that lotion.
- The customer gets a special deal for each time the employee fails to mention the lotion, and the deal’s value is taken from the employee’s pay (stick theory).
The challenge for the salon owner is to determine which of the options will work for each employee, because it’s not the same for everyone.
“I think it’s very important to know why employees are there,” Dorf says. “Are they there because they’re just looking for an interim job until they can find something better? Are they there because they’re students and they need the money? Are they people who don’t care about benefits and they really would like all the money upfront?”
Benefits
Money is important to the retail salesperson, but it isn’t everything. Villareal and Dorf agree that a compensation plan should include more than just base pay and incentives.
Group insurance for all levels of employees is becoming more important these days, Villareal says, because medical costs can be very expensive. “Individuals ignoring the need for some kind of protection against those medical costs are taking a real risk, regardless of their age,” he says.
Any time an employee goes to work for a company, he’s looking for what Villareal calls hooks. Those are advantages that will attract and keep employees at a better rate than the competition.
“Just thinking through those hooks can make a real big difference,” Villareal says. “Most employers don’t. They spend more time buying equipment than they do thinking how they’re going to attract, motivate and retain employees.”
According to the employee cost index (ECI), benefits can be paid leave such as vacations, holidays and sick leave; premium pay for work in addition to the regular work schedule (such as overtime, weekends and holidays); insurance benefits; retirement and savings benefits; legally required benefits such as Social Security and unemployment insurance; and severance pay. The ECI is a measure of the change in the cost of labor, broken into compensation as well as wages and salaries.
A compensation plan also should include benefits for all employees, Dorf says.
“A lot of companies do not provide benefits to part-time employees,” he says. “They may get pro rata vacation or time off, but don’t have the ability to get sick leave, life insurance or 401(k)s. We find those companies that treat their full-time employees and their part-time employees the same—on a pro rata basis—generally have a much happier group of people.”
The Package
Salon owners need to take time and think about what they’re paying their employees. More than that, they should consider commissions and other incentives, as well as benefits. It’s all wrapped up into the total package, and it’s as important to the bottom line as any tanning package or tingle product.
Productive, qualified workers will come and go. It’s just the nature of the retail sales business. But by giving them what they need—good salaries or wages—and what they want— competitive commissions, incentives and benefits—salon owners increase the chances their employees will be happy and stay to work as hard as ever for their company.
“Clearly, if we want to maximize the capabilities of the people who are working for us,” Dorf says, “we’d like to have the right people, we’d like to have them motivated, train them in how to do things better, and to recognize and reward them.”
Pay Rates And Pay Increases
Creating a pay structure is not the final step in the creation of a compensation plan. An organization also must decide how to administer this compensation plan. This means deciding how to pay new employees, how and when to give employees increases including how to move existing employees from the minimum to the maximum of their assigned pay grades, how to determine the pay increase for an employee being promoted from one job to another, and what influence, if any, cost-of-labor increases will have on the determination of pay increases for employees. In addition, an organization must develop policies and procedures that will implement the results of these decisions in a consistent manner.
Starting Pay For New Employees
In order to avoid paying new employees the same as more experienced employees, most employers choose to start new employees closer to the minimum of the pay range. In general, an employee with minimum qualifications should be paid the minimum of the range. This general rule is not true when a new hire has skills that are in great demand or has skills or other expertise substantially above the minimum.
Employee Increases
There are several different types of base-pay increases: general (across-the-board) increases, cost-of-living/labor increases, promotion increases, step increases (based on longevity) and merit increases.
General increases are diminishing in popularity because they are not consistent with the idea of pay for performance. With a general increase, employees in a certain group based on established requirements are eligible for a certain monetary or percent increase to their base pay.
Cost-of-living increases are types of general increases given to all eligible employees. This type of increase may happen as a result of union contract negotiation. Some companies choose to track benchmark positions over a period of time and modify other positions based on changes in the ranges of benchmark positions.
Promotion increases are given when an employee is moved from one job to another with a higher pay grade and range. The size of the increase will be influenced by the difference between the old and new pay ranges, and the pay of the newly promoted person’s peers, superiors and subordinates, if any.
Step increases can be based solely on longevity or some combination of longevity and performance. Step increases alone are inconsistent with pay for performance.
Merit increases are also known as pay for performance. To be successful, an organization must be able to measure differences in job performance, and these differences must be significant enough to merit the time and effort required to measure them and pay accordingly. Merit increases also affect other components of the compensation plan in that the pay range must be wide enough to allow for significant differences based on performance, supervisors and managers require training in performance planning and appraisal, and control mechanisms must be in place to successfully administer a merit increase program.
Reprinted with permission from HR Answers, Inc. For more information call (877) 263-4476 or visit www.salarysource.com.
Customer Behavior
Understanding your customer and tailoring your sales presentations to fit the specific needs of the individual customer is a key secret to success. This is accomplished, in part, by understanding that all customers fit into one of four specific categories.
Examining The Four Groups
All customers fit into one of four categories—belongers, emulators, achievers or socially conscious. Once you identify which category your customer or potential customer fits into, you can adapt your sales presentation accordingly.
The first group, the belongers, are the patriotic type who believe in America first. These people have a need to belong and be included. They are the type that will patronize your salon because their friends do and they don’t want to be left out.
In addition, belongers believe in unity and community. They go along with the pack. They also like things that are simple and easy to understand. Belongers are easy to recognize. They drive sensible cars, dress conservatively and are very family oriented. Belongers also are very easy to deal with.
When making a sales presentation to a belonger, drop the names of other customers who live in their neighborhood or share similar interests. Present belongers with the tanning packages and lotion products that are the most popular sellers. Catch phrases such as “this is my favorite” and “here’s what everyone’s buying” will help close the sale. Once a belonger becomes a customer of your business, they enthusiastically will encourage others to do so as well.
The second group is classified as emulators. To emulate means to strive to equal or surpass. Emulators want what others have, and they often try to imitate the rich and famous.
Emulators are extremely image conscious and focused on outward appearance. To the emulator, everything revolves around sex and sex appeal. Their purchasing decisions are based on a product’s ability to enhance their appearance and attractiveness. They lack a strong work ethic and therefore always are looking for a short cut to achieve fame, fortune and success. Consequently, they often live from paycheck to paycheck, although you wouldn’t know it by outward appearances.
Emulators will max-out a new credit card within one week after receiving it. In addition, they overspend on things that are not essential while complaining about a 5-cent increase in the price of a gallon of milk. They want the best of everything, but often are forced to purchase knockoffs and imitations. Emulators also tend to over accessorize. Look for lots of jewelry, make-up and the excessive use of fragrances. They lease flashy vehicles, consider the purchase of a time-share vacation an investment and count cash advances on credit cards as part of their actual net worth.
When selling to an emulator, it’s important to enthusiastically discuss the end results that will be achieved by using a particular tanning system or lotion. Use catch phrases such as “a few sessions in this tanning system and people will think you just got back from Cancun.” When selling a lotion product, try a phrase such as “this product will really get you noticed.” Since emulators spend freely, you may wish to demonstrate the most expensive products first; however, always have a back-up product ready if you sense them balking on price.
The third group of customers is the achievers. Achievers are the real article. They strive for success and achieve their goals. Since they are truly successful and not just putting on a show, they don’t waste time. They want a quick, no-nonsense sales pitch that gets right to the point. They immediately want to know the bottom line on features, benefits and pricing.
Additionally, achievers have all the earmarks of success. They own the highest quality cars, live in the best neighborhoods and vacation first class. While the achiever is not overly concerned with the dollar amount of a product, they will not waste money. They will pay only for value and results.
Achievers do not want to be part of the crowd. They strive to be unique by purchasing products that they believe will separate themselves from the pack; however, achievers should not be classified as snobs. They simply relish the rewards of hard work.
This group will purchase tanning packages on your top of the line equipment and highest quality lotion products. When dealing with an achiever, always remember to sell from the top down. Statements such as “this product’s not for everyone,” and “this is the Mercedes of tanning systems” trigger their hot buttons. Achievers are most likely to purchase long-term packages.
The last group, socially conscious, can be sub-classified into two categories: The hippy drop-outs and the social drop-ins. While each group may have their own ideas on how to achieve their goals, their agendas are similar. They want to fix the world and are environmentally aware.
The socially conscious crave information about your products and services. They want to know how and why things work. They feel it is their duty and social responsibility to interrogate you and your staff. The socially conscious are value driven and are always looking for a good deal. They are frugal with their money and have been known to develop hand cramps from clipping coupons.
While this group normally is the hardest to sell, you can gain an advantage by offering packages and products that include free tanning sessions with each purchase. To be most effective, you should itemize in writing the actual savings. For example, if you include two free tanning sessions with the purchase of a bottle of lotion, be sure to specify the actual cash value of the free sessions.
Before you try to psychoanalyze each of your customers and pigeon hole them into their respective categories, remember that no study or methodology is perfect or all encompassing. Many people cross over from one group to another. They may exhibit the traits of an achiever when it comes to buying a home. However, when it comes to donating to a charity, they have the heart of the socially conscious.
Therefore initial emphasis of your sales presentation should focus on identifying and then fulfilling the needs of each individual customer. An important point that this study does reveal is that a canned or rehearsed universal sales presentation will fail at least 75 percent of the time. Thus, it is essential that you realize the differences and similarities between customers and structure your sales presentations accordingly.
For practice, analyze the habits and lifestyles of several existing customers with whom you are familiar. Consider which category they fit into and develop a sales strategies for each.
Customer Relations
Most retail experts claim that customer service is the best way to build and keep a strong, loyal and productive customer base. It’s a claim that makes sense, too. If the only thing you have to offer is a tanning service, you’re not providing your customers with anything that every one of your competitors doesn’t offer as well.
The service is the minimum you can offer. If you want to go beyond the minimum and achieve success you must provide your customers with something more; you must enhance the basic service at your salon so that they feel that it’s not only a good place to go to tan, it’s the best place.
When customers walk in your door, they should be greeted immediately on a first name basis, if possible. The ability to memorize names is an important asset in working with clients.
They should be made to feel as though you are expecting them and are happy to see them. The customer always should be escorted to his or her tanning room. This provides a feeling of importance. When clients are done with their sessions, they should be complimented on their looks and asked if they enjoyed their session. All employees should be trained to follow the same routines with clients. This keeps the atmosphere professional as well as discrepancy-free.
Make certain the clients understand what they can and can’t expect from their tanning sessions. False claims by employees obviously can cause a myriad of problems that you eventually will have to confront, and that promises to be an unpleasant and possibly costly experience.
Established customers are the rock upon which your business is built. Not only do they support your salon financially with their loyalty, but they also have the ability to bring in new customers.
Word of mouth is the most important part of any business’ advertising campaign. You’ll want to do as much as sensibly possible to maintain old customers.
According to a Rockefeller Foundation Study, only 4 percent of all customers are lost because they die or move. The majority of customers (68 percent, according to the study) are lost simply because they don’t like the employees’ attitudes. The main point to remember is that your customer is your most precious commodity and should be treated as such. All customers should be offered a refreshment before they leave your salon. This is a good time to ask them if they have seen the new line of products you have available, whether they be clothing or lotions.
New Customers
If someone just walks in to check out your salon, you should give them the royal treatment. Answer any questions as thoroughly as possible and show them around the salon and explain your equipment and services. You even may want to offer them a complimentary tanning session just for coming in.
Telephone inquiries are very important as well, since tanning salons seem to get a lot of them. Always be cordial and enthusiastic regardless of whether you’re busy. If you are too busy, ask them if they would please hold for a moment, and you will be glad to answer any questions. If you get tied up, have another employee talk to them. Never let them wait for an extended period of time, and never ask them to call back later.
Offer to call them right back and make sure to do so. Phone manner is extremely important in the tanning business. If you can convince all the customers who call your salon to come in, you’ll really be in business.
Minimum Service Standards
In order to offer the highest quality service to your clients, you and your staff should strive to achieve minimum standards of service. The following recommendations are meant to serve as a model and may not be sufficient for some salons. Whatever standards you decide on, however, make sure they are written out clearly and that all employees have read and understood them.
- Greet Every Customer When He Or She Walks In The Door. This is critical. You will want everyone to feel comfortable and welcome when they enter your door. Even if you are working with another client at the time, take a moment to look up and acknowledge their presence by saying something like, “Hi, I’ll be with you in a moment.” It only takes a minute but is very important. Remember, this person is spending his money on a luxury service—make him think his money is well spent. After all, it probably is.
- Address Clients By Name Whenever Possible. This obviously will not be possible for a first time visit. Remember, the more comfortable and welcome you make the client feel, the more likely he is to return.
- Talk with Every Client Before He Or She Walks Out The Door. After the client is finished in your salon, be sure to ask him or her how the session was. Was it comfortable? Was it relaxing? Never let anyone out the door without a brief chat. Let your clients know you are interested in them. This will continue to put them at ease and reinforce the chance that they will reschedule another session.
- Clean Every Room After Each Use. This is extremely important. Clients must be confident that they are in a spotless and sanitary environment. Tanning beds and rooms must be thoroughly cleaned.
- Client Use Of The Telephone. It is recommended that you install a phone in the client waiting area for local calls only. This is an extra service that will make clients feel welcome.
- Beverage Service. At the very least, you should install a coffee machine and water cooler and offer free refreshments to clients who are waiting. Additionally, consider offering a cold beverage such as juice or bottled water. Clients often get thirsty after a tanning session. Even if they have to pay for it, clients will view this service as another bonus.
It is important for a business to set a budget for each aspect of the business and account for each separately. This will check the relative profits of each part and illustrate where improvements and adjustments must be made in the merchandising plan. Here are some of the expenses that must be considered in your salon operation: rent, utilities, professional services, telephone service, insurance, advertising, labor and equipment.
The big cost for many tanning salons is the equipment. Some salons prefer to lease equipment because of service contracts, convenient terms, tax advantages and rapid technological advances that tend to date equipment quickly. Equipment is a major expense to many salons and the cost is a major drawback to entering the business. However, the manufacturers of tanning equipment have come a long way in terms of offering enough models to satisfy nearly every budget.
Salon owners should project expenses and income before they even begin, hereby avoiding the possibility of unwelcome surprises later. The following is an example of an outright purchase of eight tanning beds, based on a slightly higher than average cost of a medium priced bed, along with many of the necessary start-up costs.
Below it, the chart showing approximate income is based on operating 12 hours a day, 25 days a month and 300 days a year. By projecting these figures month by month, you’ll start to see an accurate picture of what to expect from the business.
A large share of your income will be derived from your tanning services. The amount is based on how many sessions are given and what is charged for each session. Another portion of your total income will be derived from retail sales and from other services you provide. These too should be added into both the expense and income projections.
Of course, all of these costs and income projections are estimates and they will vary, depending on your locations and suppliers. Let them serve as a guide when considering what kind and size of salon to open. Research the actual costs in your area and adjust the tables accordingly. Then, once you’ve been open for a month or two, get in the habit of comparing the month’s bills and receipts with your projections and see if you need to make any adjustments. Also plan to set aside some money every month to cover the cost of maintenance and equipment replacement down the road. Living off of the depreciation of your equipment can give the illusion that you are making money, when in actuality, you’re just taking it out of the business.
When possible, give yourself time to get the job done. The plans take at least three weeks to do correctly if the designer does not already have a backlog. The fixtures can take up to six or eight weeks to come in, so order early. Construction will range from three to eight weeks, depending on size, complexity and many other variables.
Costs have an incredible range. Many designers maintain that they have been involved with 1,000-square-foot installations that cost $200 per square foot, and others four times the size that came in at only $5 per square foot. Design, material and labor are all factors that make every job a unique situation.
The simple picture presented above is made more complex by the addition of retail products to the salon business. A new level of expenses and profits must be factored into the calculations. The simplest way to visualize the scenario is to view the expenses and profits for the salon and retail operations separately and add them together at the end.
The costs are somewhat different in every situation, but from the foregoing, the salon operator can see that a retail operation will create many more challenges for his business than will an operation that is geared strictly to service. Still, most salon people can get some idea of what the total profit/cost analysis would be for each operation independently by figuring the following equations for both the salon and retail sides of the business. The simplified equation tells the salon owner how much it will cost to provide a product or a service and this is how much must be charged to make a profit. At times, the figures are startling and revealing.
In tanning, expenses tend to be continual while business is seasonal, making realistic budgeting even more important. The retail side of the business may or may not have a seasonal base. It would be better if it didn’t have a seasonality to it, or if it did, one that was opposite the tanning business so that one could carry a positive cash flow during the weak months. If, in computation, the salon owner figures expenses by the month for the salon operation, it is given that he knows how much he must charge for the tanning services during that month (no matter how many customers he has) to make back that month’s investment and a profit. Unfortunately, many salon owners cannot just consider their expenses and needs in this business. They must consider their enterprise against the face of competition and the market demands for their tanning services.
The picture for determining profits for retailing is a little different. Here the price of goods is not tied to the number of buyers, but to the number of units. A retail operation has to move so many units during an accounting period to make a profit. Whether there is one customer or 50 customers isn’t the issue.
Volume of goods determines whether the operation can be successful or unsuccessful. If the salon owner or retailer doesn’t feel he or she can move merchandise at the rate needed to make a profit, the salon owner should not consider the retail operation without further planning to maximize profit.
The process of incorporating a retailing operation into a service operation requires an accurate knowledge of the retail sales world and how it works. Presented here is a fundamental analysis of retailing and its most important aspects. Obviously this is not a complete study of the subject, but it does give the tanning professional an insight into the complexities of this exciting and often lucrative field.
Distribution
The salon owner has decided to market a product besides offering the tanning service. Let’s accept as a given that the owner already has selected a suitable product that will work well with his or her established operation. Now the owner must strive to know all he can about the process of selling. This is important information because knowledge of the sales process increases the retailer’s success.
Distribution occurs when a product travels in some way from the producer to the consumer. The means by which the product gets to the consumer is called a distribution channel. These channels can be direct or indirect. A direct channel of distribution bypasses the retailer and goes directly to the consumer. This is a method used successfully by mail-order companies. They send a catalog and the consumer orders directly. An indirect channel of distribution requires the service of several intermediaries between the consumer and the product.
The factory or manufacturer deals usually with a wholesaler or agent that places the goods. The wholesaler works to the benefit of both the producer and the retailer. Because the wholesaler deals with a number of companies, the factory and the retailer don’t have to. If, for example, the tanning salon wanted to order a variety of tanning lotions from a variety of different lotion manufacturers, the work of ordering would be a time-consuming task. The wholesaler makes the job easier. This distributor buys goods (in this case tanning products) from a number of factories/manufacturers at a quantity price, that is a discount.
Because goods are bought at this low wholesale price, the wholesaler can afford to pass along some of this savings to the little retailer who otherwise would probably end up paying a higher price for the smaller volume. The wholesaler then serves both the needs of the factory and the retailer.
In many cases, direct distribution is the preferred method. The flow of technical information between buyer and seller in the industrial market often makes it impossible to use a wholesaler.
The high price of many industrial goods—machinery and large quantities of raw materials, for example—also makes it practical for producers to devote more of their own staff’s time to selling to individual accounts. Producers of industrial goods usually have a smaller number of potential customers. This makes it easier to deal with them without intermediaries. For these reasons, direct distribution is popular in the industrial market.
However, some industrial suppliers do use indirect distribution. Expendable supplies, such as paper, business forms, data processing supplies, as well as office furniture are sold through wholesalers. Tools, small parts, electrical and plumbing supplies are handled by industrial distributors. The advantages for buyers and sellers are similar to those for consumer goods. Other kinds of intermediaries also operate in the industrial market. Brokers, agents and manufacturers’ representatives may perform various roles for buyers and sellers in setting up the final exchange of goods.
Retailing
Once the product is passed on to the wholesaler, the wholesaler’s mission is to get the product into the hands of the retailer. The retailer then will resell the product to the consumer at a price that allows the retailer a profit. Retail units come in all sizes.
Some salons can be classified as small businesses while others are chains. If each salon in a chain becomes a retail shop as well, then the chain can act as one entity to buy and sell a variety of goods throughout all the locations. This gives the salons some leverage in terms of volume buying and shared advertising.
It is not enough for a salon to adopt the new title of retail environment. There are at least five different types and each has a different mission. A salon that begins to retail without a sense of mission is liable to struggle trying to find a product line that fits its clientele. Analyze what kind of retailing is most consonant with the current ambiance of the salon and the way will be much easier.
The prototype of all retail stores is the old-fashioned general store. Here, people found a little of everything mixed together. Eventually, the need for single-line stores evolved. These stores feature only one or two limited and related lines of goods—food, stereos, clothing, etc.
Any shop that answers a specific need can be considered a single-line shop. Within the single-line shops are specialty shops. This would be where most tanning salons would want to concentrate their efforts. The specialty shop limits the products it carries to a particular line within a single line. Because the specialty store only carries that one sub-class of goods, it usually provides a greater variety of those products. For example, most hardware stores (single line) carry knives, but a specialty shop would specialize only in knives, a sub-category of hardware. Here the consumer can find a particular knife that might not be available anywhere else. The same can be true of the tanning salon. The retail operation might offer far more specialized and unique tanning products than anything found in regular drug stores or department stores.
Another kind of retail environment is the department store. Here, the accent is on upscale goods and continual service. Credit usually is extended, and the store stocks a wide assortment of goods. Finally, the variety stores exist offering large quantities of diverse goods but at a lower price.
Ways To Sell
As one can see from the variety of store styles above, different stores have different missions. If the retailer or salon owner wishes to compete, the owner needs to follow the established rules determined by the type of store he seeks to emulate. Most stores naturally will want to emulate the example of the specialty store, since tanning itself can be seen as a specialty item or service. Three major trends dominate most forms of retailing today and predictions point to these formats continuing into the next decade.
Trend 1: Volume Buying. Most retail operations are anxious to cut out the middleman and deal directly with the factory. The idea is that if the retailer can buy in a big enough volume and obtain the same types of discounts the wholesaler gets, he can pass the extra savings along to the consumer. This buys him consumer loyalty. The trend seems to be working with many stores slashing prices and fancy looks in order to give solid financial discounts to the consumer. The danger is that an operation that buys on volume could be stuck with a lot of a losing product. Buying in volume and assuming many of the functions of a wholesaler can be difficult. Profits are certain to be made, so many specialty shops will enter this field in the next few years.
Trend 2: Minimum Service. Many new stores do not value service as a major factor in selling. They feel that service costs them money in labor and expenses. Nowadays, the consumer is an independent creature who would rather pick an article of clothing for herself. The goal is to provide the consumer with needed services (for example, shoe salesmen are still needed to find the consumer’s proper size), but allow the individual space to make personal decisions. Keep in mind that even if you decide this principle applies to the retail portion of your business, it’s unlikely that it will be appropriate for the service portion.
Trend 3: Low Prices. Price wars adversely have affected revenues in tanning, especially in recent years, and the same problem makes retailing especially competitive. Low prices draw customers where other techniques fail. Everyone wants a deal so they go where prices are low. One method for counteracting the low priceseekers is to give them items they want desperately, but can’t find anywhere else. This produces a climate where the retailer has some control over demand and thus can charge a higher market price.
However, the cost of a product places a definite limit on how far the price can be profitably cut. Keep this in mind if you decide the low-price avenue is the one for your business.
Storage, Inventory And Access
A major problem in retailing is getting the goods efficiently to the consumer. Many stores are fine at getting goods out, but often times, the hottest goods are in the shortest supply. Timely ordering and delivery can help, but an empty shelf that should be filled with a hot item can cost the retailer many valuable sales. The objective of distribution management is to keep the store’s inventory low and the accessibility of goods high.
There is a definite logic to this approach. First, the store pays for inventory which, in turn, must be moved, rotated, marketed and sold. If an item isn’t selling, it is killing floor space and the company has paid for a non-productive item. However, a good item that sells well should always be close at hand. When an item is moving well, the last thing a retailer wants is a break in the flow of that product that could inconvenience consumers and harm overall sales. To alleviate large backlogs of inventory, the retailer must control the quantity of stock so it doesn’t take up too much storage space, but also so that it can be reached quickly for immediate sale. For this reason, finding a supplier who has a good, reliable source for the product and offers quick delivery is important.
Selling
The retailer or salon owner must know the proper methods of selling goods. Obviously, the salon owner already should know the market for his salon service, but dealing in hard goods can be a different technique. Selling takes place in three ways. There is personal selling where a salesperson or the product itself confronts the consumer and says, “Buy.” Advertising is the presenting of a product through a medium such as television, radio or the press. Finally, promotion backs up a product through in-store displays, radio contests and similar tactics.
Each time a retailer introduces a product, there must be a promotional campaign. Be it large or small, the promotional package must get the word to potential buyers that the product is available to them. A simple way to promote a product line (such as tanning lotions or cosmetics) is through an in-house promotion with fliers handed or mailed to steady tanning customers.
In any case, promotion can come from two sources: producers and retailers. The producers push the product by offering inducements to wholesalers and retailers to stock the item. They can provide promotional materials or special discounts to help push the product out. The pulling technique is used to stimulate consumer demand for a product. Here the consumer doesn’t see the product at the store first (as in the push method of promotion) they might see it on television. The next time the consumer is in a store, he or she thinks to ask for that product. The producer has created a strong demand for the product and now the retailer will have to stock it.
A successful business depends upon how well a service or product is marketed, and the tanning business is no exception. However, not everyone is a born salesperson and some people need a little more direction.
How do salon owners and employees, whether they be in tanning, nails, massage or body wrap facilities, go about selling packages, lotions, clothing and accessories to clients? There are specific techniques for selling in each of these areas.
Tanning Packages
The vast majority of regular tanning customers purchase their tanning time in packages; an arrangement that is to their benefit as well as that of the salon. The principle at work is that the customer receives a discount on the price of each session in exchange for paying for a number of sessions up front. Within this loose guideline, there are many options for setting up tanning packages.
There are basically three different categories of packages that can be offered with tanning; you can work with minutes, sessions or unlimited packages within a set time period. Effective selling of any package involves spending time with the customer and finding out what they want and need.
Obviously, a person who wishes to get a tan just before going on a vacation is going to need a different package than a person who plans to be tanned for an entire season. If you can diplomatically determine what customers need to satisfy their wants, you can offer them the appropriate package right off the bat and avoid trying to sell them something they can see they don’t want.
Individuals who tan frequently may prefer unlimited tanning within a one-, three-, six- or 12-month period. Infrequent tanners are more suited to session packages, while beginning tanners should go with minutes, due to the fact that their first few sessions may be less than 10 minutes each.
It is important to let clients know that you are trying to cater to them as much as possible. However, you always must be looking out for yourself and your salon. That’s just good business sense.
Try not to quote rates over the phone. Instead, invite potential clients to come in so you can show them around personally and discuss the different package options so they can determine what would be best for them. During the slower seasons you also might offer them a free session.
Whatever you are trying to sell, your success depends upon the way in which you present the product and your degree of enthusiasm. The bottom line is that people will buy anything if it is marketed correctly. Salon owners should offer a lot of trial tanning sessions and discounts. For example, the first time a client buys a tanning package, give him or her a coupon for a discount on some of the salon’s other services or products.
To avoid over-complication, offer a few packages to address your clients’ main needs and arrange special packages for individuals as necessary. Having too many options only confuses the customer, who assumes that one must be a hidden deal. Tensession, 20-session, one- and three-month packages are practical options. According to those in the industry, most customers are interested in the 10-session package.
Lotions
Lotions are taking the indoor tanning industry by storm. In fact, lotions have been the fastest-growing segment of the indoor tanning scene for nearly a decade. When introducing a lotion line to a customer, first ask if they traditionally use lotions. If you find this out right away, you’ll be able to determine how difficult the sale is going to be. If they answer no, you may have a difficult time selling them.
Ask if the client has a few minutes to learn about lotions. Sit down with them and explain the different products, what they do and why they are important. Also, touch upon the principle of why skin tans, so they can gain an understanding of what actually takes place. Clients really need to know this before they can comprehend why lotions formulated specifically for indoor tanning are useful.
Offering a few different lotion lines is very beneficial. It’s important to do this because women like a choice of scents, and men usually prefer something unscented. The easiest way to sell is to let the client smell each lotion and then choose the scent he or she likes best. Also let customers try a dab of each.
If a customer’s skin looks dry, tell them. If they come in without a bottle of lotion, remind them that they need to keep their skin well moisturized when tanning. Use attractive lotion displays, and put them in clear view and within reach of customers. Remember, however, that just having lotions in view doesn’t mean they’ll be a sure sell. You need to put some effort into selling your products.
Clothing
Clothing also has become another attractive additional profit center for many tanning salons. The salons that seem to do the best with clothing are those that have an attractive staff that likes to wear snappy, upbeat clothing; the kind you’re going to want to sell in your salon.
If you’re planning to introduce a clothing line, you should make a bit of a production about it. Close your salon on a typically slow day, send out personal invitations to all your clients and have some of them model your clothing line—like a mini fashion show.
Active-wear sells well in tanning salons because people who tan usually are active, more health-conscious individuals. Swimwear is another particularly appropriate retail sideline. People don’t tan with the intent of keeping it covered up all of the time, and attractive swimwear is a great way to show it off.
Many salons also have found that their peak swimwear season is the winter, when department stores are either out of stock or only have on hand what wouldn’t sell in the normal season. People planning winter vacations to sunny climates may frequent your salon to get a head start on their tans, and if they see attractive swimwear displayed there, they are all the more likely to buy it, since they probably can’t find it anywhere else.
Evaluating Your Salon’s True Potential
We often fail to realize our true potential and the true value of our business. Time and again, the foundation for success is right under our feet or on our computer screen. All we have to do is look. The following story illustrates the magnitude of evaluating your business and realizing your true potential.
“In the late 1930s, in rural Oklahoma, there lived a man named Orville Hatch. For many years he scratched out an honest yet meager existence farming a dusty section of unforgiving acreage. At the age of 75 and with little to show financially for his lifelong struggle, Hatch found himself thrust into the realm of the mega-rich when oil was discovered on his property. He reportedly received $15 million—a fortune even by today’s standards.
However, within one month of receiving the money, Hatch fell terminally ill with advanced pneumonia. As he lay dying in the hospital, he was approached by a local newspaper reporter who wanted to interview him for a human-interest piece.
Hatch agreed, and as the interview progressed the reporter asked the inevitable: “How does it feel to struggle your entire life—and then when you finally hit it big—discover you have just a short time to live?”
Hatch was well prepared with an insightful answer—one that seemed to contradict his folksy, backwoods personality. He looked the reporter in the eye and said: “First, let me say that I am grateful to God for all that I have and for the blessings bestowed, regardless of the timing. However, the real lesson to be learned is that I was always a millionaire but didn’t realize it. The oil was right under my feet for 75 years. All I had to do was look.”
Truth In numbers
When I first heard the story of “Oil Patch Hatch,” the nickname he was given in the article, I passed it off as just another unfortunate case of a person who let opportunity pass him by. Later, as I began closely analyzing salons as part of my consulting business, I began to see similarities between Hatch’s situation, my own situation and that of hundreds of salon owners throughout the world—that the foundation for success often is in place, we just don’t always see it.I recently was hired to analyze the business of a 15-unit tanning salon that opened in December 2003. I had worked with the salon owner on the preconstruction business plan and provided guidance on pricing, as well as sales and marketing strategies. As is often the case, the salon owner gleaned elements from the business plan that she agreed with, then proceeded to copy what other salons in town were doing.
The salon featured nine premium class or base units, four super class or mid-range units and two ultra class or high-end units. After one year in business the salon built a database of 3,048 new customers and generated gross tanning sales of $192,000. Lotion sales were $52,000. The total earnings were $244,000. After deducting fixed overhead, operating costs and other expenses, the salon had a pre-tax gross profit of approximately $45,000. These were very solid numbers for a first-year business, and the salon owner was pleased with the initial returns.
Then it was time to dissect the numbers. Based on $192,000 in gross tanning sales and a database of 3,048 customers, the salon averaged $62.99 per customer. Needless to say, the salon owner was shocked. Despite all the clever pricing strategies and formulas, EFTs, monthly packages and specials, the salon’s average dollar-per-customer was low.
Then I posed a ridiculous scenario: If, when she opened her salon in 2003, she charged $62.99 for a full year of unlimited tanning on the premium-class beds, was there a good chance that many of the 3,048 people would have purchased the package?
“Of course,” she exclaimed. “Who wouldn’t jump on such an incredible offer?”
Just for the record, I am not suggesting that anyone charge $62.99 for a year of tanning. However, when you reverse engineer the financial statements of the typical salon, you often discover that this is what happened.
The $52,000 in lotion sales also sounds very impressive until you divide the amount by the 3,048 people who tanned during the first year. That figure comes to $17.06 per customer for the entire year.
Again I posed a scenario: “What if you took a popular lotion with a price-point between $25 and $50 and gave two free sessions on the ultra-class tanning systems to customers who purchased that particular lotion?”
“That’s giving it away,” she said while standing next to a hand-drawn sign advertising “25-percent off” on all lotion purchases.
Sarcastic license aside, many salon owners do a great job of attracting customers to their businesses. However, they fail to capitalize on the thousands of selling and buying opportunities presented each year.
A well-run, medium-sized salon can generate 20,000 to 30,000 tanning sessions each year. Increasing profits just 50 cents per session can have a dramatic impact on the bottom line.
Just like Hatch, who never recognized the immense wealth trapped right beneath his feet, many salon owners underutilize the revenue potential of the existing customers in their databases. Instead, they put more emphasis on attracting new customers than focusing on those who already patronize the business.
Attracting new, quality customers is critical to long-term success, but you can gain more profit with less effort by focusing your marketing and sales campaigns on the proven entity.
Database Denial
At a recent seminar I discussed my findings with a group of salon owners. While each agreed that they need to do more to effectively increase sales, they all enlisted a similar defense when it came to explaining the actual number of people in their databases. While most salons had 3,000 to 6,000 customers in their databases, the owners were quick to add that up to 50 percent of those customers were not active.When I asked them why this number was so high, they said the customers had just stopped tanning. They commented that the moochers just came for the free tan and they never saw them again. They also believed that those tanners were spies for the competition. However, the reality is that many of those customers are still active-just not at their salons.
If You Build It They Will Come
Of the 3,048 new customers who tanned in the case-study salon during its first year in business, 92 percent, or 2,804 people, had at one time been customers of one of the seven other existing tanning salons in town. Only 244 customers never had tanned indoors before.On average, we can estimate that each existing salon lost about 400 customers to the new salon. And if we estimate an average of $62.99 spent per customer per year, each salon lost about $25,196 in business to the new salon.
In the world of business there are only two types of customers: Those you create and those you steal. I am convinced that most new salons steal customers from existing salons, and only a small portion of the database are new customers. Some people disagree with my observations.
However, logic dictates that the number of new customers tanning indoors could not be growing at a rate much higher than 8 percent to 10 percent. Otherwise, all salons would prosper to some degree and there would be little reason to be concerned about the competition.
So how and why does this happen? How can a new salon open in an established market and quickly inflict such heavy damage?
First, equipment companies will never stop trying to sell new tanning systems, and entrepreneurs will never stop seeking new business opportunities. Therefore, competition is inevitable. It is how we choose to face competition that dictates success or failure. You can sit back and watch it happen, or you can create and maintain a continuous, proactive campaign designed to maximize profitability while keeping existing customers active, happy and loyal.
Special thanks to Jerry Deveney for contributing this article.
Notes:
Expansion Issues
One of the most difficult decisions facing salon owners is deciding whether to expand their business. Fortunately, there are several methods of evaluating your existing business that will help to determine whether a salon owners needs to expand and best time to do it.
Making A Decision
While customers stepping over one another in your lobby and scrambling for tanning time is a clear indication that it is time to add more equipment, it is not recommended waiting until the middle of the busy season to physically expand a business. The mind usually works in the following manner when weighing the pros and cons of business expansion:
THE PROS:
- More equipment will accommodate more customers.
- More customers will increase sales of lotions and accessories.
- More equipment means I don’t have to turn customers away.
- A bigger salon featuring the latest equipment will discourage competition.
- Based on my demographic research and break-even analysis, the new units will pay for themselves quickly.
THE CONS:
- We don’t have the room.
- We can’t afford to purchase more equipment.
- We only busy six months of the year, then the equipment hardly is used.
- We’re not sure if now is the time to expand.
When determining whether to expand an existing salon, the first step always should be to conduct a detailed break-even analysis. The following will help salon owners make a determination:
- How much it costs to operate your tanning systems per session, with regard to lamp depreciation, electricity and general maintenance.
- Your salon’s maximum capacity and how many people you currently must tan each day to cover your fixed expenses.
- How to project profitability and income potential on a monthly and annual basis.
When conducted on an existing business, this also will help determine areas of waste and paint a clear picture of income potential. In addition, the breakeven analysis can tell a salon owner whether a new location has the potential for profitability and the ability to meet income expectations.
Of equal importance, it can be used to help determine whether an existing business needs to expand and can handle the cost of expansion. Based on studies of more than 3,000 salons nationwide, the average successful salon operates at approximately 52.5 percent of maximum capacity or two to three times the breakeven point. The average salon has approximately 1,979 customers in its database (71.1 percent female and 28.9 percent male). The average salon has nine tanning systems or one unit per 220 customers and occupies approximately 1,300 square feet of space.
After conducting a detailed break-even analysis on your salon, the results should then be measured against a demographic profile of your target market. That is, a study of the community to determine how many potential customers live in your target area and the age groups they comprise.
In addition to providing vital information regarding opportunities for business expansion, understanding the population of the market with regard to sex, age and ethnic background also can help salon owners determine the best advertising mediums, dÈcor and location for a salon.
For example, if demographic research shows that you have a high concentration of Caucasian females between the ages of 30 and 39 in your target market, you would then advertise your business via ad mediums that target this group.
Since Caucasian females between the ages of 18 and 49 represent the largest group of tanners (67.2 percent), anyone looking to open or expand a commercial tanning business would want the local population to have a substantial number of people that fit in this category.
Research also indicates that on the average, a representation equal to approximately 10 percent of the Caucasian population will tan at sometime during the year. In areas where tanning is well established and effectively marketed, studies show that this figure may be as high as 20 percent.
Logically, the next step would be to multiply the total population for each age category by 10 percent to 20 percent. This will provide you a good estimate of the number of potential customers in the salon’s immediate area.
For example, if the demographic study of your target market shows the total population of potential customers to be 50,000, you would multiply this figure by 10 percent to 20 percent to reveal the estimated number of potential customers for a target area (i.e. 50,000 x 10 percent = 5,000; 50,000 x 15 percent = 7,500; 50, 000 x 20 percent = 10,000).
As stated earlier, the average successful tanning salon utilizes one tanning unit per 220 customers. Therefore, an area with 5,000 potential customers could support approximately 23 tanning units, (5,000 divided by 220 = 23). An area where is well established and effectively marketed may support up to 45 units (10,000 divided by 220 = 450).
After a thorough break-even analysis and conducted and the population has been researched for your target group, an educated decision can be made how many tanning units your salon can support and if your financial goals are achievable.
For example, your break-even analysis indicates that you need to tan 900 people each month (30 per day), to cover all your fixed expenses. You find that during the busiest months of the year you can achieve this figure, (or the income represented accordingly), by the 10th day of each month. In fact, most days you operate at two to three times the point of break-even.
Demographic research of a target market further reveals that are 5,000 potential customers in your area and there are currently only 15 tanning units in operation. Given these circumstances, it appears your business could support more than equipment.
To further reinforce the analysis, the next step would be to program in the extra units you intend to add into the break-even formula. This will determine exactly how the addition of the new equipment will affect the existing conditions at your business.
Adding more equipment will increase your maximum capacity for tanning and profitability. It also will increase fixed overhead with regard to the cost of the equipment, building more rooms, renting a larger space, adding additional employees, etc.
It is important to note that in most situations where a salon is adding one or two more units, fixed overhead such as rent, telephone and labor does not dramatically increase. The break-even analysis will verify this and allow salon owners to determine exactly how much sessions must be generated each month to pay for each individual cost center.
While the break-even analysis and demographic research will provide excellent guidelines, other important factors also must be taken into consideration.
Markets where competitive salons are mismanaged or feature outdated equipment always percent prime opportunities for growth. When calculating the number of tannin units a market can support, outdated equipment and mismanaged salons should be discounted accordingly.
Remember that mathematical calculations and evaluations are just part of the overall equation. Your own business instincts regarding conditions in your marketplace are of equal importance. The break-even analysis and demographic research are designed to provide guidelines only. They cannot predict actual market performance.
Finally, regardless of whether you intend to expand, it is advisable to conduct a break-even analysis on your business every month. Salon owners also should have a demographic profile conducted on the target market.
All of this information will guide you in the successful operation of your business, whether you have two tanning units in the back of beauty salon or a full-fledged 30-unit tanning salon.
Salon Location
When people are trying to start a business, they often seek the counsel of others who have been in their situation. For those that have a business, or even those that went out of business, one of the most important pieces of advice they can give a potential owner is where to build. As the old adage goes, the three most important aspects of opening a new business is location, location, location.
Study The Area
Knowing where you want to build is the first step in any business plan. Starting with a general area, and moving down to more specific locations, business owners need to consider more than the size of the space. They need to consider traffic flow, view from the street and distance from competition, otherwise known as a needs assessment.
Dean Bellas, president of Urban Analytics, Inc., a demographic consulting firm in Alexandria, Va., says a needs assessments is the cornerstone of any good business plan and a definite start to finding a prime location.
“You need to figure out where you are going to draw your business from,” says Bellas. “Are you the type of business that draws from street traffic or are more of your customers centrally located so they come to you—these are considerations for all businesses.”
For small business, such as a first tanning salon, Bellas recommends working with local agencies and government departments to figure out such things as job market and zoning ordinances—most government agencies offer information for free or at a nominal cost compared to hiring a demographic consultant.
However for companies that have the money but don’t have the time to do all the foot work, hiring a demographic consultant eliminates the properties that will not work—fine tuning the location search.
“Those that are starting a business for the first time may not realize the thought that goes into a location,” Bellas says.
“Locating the generic data from a free source may help point them in the right direction.”
Demographic studies are, of course, very useful when working on a business plan and may, in the long run, be worth the original investment; however, small businesses, do not often have the budget to do large demographic profiles of the area that include shopping habits, median age and housing studies. Therefore, one of the best pieces of advice current salon owners can give future owners is to locate near major retailers and chains opening in the same area.
Large chains and retailers can spend, and do spend, thousands of dollars studying the population, housing and buying habits of the area they are about to purchase. They also tend to conduct in-depth traffic flow studies and can afford to work with the city or county to create better land use around their properties. By locating in an area that contains a large superstore or chain, small-property owners are aligning themselves with bargaining power for the future.
Know Your Audience
Since the indoor tanning industry is patronized primarily by females between the ages of 18 and 49, understanding their spending patterns and the demographics of the area in which the property is located can be important.
Knowing who the salon will sell to is a necessary trick of the trade that can mean the difference between success or failure. Oftentimes equipment manufacturers or local franchise operations will help in creating a demographic survey of the surrounding area, making the decision to locate easier for the salon owner.
“For any business, there are key needs that have to met in order to be successful,” says Bellas. “Customers—how you get them, where they come from and how you will capture new ones—are the backbone of all operations.”
He recommends locating near a customer base that works with your clientele. Since indoor tanning is predominately female in the young to middle age range, locating next to a university or school setting, or even in a downtown location near large office buildings, would be prime location for salons. In addition, business owners should look for the 100-percent corner—or the one location that everyone, from pedestrians to commuters to public transportation, can see from any vantage point.
According to Bellas, the 100-percent corner is a location that provides maximum exposure to the business, making success almost definite.
“Salons need that visibility,” he says. “Their success depends on attracting customers to the shop.”
In addition, recent studies of all types of business have shown that the service industry—which indoor tanning is a part of—continually is growing by leaps and bounds. According to a study of the Standard Industrial Classification system by American Demographics, more than one-third of U.S. jobs are provided by the service industry, with businesses tied in with amusement and recreation (such as indoor tanning) seeing 26 percent employment growth and 23 percent of all taxable sales.
Finally, try to find an area that is continually seeing both population and economic expansion. Projections generally are available at the census tract or block group (a portion of a census tract) level of geography and include data such as population, households, age and income. Apartment dwellers often are a great customer base for salons, especially those centered near university areas.
The Inside Counts
Knowing demographics and finding the perfect location will do nothing for the salon if there is not ample room for the creation of a professional salon. Customers continually are looking for a salon that has the look and the respectability of a professional business. That is why location is not just the outside but the inside as well.
“Size is a very important aspect in making a location decision,” Bellas says. “Most small businesses originally start out renting a location and must consider what will happen when they grow and need to expand.”
Space limitations come with the creation of an indoor tanning salon. Separate rooms for the beds, as well as front counter display space and a lobby area are all considerations a first-time buyer must contemplate. He says demographic consultants offer a basic consideration for all types of businesses, such as retail space should be at least 450 square feet per employee, or an office building should have 300 square feet per employee. However, that does not include such things as lobby area, bathrooms, even kitchen areas.
Other issues include the dictations of local zoning ordinances. If the property is not zoned for service, placing a tanning salon could mean more work than necessary. Yet, when a salon owner comes across the perfect location, he or she would be hard pressed to forget it because of a zoning requirement. Going before the city council or city zoning commission could be as easy as proving you are bringing in a viable industry.
In addition, most equipment manufacturers and even tanning supply distributors can assist new salon owners in the creation of a blue print for almost a complete turn-key operation. Know where to look for advice and work with experienced indoor tanning professionals to create the ultimate salon from the get-go.
“Once a person looks at space considerations, then they must consider affordability,” Bellas says. “Other than rent or lease, there will be business expenses for electricity, telephone and, if necessary, Internet hook-up.”
Making A Location A Success
All these considerations and more are what makes choosing a location such an important step in the start of a business. By working with those that have experience, or hiring someone that has worked with indoor tanning salons in the past, a salon owner may be better off. Yet for many, the dream of owning a tanning salon comes with the hunt for the perfect location. “What is most important is determining the potential size of the business,” he says. “Look not only at the now but at the future as well.”
Choosing Your Salon’s Name
Choosing a business name is the first and most important step any small company can take. How will the name look on the sign above the door? How will it stand out in the Yellow Pages and where will it show up in the directory? Will the name entice customers to visit the salon or cause them to avoid it altogether? The answers to these questions—and more— are part of the name game.
Few businesses take the time necessary to come up with a successful business name, consultants agree. Naming is just like every other step of running a business, in that owners should do it as well as possible, says Chris DeMassa, president of TradeMark Express in Los Altos, Calif. “It’s the face of your business. It’s what you’re going to be recognized for and it’s how people are going to remember you.”
In fact, a name is more important for small businesses than for large ones because the small businesses tend to have smaller budgets for other types of marketing and therefore must rely on their name more for recognition in the market, says Hal Meyer, CEO of Wakefield, R.I.- based Naming Systems. Nan Budinger, principal of Metaphor Name Consultants in San Francisco, agrees. “It’s a way to make a good first impression and to immediately communicate something that’s important and distinctive about who you are and what you’re offering,” she says.
A business should be named for its audience and not for the owner. “What is it that your audience needs to know and understand about your business for you to be appealing to them?” Budinger asks. “Cute in-jokes among your family and so forth have no relevance here.”
The name also should stand up in the long-term, Budinger says. “Avoid terms that are going to date you and make you sound silly three to four years down the line. Think of it in terms of groovy. That term dates you immediately, and it makes you sound very foolish two seconds after groovy was inappropriate.
You don’t want to name yourself with verbal bell-bottoms.” Some say anything goes, however, as long as the name works in the industry. “There are businesses that have clichés or that have cutesy names,” Meyer says. A business such as Krispy Kreme “carried off” its name, he says.
“You want something that’s memorable and distinctive,” Meyer continues. “If you’re naming a business, figure out what the safest thing is to call it and go the totally opposite direction. Get the craziest, wackiest, most far-out thing that you can possibly create and use that, because that will cause people to remember it.”
Trademark Issues
The craziest, wackiest name also is less likely to be used by another company. Trademark issues could cause a huge snag for a small business, so doing the preliminary research is crucial. Search the U.S. Patent and Trademark Office (www.uspto.gov), which has a database of registered and pending trademarks as well as a how-to page that explains the process of acquiring a trademark.
“It’s a really good idea these days to check to see if the trademark is available, because you don’t want to invest in having all your signage, your stationary and all of this done to find that a national chain owns the trademark on your name and that you will therefore need to change it,” Budinger says.
“It’s crazy not to do research,” DeMassa adds. “We see a lot of people who never do searches. They figure that their use is so small, that it’s not a problem. That’s not true. They’re affected by products, also. They don’t know that. Products are much more likely to affect them, and they’re going to be sold nationally.”
Also, the tanning industry is mature, DeMassa says, meaning there are many creative names already in use and not many left for the taking. For that reason, it’s important to make sure a possible name isn’t being used by another business.
Because of the sheer volume of trademarks on the state level, DeMassa recommends hiring a search company or attorney to assist in the naming process. “There’s no way to search it otherwise,” he says. Naming companies have more experience in research and also can use their talented staffs in the naming process.
Between $2,000 to $5,000 will get unlimited naming, unlimited legal research, access to a trademark attorney and application preparation at TradeMark Express. The company generates a list of creative business names first, then does the due diligence on those names. Other companies will find out which names are available and put together a list from there, DeMassa says.
Meyer says the cost will be between $5,000 and $50,000 depending on the size of the company and scope of the naming program.
With so much riding on a business name, the money it costs to hire a naming professional is probably well-spent. At the very least, future salon owners should dedicate an appropriate amount of time to the naming process if they choose to do it on their own.
“It should be taken seriously, with some effort put into it,” DeMassa says. “Try to accomplish something more, something that stands up well with the competition, that accomplishes some of your marketing plan. It’s a step to be taken. Why not take the right step?”
12 COMMANDMENTS OF NAMING
1. Think big. Even if you are planning a local business, plan for your future, which can include national and global expansion.
2. Avoid “me too.” The point of marketing is to stand out and be different. Copycat schemes don’t deliver.
3. Keep it simple.
4. Keep it memorable.
5. All things equal, an alphabetically desirable name helps— a lot.
6. Watch out for undesirable connotations, both in English and in other languages.
7. Watch out for trademarks that belong to other entities.
8. Try to connote what you do or offer or the nature of your product/service.
9. Get outside viewpoints. The more good minds, the better.
10. Allow yourself the possibility of imperfection, and consider the opinions of consumers and focus groups. Allow yourself the freedom and right to rename yourself or replace obsolete names.
11. Don’t underestimate the value of a good name.
12. Own the dot-com extension of the name.
Reprinted with permission from Naming Systems. For more information visit www.namingsystems.com.
Marketing, Promotion And Advertising
Salon Marketing
Often a misunderstood term, marketing in its broadest definition encompasses every facet of running a business. Marketing includes choosing your location, deciding on type of services, interior decorating, buying equipment and products, hiring employees, setting prices and planning advertising. In short, a marketing plan is everything that goes into providing a tanning service to your customers.
When you decided to go into business, you undoubtedly believed that your salon could provide a needed or desired service to the community. In exchange for this service, you expected that the community would pay a reasonable price. All of the principles of marketing rise from this simple scenario.
Simple marketing procedures are inherent in the basics of operating any business, including an indoor tanning salon. However, to make a business boom, you need to pay particular attention to the entire marketing scheme. You must be aware of what you are and aren’t doing to enhance the climate in which your tanning services are performed.
Define Your Own Marketing Success
In order to have a prosperous year, a salon owner must be prepared with a creative, well-organized marketing strategy and an advertising budget large enough to accommodate the entire year’s plans.
Many times, salon owners mistakenly assume they can be successful by focusing on either their marketing or their advertising. However, the most successful businesses realize the two go hand-in-hand, and are not just interchangeable elements.
First Steps
Marketing—By definition, marketing is the act or process of selling or purchasing in a market; the process or technique of promoting, selling, and distributing a product or service; an aggregate of functions involved in moving goods from producer to consumer.
Advertising—By definition advertising is to make something known to; to make publicly and generally known; to announce publicly especially by a printed notice or a broadcast; to call public attention to especially by emphasizing desirable qualities so as to arouse a desire to buy or patronize; to promote.
Blast From The Past
The first step in planning marketing strategies for the year ahead is for the owner and staff to assess the previous tactics used during 2005 and decide which were the most successful. In trying to determine the success of a specific promotion or advertisement, make sure to evaluate its ability to attract new customers, drive sales and increase profits.
Take a look back at the amount of money that was spent, in what areas, what time of the year, and in what form. If you’ve truly tested the waters, you will have a variety of information to work with—examining the effectiveness of your efforts with the local paper, Yellow Pages, radio, coupon mailers and other mediums.
Another resourceful strategy when trying to allocate the areas of spending is to survey the people who mean the most—your current salon customer base. Keep a piece of paper behind the desk and each time a customer comes to tan have the employee working ask them to list their favorite picks for print, radio and television stations. This not only will help reveal the most popular choices but also will make the staff and customers feel as if they are a part of the decision-making process.
Before you make your plan for the year, find out as much as possible about the competition. Begin this process by collecting all tanning-related promotions found in the Yellow Pages, local papers, coupon mailers, radio and television commercials and surrounding school, business and local advertisements. It is also necessary to evaluate their equipment, atmosphere, and pricing structure as well as the professionalism and level of tanning knowledge of the staff.
This may be accomplished either by making telephone calls or by sending in a secret shopper to personally observe the environment. Learning what the competition has to offer helps a salon owner to confirm that the amount he/she is charging for tanning packages and memberships is justified. Verification can be achieved by comparing all aspects—and the level of standards—at your salon to what is being offered by surrounding local tanning facilities.
If, in your comparison, you learn that your prices are higher than those of your competitors, keep one important fact in mind; it is not always necessary to be the salon with the lowest prices in town. In fact, starting a ‘bidding war’ with the competition can be—and usually is—a huge mistake that is very difficult to reverse.
The best alternative is to make sure that the services being provided are at the highest level of standards possible. Then make it the priority of the salon and the staff to ensure that every customer understands the value of what is being offered—and how it is superior. New customers are especially important in this process since a majority of the people will begin by ‘price shopping’ at several locations before choosing a new tanning salon.
Money Matters
Once a salon has reviewed its marketing strategies, it’s time to analyze the amount of money to allocate for the new year’s advertising budget. This is a report that the salon owner can request from the accountant that should be easily accessible.
For the owner that does his or her own books, the advertising expenditures always should be kept separate and year-to-date totaled, so this will hopefully not be a difficult process. Take the total amount of money that was spent on advertising from the Dec. 1, 2004 through Nov. 30, 2005. Divide this total by the gross income for the salon through the same dates. The result is the overall percent of the annual gross income that was devoted specifically to advertising.
This assignment is very simple to figure out and is essential in the process to be as efficient as possible with the funds. For example, a salon that grossed $150,000 and spent $8,000 in advertising will have spent 5 percent on its advertising budget for the year. The minimum consideration that a salon should spend in advertising in order to expect effective results is at least 3 percent of its annual gross income.
As the assessment of the budget is determined, a salon may choose to increase that amount anywhere from 5 percent to 7 percent. The focus of this growth should be the reflection of successful advertisements and promotions being increased. If this chain reaction works correctly, the effect should cause the gross sales to grow and therefore the amount dedicated to the advertising budget would get larger.
Selling Strategies
Tips To Make A Good Salon Even Better
Staying on top of the most-effective sales techniques is key to any business. The difference between a good salon and a great one results from the successful execution of the following components.
Education
Not only is education the key to a successful salon, it’s also a vital part of increasing sales potential. An employee that has been certified in the basic aspects of tanning—and fully trained on all products and equipment within the salon—will gain both confidence and credibility. A customer will feel a higher level of comfort when they trust that the tanning consultant is qualified to help them make a wise purchasing decision. An employee that understands the benefits of all tanning products, especially which ones would be good candidates for different tanners, is a valuable asset to any salon— and every potential customer.
Customer Service
Customer service is essential in all areas of business—and that holds especially true to the tanning industry. A salon that is kept spotless, has the most beautiful, up-to-date, well-maintained equipment and a wonderful location still is not immune to losing customers if those tanners are not happy with the treatment they are receiving from the staff.
With the growing number of tanning facilities opening every year, it is now more important than ever to treat the customer as the No. 1 priority. There are a few options that the salon owner can use to try to evaluate the performance of the staff when the owner is not on location.
The most expensive method is to install a surveillance system that monitors everything—from the amount of time and attention that a customer receives to the day-to-day behaviors of employees, such as cleaning procedures, inventory control, friends loitering and overall operation procedures.
Another suggestion is to designate a secret shopper. There are professional companies that can do this work for a charge, but it is usually just as easy to find a friend or family member who will perform the service in exchange for tanning and products.
Before the inspection, make a checklist of specific areas to be evaluated—and tell the secret shopper to fill out the information before they tan so it is still fresh in their memory. Include questions such as, “Did the employee tell you about the lotion of the day?” and “Were you reminded of the importance of wearing protective eyewear?”
The least expensive option available would be to place a comment box in the salon. Buy one with a lock or the complaints mysteriously will disappear and the compliments will be plenty.
Post a sign stating that customer service is the top priority of the salon. Mention that the management would love to hear if the customer had a pleasurable visit—and if not, they want to know what they can do to improve the service next time.
In-Room Promotions
A salon owner has to take advantage of the amount of time that they have the customer as their captive audience. Once a tanner shuts the door to their room, they spend anywhere from two to five minutes preparing for their tanning session.
Place a suggestive selling sign or poster in plain view so that the customer will be exposed to a purchasing idea—before they are exposed to the ultraviolet light. The information even can be an educational poster that answers the question, “Why wear eyewear?” or “Why should I use a lotion when I tan?”
A salon with various types of equipment and levels of tanning can hang posters of the equipment—along with a description as to the differences—to try to entice the tanner to upgrade on their next visit.
Another option would be to post images of new products, or the lotion of the day, week or month. This can be a flier produced by the manufacturer that lists all of the qualities and properties of the specific products. A tanner that may not take the time while standing at the counter to let an employee explain all of the benefits might, when alone, read something—either before or after their session—that peaks their curiosity.
Combo Deals
To increase SPF sales, create a combo deal for spring breakers and vacationers. Include a tanning package, an accelerator to use while tanning at the salon and an SPF to use when they reach their destination. Add up the total for all three items separately and then offer a discount when the items are bought as a group.
Make sure to display the savings to show the value of the multiple purchase. A customer that might not usually buy the SPF at a tanning salon could be persuaded by the combo deal—when it is promoted correctly. If a customer feels like they are saving $20, they may not notice that they are spending $16 more than they had planned.
Employee Motivation
Employee motivation is a very easy and inexpensive way to increase sales within a salon. Hold a friendly contest that is tracked in the salon and keep the current statistics visible at all times. One example would be for the salon owner to pick a lotion and say that the first person to sell twenty bottles wins. The prize can be as simple as a free tanning product of their choice or a gift certificate to a popular local restaurant.
Every day, update the chart with the progress of each individual employee to keep the rivalry going. As the contest gets close to the end, it is amazing to see the sales efforts of the staff.
This same procedure can be used with tanning packages and EFT memberships and can be held anywhere from a single shift to an entire month or through the whole year. It is possible to run more than one contest at a time, but don’t over do it or allow things to get too confusing. Remember to be creative and ask the employees to help with suggestions for the contest and the prizes.
Trade-Ins Welcome
This final idea can be very effective—not only to increase sales but also to convert a customer to begin using a product that is offered in the salon.
When a customer comes to tan and has a tanning product that is not available on your shelf, offer them a discount to trade it in for a product sold by the salon. If the customer is reluctant, just inform him or her that it is perfectly fine if they use up their entire lotion—and when it is gone, bring in the empty bottle for a discount.
The employee should be able to recommend which product is comparable to the customer’s current lotion. The staff member should ask questions and be positive. For instance, the employee could ask the customer what they like and dislike about the product they currently are using.
Remind employees to be very careful not to suggest that a customer’s product is not good. They should be sensitive to the fact that a tanner could feel embarrassed if the suggestion to use a different product is not handled skillfully. The emphasis should be on explaining the advantages of the recommended product and the qualities that are similar.
According to almost any marketing text, the primary points to keep in mind in devising a marketing plan can be distilled to four essential areas or the Four Ps—product, price, place and promotion.
The Product
Before placing an item on the market, a company must conduct a large amount of research to come up with a product and its accessories. Product planning involves the entire process of investigation that goes into the making of a new product. Some of these steps include:
- surveying consumer needs
- design
- buyer expectations (meeting them)
- determined final needs
- brand name
- packaging
- services that accompany product
The product isn’t just a physical entity to a consumer, it is a physical entity that suits some purpose and completes some need. Many excellent products have failed because they are clever items but no one needed them.
Product development is an ongoing affair, and every manufacturer has new products, products at the height of their maturity and products in decline. Each of these products experiences a lifecycle that begins and ends relatively quickly.
In tanning, the first widely used tanning systems were quartz lamps, initially used for the treatment of disease and later picked up for recreation and beautification. This product, like any other, went through a period of popularity and then entered a decline.
Modern tanning began with the introduction of UVA lighting systems and, since the introduction of modern tanning equipment, the products have gone through several phases. New models and refinements of old ideas are being changed constantly for new tanning equipment. They are becoming more efficient and reliable.
In a toy store, the product is a toy. In a plant store, it’s a plant. In a salon, the product you are selling is the tanning session or any of the other ancillary services you provide. It isn’t a tangible, concrete item, but it is a marketable product nonetheless.
When a large corporation decides to begin production of a new product, it does a great deal of research to determine what features will entice the desired audience to buy it. It then sets out to design a product with those features that will be attractive to the audience.
Are you catering to the under-30 age group? To women aged 30-50? To retired persons? To professionals on their lunch break or on the way home from work? It is entirely possible to offer services for all of these audiences in one facility, but the needs and wants of each group will be different.
Those in the first group will be receptive to tanning and to a variety of fitness and beauty services, but it may take some personal selling to hook them on some of your other ancillary services.
Professionals at lunch are pressed for time. If they can take the time to come in, they will be in a hurry and may book appointments well in advance for quick tanning sessions. They may pass up other services, unless the session time is short. On their way home, time is often less of a factor. After a busy day, a stop at your salon may be considered time to unwind. While a fast tanning booth or a 10-minute bed may be the ticket for lunching yuppies in a time crunch, a slower bed with a good sound system could be the key to reaching rush-hour relaxation.
In assembling and re-evaluating the product line of your salon, then, you need to visualize the prospective audience for each service and then look at ways to tailor that service to that audience. Certain services will lend themselves to a particular audience and vice versa.
Price
Price is still one of the guiding factors that companies live by because it represents the power of logic and marketplace. A product must be sold at a price high enough for a company to make a profit but low enough to entice the consumer to buy it. More specifically, a producer will consider a number of factors when structuring the final price:
- cost of production
- consumer price attitudes
- competition pricing
- laws governing fair pricing
- industry pressures
As a general rule to fiscal happiness is never regularly sell something for less than it costs. That is not to say that you can’t give free promotional sessions to boost your potential customer base, just don’t make a habit of it.
There are other ways of getting new customers into your salon. In figuring what each session costs you, simply add up your costs for a month and divide by the number of sessions taken. If you take everything into account—including utilities, space, rent, payments on the machinery, maintenance and payroll—you should come up with a fairly accurate per-session cost. Include the desired profit and the result is the target price.
However, your target price may or may not be attainable, depending on many market conditions. If your competition is charging less for an identical or similar service, it may not be possible to make the profit you want without distinguishing your service in some way. In tanning’s early boom phase, price wars became common and drove many salons out of business. The principle at work was that the more business a below-cost price generates, the more it hurts the company.
Think about it. Suppose salons A and B are both losing $1 per session because of their price war. If A is “winning” and is running 150 sessions per day to B’s 75 per day, salon A is losing $150 a day to B’s $75. They’re both cutting their own throats; salon A is just doing a better job of it.
On the other hand, if salon B combated the price war by selling sessions at cost and lost another 25 sessions to salon A because of the price difference, it would be running 50 sessions per day and breaking even. However, salon A would be tanning more customers than ever, but paying $175 every day for that privilege.
Maximum price will vary by region. Generally speaking, the going or market price will stabilize at a value determined by the community as a whole. If every salon in your area is asking $7 for a tanning session, you may have difficulty charging more unless the service you offer is perceived to be better or special in some way.
For example, if you can offer a first-rate service in correspondingly elegant surroundings, and you can communicate this to the right clientele, you may be able to persuade them that the difference is worth a higher price.
Pricing Strategies
There are a number of other ways to price services and products. Loss leaders (normally supermarkets) take a loss on some items in the hope that the consumer will come in and buy other items on which the retailer can make a profit. Salon owners try this on a temporary basis by giving inexpensive tanning sessions and then making up the short fall on more expensive packages.
Flexible pricing means that the unit cost of an item is negotiable. That is, the manufacturer can afford to sell the same product at different prices to different levels of the retailing chain. For example, a manufacturer of tanning equipment can afford to sell its equipment to a wholesaler at a reduced price but would only sell at a higher price to an actual salon owner. There are two actual prices, but only one for each market.
Multiple unit prices are like quality discounts—the more you buy, the less you pay per item. Two effective strategies are skimming and penetration pricing. Skimming means getting the most profit from a product or one with limited competition. The policy quickly changes when demand lessens or competition enters the scene. Penetration pricing is charging an artificially low price (similar to loss leaders) and hoping to make up for it with dramatic sales. The low profit margin discourages competition and provides substantial benefits to consumers.
Both skimming pricing and penetration pricing have been applied to tanning with mixed results. When many salons opened, there was little competition and several salons took advantage of skimming prices to maximize their profit. Competition hit these salons hard and forced many into competitive price wars. Other salons that later entered the market tried penetration pricing but found it difficult to service heavy client loads and maintain an adequate profit margin.
Commercial tanning systems equipped with various options will run anywhere between $2,900 for entry-level units to $40,000-plus for high-end units. When examining equipment costs, take into consideration the return profit potential that the system is able to produce. Average session costs vary from $5 to $12 for lowpressure tanning. Generally, equipment with a longer recommended exposure time such as a tanning bed would have a higher cost factor when establishing a pricing schedule. Therefore, the shorter the recommended exposure time, the easier it is to establish more competitive pricing and the greater the profit return.
Based on a 15-minute session time at $5 a session, it would take 1,200 sessions to recoup a $6,000 investment. Realistically, this could be accomplished easily in less than two months, providing your service is promoted properly.
Place
Once the manufacturer decides what to produce and how much to charge for it, he has to get it to the place where a potential customer will buy it. Among the considerations for product placement are the following issues.
- Where will customers shop for the product?
- What is the best perceived location?
- Does location affect the quality appeal of the product?
- Will consumers know to look for it here?
- Are there other locations that are overlooked that could be suitable locations for the product?
Whatever location or locations a manufacturer chooses, the main point about a place is the consumer’s expectations. In the past, consumers have bought products like the ones they’ve bought before, by looking for the product in the locale where new and old products are grouped according to category.
The process of placing the tanning service is a difficult one because the salon owner must select a location that will draw in the most tanning customers. Attractive display shelves and point-of-purchase displays within the salon warn the consumer that this is an opportunity to purchase. One way the manufacturer places his goods is with a wholesaler who in turn distributes them to locations where they will get the best attention.
Convenience is very important in our society, and unless a product or service is important to people, they won’t go out of their way to purchase it. Therefore, having decided on your primary audience and what will appeal to them, you must find a way to offer it in a location that is convenient to them. That may mean that it is near their home, their work or other places they frequent.
It is also important that the location mesh with the other facets of the marketing plan. If rent is prohibitively high and will push the cost of offering the service beyond your target audience’s reach, the convenience of the location is irrelevant. Or, if the salon is in a seedy part of the downtown district, and your target audience is young female professionals, it doesn’t matter if it is close to their work or if the rent is low.
The particular requirements of the services that you offer also must be considered in choosing a location. At the very least, minimum space requirements must be met. If you anticipate a bright future, you should make sure there is room for expansion.
If your service is unique or is perceived to be more desirable than that of your competition, you may be able to get away with operating in a less convenient location that accommodates those features that make your services distinct.
As long as your potential customers know about you and will go out of their way for what you have to offer, the location may not be a major handicap.
In choosing your location, keep in mind the overall image you want your salon to portray. If you’re aiming for an upscale, elegant salon, you’re going to have to locate in similar surroundings. Its decorating style also will have to be correspondingly tasteful. Even with an existing salon, you must be aware of how the location is working to sell your product. In any service industry, it is imperative that the space be clean and attractive and promote the type of atmosphere you want your salon to convey.
Promotion
The act of promotion is creating an interest in your product by a variety of methods. Many excellent products languish because they lack the proper promotion. They never capture the public’s attention, and therefore, never reach a broad market. Specific means of promotion include:
- advertising
- packaging
- branding
- personal selling
- sales manuals
- dealer cooperation (displays/rebates, etc.)
- coupons/premiums
Most salons have small budgets for advertising, if they have any budget at all. It makes sense then to try to ensure that those few dollars are spent as wisely as possible.
Before you pick up the phone to call the local newspaper and arrange for an ad, stop and think. Do the customers you want to attract read the paper? In what section will an ad reach them in the right frame of mind? What should the ad say to get their attention and then make them want to come into your salon? Is a local radio station a favorite of the desired audience? Might fliers distributed at a local mall work as well? Can you get hold of a mailing list specific enough to make direct mail pay off?
After you choose and run an ad, make sure the dollars were well spent. Get in the habit of asking new customers where they heard about you and keep track of their responses. You’ll begin to see patterns indicating the effectiveness of different promotional efforts. Keep those patterns in mind in future advertising decisions and you will see results without wasting advertising money.
A fifth “P” inherent in making decisions about each of the other four is People. Meaningful marketing decisions always must take the desired customer into account.
The four Ps, then, are the basis of any effective marketing scheme. The effective and efficient interrelation of them may not guarantee success, but it goes a long way in that direction.
Creating An Image
The single most important resource a salon can have is its staff. Thousands of dollars can be spent on advertising and equipment and offer freebies to get customers into the salon, but if they’re not treated well, they won’t be back. And no salon can survive without repeat customers.
On the other hand, what better promotion can there be for a salon than to have courteous, helpful and attractive employees ensuring that everyone who comes in has an enjoyable visit? You’ve been in restaurants where the waiter ignored you, or in stores where the sales staff knew less about the product than you did. It didn’t leave you with a favorable impression and you certainly don’t want your clients to have a similar view of your salon.
Building the perfect staff starts with the hiring process. Staff your salon with friendly, attractive, healthy looking people. Tanning is a vanity business and the more you can appeal to your clientele’s sense of beauty, the better off you’ll be. Let your staff use the equipment for free. You will see two benefits: they will look better and will know more about how it works. Both help your salon.
Make sure they are well trained in the services they administer. Your customers, for the most part, don’t possess a detailed knowledge of how the service works or even what it is supposed to do. They will be much more comfortable if your staff can answer their questions correctly and confidently.
Finally, give them some incentive to promote your business. A commission of a few dollars for introducing a client to a new service or for bringing a new customer into the salon is a very cheap way to improve your cash flow.
Your clientele is another excellent promotional resource. If you don’t already offer them incentives to refer friends and acquaintances to your salon, start now. You’re missing out on a huge network of potential customers.
As many salon owners know, grand openings and re-openings can be a fun— and reasonably priced—way to open a new salon or to recharge an existing one. Most tanning equipment manufacturers and lotion makers have some great ideas—and contributions—to help salons with these events.
Before you can get the party started, you have to determine how to get people to your event. Begin by deciding on your best form of advertising. Remember that a large majority of tanners are apartment renters—and that most apartment complexes have monthly newsletters that they distribute to their tenants. With a little legwork, you can advertise your event directly in the contents of their newsletter or in an insert.
Next, by calling around to newspapers, ad mail companies and other advertising agents, you should be able to get an idea of who best serves your area for tanners— with the typical demographic of women 21 to 45 years old.
Local papers, value pack mailers, fliers and handouts work the best and are the most economical. Also look into some popular area radio stations to see if they will hold a two- to three-hour live remote at your location. Ask the station for a DJ that actually will hold part of his broadcast while tanning in one of your best beds.
Have the radio personality award a tanning session or product for the first three or more people that come in to see the disc jockey’s new tan. A nice door prize, such as a trip for two to a sunny location—with the winner announced during the remote—also can be a very positive draw.
Check locally with travel agents for a discounted rate on the trip. They also can be an essential sales tool—both for your trip and for their customers traveling abroad that could use some SPF from your beds before their vacation.
Finally, don’t forget to tempt the passersby. A temporary outdoor display close to the street is very beneficial in that it advertises your opening date as well as your specials—24 hours per day—right in front of your location.
Your event will be more successful if you properly train your employees for it. Once your staff is hired, hold a private party for them to let them know how important they will be in making your function a success. Motivate them the easy way—by offering commissions on all packages and lotions sold during your opening.
Teach them how important it is to really show your customers that they are appreciated. Remind staff members of strategies you might think are nobrainers —such as introducing themselves by their first name when a customer calls in for information. This simple tip is a great way to start a new, long-lasting relationship. Your employees will find that when these clients come in to visit, they generally will ask for the associate that they spoke with on the phone.
Instruct employees that when potential customers enter the salon, the staff member should come out from behind the front desk area and give them a smile, eye contact, and a firm handshake.
They should ask guests how they heard about the celebration, and keep record of the responses so you know which ad sources to use at your next event.
With your staff knowledgeable and enthused, complete the finishing touches. Definitely make sure you have stocked up on products—from lotion and swimwear to goggles. Besides your standard stock, some manufacturers actually will send a representative to your location with lots of samples and promotional items for you to give out— at little or no cost to you.
Last but not least, drag in your cooking grill from home. Although it may sound silly, people want to be catered to and have fun—and burgers and hot dogs fill that need year-round.
The fare is affordable and easy to keep preparing throughout your event. If you don’t feel comfortable grilling, check with a local sandwich shop. Most will swap food and drinks for airtime during your radio remote.
With your staff and salon in place, prepare for a great turnout. When guests arrive, have your staff give a tour of each of your rooms and a description of the different services available. Your employees need to explain the different types of beds and the reasons why different rooms tan for different amounts of time.
After bringing visitors back to the front, staff members should discuss the importance of tanning with a tanning accelerator. This is where your earlier training time pays off, as staff must know enough to recommend the proper product for each skin type, as well as knowing which products contain tingle (for the customers who prefer it). There are so many products on the market today that it can be very confusing to a consumer. If your staff is unsure, it always will affect your bottom line.
Physically hand the product to the customer, look them in the eye with confidence, and say, “This is the product that I recommend. It’s the absolute best for your skin.”
Employees need to remind new customers that dry skin actually reflects tanning rays away from the body—and that the healthier and more hydrated the skin, the better the tan.
Don’t discount your lotions. Instead, try to give one free session with a lotion purchase. And if possible, make the free session an upgrade to their existing package. If they enjoy the session in the upgrade bed, chances are they will make it their choice for the next package.
Lastly, help them with finalizers such as moisturizers and shower gels. They are buying these goods somewhere, and it should be from you. Wrap up their visit with a swimsuit or goggle purchase and explain methods of payment for tanning services, especially if your salon offers EFTs.
Close the deal by setting up their first appointment before they leave the salon. Then, walk them to the door, give one last handshake and thank them for giving you a shot at their business.
Promoting your salon is a full-time job. It’s a waste of time to spend hundreds of thousands of dollars on beds, lotions and accessories if nobody knows who you are or what you offer. Once you understand how vital advertising is to your profit margin, you need to decide how to do it. It’s easy to play it safe with a coupon or two—or maybe even a flier—but if you choose to do it with a little more pizzazz and flare by running a live radio broadcast, your customer volume could change in an instant.
Radio can reach enormous audiences that most print mediums can’t even approach. The key is to take full advantage of this medium and create more than just a few 30-second spots here and there. Salon operators who have had success with live radio broadcasts— or remotes, as they are often called—say a big, fun event can help you sign up new customers faster than fliers and coupon books combined.
Radio used to be the top of the-line when it came to creative advertising. In 1937, an estimated 24 million families owned a radio, adding up to about 80 million individual listeners. At that time, radio provided the largest audience in history to advertisers; and the potential to increase sales via broadcast was incredible when compared to local newspapers and a few popular mail-order catalogs.
Psychologists of the day emphasized that the spoken word was a far more persuasive mean of argument than a printed one because the mental picture a listener gets from listening to a football game, for example, is certainly more vivid than an account of the same game in the papers the following day.
Radio may not be the dominant force it once was, but its advertising benefits still ring true, especially at the local level. For those unfamiliar with radio promotion, a live remote is when local radio station runs a live broadcast with its most popular disc jockeys (DJs) at a salon or from a chosen spot like a bar or a nightclub. During the program, the DJs talk about your salon and its monthly specials, offer discounts on lotions and other products, and give away free tanning packages to listeners who call in—maybe the fifth caller after a certain song in played.
The main idea is to entice people to come down and check out your salon during the broadcast. One Texas-based salon owner says one of the most important things to remember about live radio broadcasts is to be specific.
“What are you trying to accomplish?” he asks. “You have to know. You have to set goals and be patient. Don’t expect your first one to bring in a thousand new customers in one hour. It’s just like any form of advertising. You have to do it again and get some familiarity built up.”
Rates for live radio broadcasts are different in every town, but you are more likely to get a reasonable quote in smaller markets. Your best bet is to decide what demographic you are aiming to reach and contact the appropriate station with a few clever ideas. The best part about promoting your salon with a radio broadcast is that you can do it your way.
When a Naples, Fla. salon opened a few years ago, the owner did 20 remotes during the first five months alone.
“We recently ran a bikini-night promo that helped me sign up 20 new customers,” he says. “We threw a big party at a local nightclub. Anyone who came in wearing a bikini received a free tan.”
He loves radio because of the results it generates. At least 15 new tanners become members each time he promotes with a live broadcast. The point is to get the word out about the promotion, so he buys 50 or 60 radio spots a week before the live broadcast.
“You have to know who your potential tanners are—you have make it a big event,” he says. “I describe my salon and tell the listeners my beds are air-conditioned, we have AM/FM stereos with CD players built into the beds and our rooms are 10 feet by 10 feet—so I say it’s like tanning in your own living room. You have to have with it. I’ve had spots where the DJ promoted the salon while she was laying in my one of my tanning beds.”
Another salon in Georgia has done five remotes so far. She says the latest was the best yet.
“It was for the grand opening of my sixth location,” she says. “We wanted to be bold, so we actually did two in one day. We used two different radio stations because each reached a different demographic. The best advice I would give is to communicate with your neighbors. The other stores in our complex donated a lot of items that we gave away. We mentioned them on the air so it worked out perfect.”
Radio turned out to be a good for her salon because she lives in a small town that has only four radio stations.
“It’s almost a guarantee that everyone driving or listening to his or her radio at home will hear us,” she adds. “That’s probably not true in larger towns.”
In larger cities, there could be triple the amount of radio stations and at least double the amount of salons. Salon owners in big cities just can’t do radio, says one salon veteran. It’s not feasible financially or geographically. His salons are in a city of under 250,000 people and it’s a very central area.
“People come from two to three hours away to shop where we are located, so it’s a unique area for radio,” he says. “Another plus is that the stations in Lubbock reach outside the city. He is fortunate to be in a market that it isn’t saturated. “We don’t have five rock stations and five pop stations; there’s basically one station for each format so we are able to get that entire rock market and entire pop market,” he adds.
His remotes usually center on some kind of giveaway or membership signup. He says radio remotes are very expensive so salon operators better have fun and make it look like a big event.
“Make sure you have a promotional vehicle set up in front of your salon,” he says. “Decorate the outside with balloons, banners or something to make it look like an event. The customers get excited when they see a popular radio DJ in front of your salon because they see you actively seeking exposure. And that’s another byproduct from doing the remotes—the excitement it generates from existing customers.”
Two years ago, a salon in Aberdeen, Wash., ran a live radio broadcast for its grand opening. “We had refreshments, lotion testing, face painting and balloon animals for the kids,” she says. “We talked on the air about our high-pressure bed, which is new to our marketplace. We also offered half-price tans for anyone who came down and we gave away prizes to people if they came in wearing a swimsuit. At least 300 people came through our doors. That’s an incredible number for a three-hour promotion.”
The best part about promoting your salon with a live radio broadcast is that the excitement can convince people to buy membership packages.
“I gear it up for a whole month,” says another salon veteran. “I bring in more inventory, lower my prices for that one day.”
For example, visitors who stopped by during the remote could buy a week of unlimited tanning for $19.99, he says. “During he first remote, I signed up 23 new members in three hours,” he says.
Salon Location
The location of your salon is a critical decision. According to industry experts, location is probably the single most important factor in the success or failure of a tanning salon.
For years we’ve all heard about the importance of location. When choosing a location, companies like McDonald’s and Burger King spend enormous amounts of money on studies that provide them with the information they need before a final decision is reached.
In the tanning business, most of us do not have the luxury and cannot spend the money on a study that will help us make a location decision. So how can you actually decide where to open your salon? Would it be more advantageous on a bustling commercial avenue? Nobody but you can answer these questions, and the answer always depends upon your own situation, goals and objectives.
However, there are guidelines that will help you in making this most important decision. The immediate goals of this section will be to provide you with the necessary guidelines that will help ensure the success of your new salon.
Keep in mind that your services are appealing to people who want to look better or enhance their image in the eyes of others as well as themselves. For these people, looking good is their top priority.
Remember, the better the salon looks, the more comfortable people feel and the more your clients will feel that they are getting the most for their money.
There are five basic location factors that should be considered when selecting a business site:
(1) Population Density—This refers to how many people in the general population there are and, of that total, how many are actually potential customers.
(2) Population Income—Obviously, a high disposable income among your customer base is very desirable. The more disposable income a person has, the more free money, and probably time, they have for enhancing their looks.
(3) Competition—It is highly unlikely you will choose a location next to another tanning salon, but there’s nothing to prevent you or a competitor from opening a few blocks away from each other. As indoor tanning becomes more and more popular, increased competition is inevitable. Your best protection is a well-respected, ongoing business based on exceptional service and outstanding equipment performance.
(4) Targeting Your Audience—If you want to target an upscale audience, the location should then be in an upscale neighborhood. If you want to set your sights on students, it would be wise to select an area near a local university or several high schools. Make sure you have defined your audience. When you know who your potential clients are, it will be easier to select a site where there is an abundance of these people. This is a key factor in the success of your salon.
(5) Selecting and Leasing/Buying a Building—In determining the size building you are going to need, consider the amount of money you have to invest and the amount of equipment that it will take to operate profitably. Also, before building or leasing, always check with the proper local offices to verify all zoning ordinances, building codes, etc. Prior to signing a lease, it is wise to seek legal help.
In the retail world, a great deal of attention is given to the packaging and presentation of products. Snack companies spend millions of dollars determining the exact amount of air that should be used to “puff” up a potato chip bag so it looks fuller to the customer. Clothing manufacturers produce tons of display aids annually to make their individual brands sell better. In the indoor tanning industry, lotion and skincare companies work carefully to label their products attractively and, in many cases, make coordinated display devices available to the salon. Lotions are but one example; the same can be said of almost every accessory item sold in the salon.
But what about the atmosphere of the tanning salon? The design and decor of the salon itself, inside and out, do as much to influence the buying decisions of the customer as does the packaging of a consumer item for its particular audience. When a customer walks into your salon for the first time, several things are going to contribute to his first impression. One of the first things is the reception he receives from the salon attendant. It bodes well if the attendant is courteous and gives the impression of being knowledgeable about tanning. However, no amount of nicety and proficiency on the tanning process will induce that customer to return if the salon itself seems dingy, gloomy, claustrophobic or otherwise makes the client feel uncomfortable.
Almost every aspect of the salon can play a role in encouraging or discouraging initial or repeat business from potential customers. When deciding on the features of the facility, then, do things with a sense of purpose. Whether examining the idea of remodeling or planning a salon from scratch, choose your materials for specific reasons. Some of the most important considerations in the design of the salon are space utilization and layout, decor and furnishings, lighting, use of color and environmental control. The successful synthesis of these elements will result in a salon that presents a quality image of tanning as a great way to look and feel better.
Space should be the first and best used feature of the salon. Its use and misuse can help or hinder the customer’s passage through the salon, better or worsen his mood, increase or decrease his level of comfort and affect his overall perception of the business in a variety of other ways, probably all without his even being aware of it.
One of the most widespread complaints in regard to tanning salons is the claustrophobic feel people experience in the tanning rooms and even tanning units. Even though extreme claustrophobics are rare in society, few of us truly can relax in confined spaces. When most of the space in a small room is taken up by the tanning unit, the odds of a relaxing tanning session are greatly reduced.
If, for some reason, you can’t avoid placing a unit in a room that is too small, whether it be for tanning, a wall-sized panoramic print on one wall can lend a feeling of space. The effect of the same technique in a somewhat larger room is better still.
The layout of the entire salon should be designed to facilitate the flow of traffic. Tanning rooms should be clearly marked and easily accessible. An island arrangement is an interesting layout option. In such a setup, the reception area is located directly in the middle of the salon, allowing the clients quick and easy access back to the desk. It also makes it easier for you to observe and monitor operations.
The reception area should be planned with the display of accessories in mind. Waiting areas should be comfortable and should be supplied with some sort of diversion, be it television, current copies of popular magazines or newspapers.
The Advantages Of Hiring A Designer
Many of you already have a successful salon which you either designed yourself or did with the help of an architect. If your customers and salespeople aren’t complaining, and sales seem to be adequate, you may not need any help. On the other hand, if new packages aren’t selling and sales are down or have reached a plateau, and your neighboring salons are bragging about their new sales peaks, it would be wise to look at your salespeople, your advertising, your pricing, and, of course, your salon. Is your salon too dark? Are all the lights glaring florescence? Is the carpet worn and stained? Do you use showcases to feature your retail products?
If you are planning a new look or are opening a salon, don’t hesitate to consult a store designer. Look for a designer that specializes in retail operations, rather than office or home designs. The cost will be offset rapidly by the increase in sales that a new look will bring. A salon designer has a multitude of functions. First, this designer must work with you to understand your product, customer and your competition. Then, he or she must ascertain just what it is that you want; a new salon, a revamped salon with a hi-tech, contemporary or all natural look. Do you want a discount operation, or are you selling quality, performance and service with less of an emphasis on price?
All of these are factors that the designers must consider when laying out the salon. Most important, however, is determining your budget. If you do not supply accurate estimates of available dollars, both you and your designer will spin wheels in working out a design that may not be buildable due to lack of funds. Conversely, if you indicate a smaller budget than you actually have, you may not get the desired look.
Calculate a realistic budget, give it to your designer and then try to stick with it. In order to get the most from your designing dollars, it works best if you do some research yourself ahead of time. Select two or three color schemes that you like so the designer has a starting point.
Investigate different carpet qualities—you want something low-maintenance and wear-resistant, but still attractive. Also check out a variety of wall treatments, both for appearance and maintenance requirements. This way you’ll be able speak the designer’s language a bit better, which results in a design you’ll really be comfortable with, less time to get the design done and less cost to you in both the near and long term.
Once your needs, wishes and budget are determined, the designer will begin drafting the store plan. This plan usually will include a space layout including a reception area, a waiting room, tanning equipment, washrooms, a utility room and product showcases. Floor and ceiling treatments will be selected, as well as lighting requirements for display.
In addition, the storefront will be planned including signage and if required, mechanical drawings for heating, air conditioners, electric, plumbing, etc. The plans must be detailed sufficiently to allow both a contractor to bid the work, and for you to understand what it is that you’re getting. Blueprints are not enough, make sure that you get renderings.
Experienced designers can demand a high hourly fee, and some experts suggest that a flat-fee basis is the best way to go. A complete salon plan, excluding mechanical drawings, is based on the square footage, the type of salon, its size, etc. Ballpark figures are rough in this business, and we would urge that you get a firm bid prior to contracting the job.
You might ask yourself the question, is a professional designer worth the investment? The answer is yes. A well-planned and thorough salon always will do better than a poorly designed operation if all other factors are equal (location, price, etc).
For those owners who don’t feel they require a designer, we would advise that you work with competent tanning unit manufacturers. These people usually have been involved in the design and supply of hundreds of salons and are a fount of knowledge when it comes to available equipment. Many manufacturers don’t charge for their time. Instead, they hope you will buy your equipment from them. They will work with you on laying out your salon in much the same manner.
Planning your own salon requires an initial layout of the floor area and all wall elevations. Use grid paper and a 1/8-inch or 1/4-inch = 1-foot scale. Draw a very accurate plan of the floor indicating architectural elements. Then do the same for the walls in an elevation drawing.
Now draw in the washrooms, tanning rooms, reception area, waiting area, product display area and utility room. ake sure that the washrooms and utility room are somewhere to the rear of your facility so the front is left for sales and display. At this point, we can start to detail the salon.
Floor Coverings. Floor coverings are one of the first things your customer will see when he/she walks in the front door. A few suggestions: Use a dark, neutral, subtly patterned, commercial carpet for the bulk of your salon. It looks good, is easy to work on and won’t show the dirt. Don’t skimp on price. If you buy a cheap carpet, it will not last and will look miserable soon after you install it, and will have to be replaced shortly.
Ceilings. Most salons are not in the business of selling ceilings, so unless the ceiling is quite low, paint it a darker color than the walls. This tends to make it disappear. If your ceiling is quite high, we would suggest spaceframes or banners to bring it down. In addition, get rid of all glaring fluorescent lights. Either replace them with standard or low-voltage track lighting or cover them with diffusers to direct light down to the floor where it should be.
Windows. Windows also are important because they pull customers in. If possible, use a professional window trimmer monthly or set up an exciting display yourself. Many successful salons have been built around creative windows. A good window trimmer can be expensive, but is well worth it.
Showcases. Showcases also can be very attractive because they not only display product, but they identify merchandise as having enough value to be put behind locked doors. Make sure your cases imply value; in other words, buy quality showcases. Light them using mirror doors and color coordinate the bases with the rest of your salon. Showcases come in virtually any size or finish and can be used on the salon floor or up against the walls of the store. Showcases sell lotions, jewelry, sunglasses and other small impulse items.
Washrooms. Since you cater to male and female customers, it is advisable to have two washrooms that your customers can use either before or after tanning. Always keep them clean. Your customers will appreciate it.
Utility Room. Because you do provide each tanning customer with several towels, it is a good idea to have a washer and dryer. These are optional items, however, it will make it much easier for you to provide your customers with fresh, clean towels.
With the concern for higher profits and increased revenue per venture, the modern-day entrepreneur constantly is seeking avenues for increased income. One of the most successful ways that tanning salon owners have conquered the dreaded spector of seasonality and tamed the rising and falling tides of business flow is through diversification.
Reorganizing a business that has been solely focused on one service can be tough. A lot of thinking has gone into creating profitable addenda to tanning that increase profits, provide stability, smooth the peaks and valleys of the tanning cycle, provide a long-term potential for continuing business and generate opportunities for businesses that can branch off from the main salon operation.
The point is that accessory enterprises do not detract from the owner’s commitment to tanning, they increase the sales power of the tanning environment and broaden the base of the entire industry.
This section should not be misconstrued as an inclusive assessment of all the options open to the tanning salon owner. It is hardly that. Instead, the editors of LOOKING FIT® have looked at some of the most popular and profitable sidelines and the ways to market them in order to provide the owner with some options that can work for a variety of salons. Most notably, this list tries to encompass some diversity, but be forewarned, that the type, style and amount of accessory products are limited by only one factor-the imagination of the owner.
Regional geographical and cultural approaches are diverse and abundant. What success a Northeastern tanning salon might have with T-shirt accessories in a summertime promotion, might not be repeated by a Florida salon with abundant suppliers of T-shirt lines all over. The designation of consumer goods is broad. What could be a convenience purchase or a shopping item in one shop would be a specialty item in another locale. For example, T-shirts might be a convenience item in the South, but in the colder Northeast, during some months of the year, they could be a specialty item.
Just as important as the idea of what to market is the responsibility for how to market accessories. We consider the marketing of retail items to be a business quite different and in many ways more complicated than tanning. Marketing knowledge is crucial. Although accessories and auxiliary businesses aren’t the answer for everyone, for the non-purist, the accessories game makes good sense for bringing in solid sales and repeat business.
Considerations
The move to retail selling is not for everyone; however, the versatility and flexibility that sales can add to the servicebased salon operation can be an invaluable source of capital during lean times. The promise that retailing holds is not realized in every instance, but if the salon owner has practiced good selling techniques in marketing the salon operation itself, retailing is not that great a leap.
More often than not, salon owners talk themselves out of retailing for fear of taking on an entire new industry. Selling is selling, and in each case, the salon operator has a product. It is either an intangible product like a tan or a tangible one like a garment. Obviously, some of the most successful salon operations are ones where the barriers between retailing and servicing are broken down and melded into one seamless enterprise.
This is not an impossibility, but it takes a firm commitment to both aspects of the operation and an awareness of the similarities and differences between the various operations.
Retailing vs. Service
The perception is that retailing is a vastly different business than a service business. In truth, the two are very much the same. The retailer and the service company both offer a product.
The retailer offers a tangible one, some form of goods, the service business offers a service which affects the consumer. Both involve some facility, a marketing plan and a price structure. Most importantly, both involve selling. The salon operator who is not able to sell the salon’s service will likely have little better luck at selling a product.
To be more analytical about it, the retailing business takes some form of product, manufactures it and sells it. The service business utilizes processes that do not change the physical form of materials, but merely manipulates them.
At the consumer level, the retailer buys a product (usually from a wholesaler) at one price and moves the product along to the consumer at another price. The service industry (tanning) performs a professional, personal or financial function (in the case of tanning: personal) that does not normally create a new end product.
Though the retail and service industries share much in common there are some important differences that the salon owner must understand before entering the retail operation.
Labor
While the salon needs trained personnel, the actual operation of a tanning salon need not be labor intensive. That is, few people really are needed to keep the salon going on an hourly basis. This is not true of retailing. The labor demands are much more intensive and often involve a lot of leg work. In the salon process, the salon attendant need only check in customers, accept payment, show the facilities and turn on and clean the machine, but the requirements for the retail worker are much more substantial.
First, the retailer must man the shop area. The sales floor need not be a large area, but it should invite the customer in and make that customer comfortable. In this environment, the retail worker must stock, sell, take inventory, re-stock, work the floor and register sales. The salon owner carefully should weigh the various responsibilities that a service and retail worker have and decide what the appropriate labor force would be for these two separate enterprises.
Space
Although the salon environment can exist in a relatively small area with tanning booths or beds tightly bunched for maximum space utilization, the retail environment needs an aesthetically pleasant space. This needn’t be an opulent setting with a luxury decor, but it must be an environment that lets the consumer know this is a store. You shop here. Too often, the salon operator treats retail sales as an inferior partner. There is no window display, no interior display area and no aesthetic arrangement of sale items. Space must be provided to give the impression that retailing is a primary function, not a secondary bail-out to a floundering tanning business.
Promotion
If the addition of a retail division is a new item in the salon, it is mandatory to announce it. Promotion by way of instore flier, direct mail, radio, television, magazine and newspaper ads will let the community at large and the clientele know of your existence. Opening a retail division without adequate promotion can seem like not opening at all. Remember that the results of advertising are often invisible except when one looks at the year end receipts.
Constantly look at the big picture and remember that promoting the tanning operation will draw customers to the retail establishment and vice versa. Promotions should take advantage of the tanning salon’s name, character and industry. Cross promotions that link tanning products to the tanning act are especially successful. Promotions should play upon the lifestyle sales technique. Blend all promotions under the banner of “looking good” and consumers will see each purchase as an aspect of personal “image enhancement.” Remember that promotion can be synonymous with perception sometimes and that a salon identified with healthful products can build an entire cottage industry under that banner.
Product Lines
What to sell? There are as many tanning and tanning related products as the smart retailer can imagine. What is an off limits item? Virtually nothing so long as it promotes an image consistent with the salon’s identity and the tanning customer’s mental image of himself/herself. These are a few products that have been tried:
- tanning products (lotions and skincare)
- clothing for tanning
- activewear
- juices, health foods
- frozen yogurt
- coffee bars
- goggles/sunglasses
- swimwear
- home tanning equipment
- fitness equipment (home)
- cosmetics and nail products
- perfume
- jewelry
While these are some of the typical offerings, other lifestyle add-ons also could be beneficial. Consider these additional options:
- promotional posters
- new age music
- crafts
- cards
- books on fitness and health
- video tape/DVD rentals
Again, the list of possible products is bounded only by the imagination of the salon owner. Sometimes customers will request products if a suggestion box or other means presents itself. By catering to a customer’s needs you are keeping a potential profit maker in the store longer.
Commitment
Unfortunately, the most fantastic product available will not help the salon owner without the necessary commitment. The new retail operation will require as much, if not more work than the salon operation. Retailing is not a panacea and thinking that a retail concern will bolster a salon simply by wishing it, will not work.
The commitment must be exhibited at all three levels. First, the level of buying and displaying adequately. Then in terms of superb promotion. And finally, in terms of day-to-day selling. The retail shop must receive the same attention that the salon operation receives.
Costs
As often as not, the salon owner doesn’t consider that a retail operation will have its own costs. It is presumed that the costs of retailing will just be a part of the total salon operation. It is important for the business to set a budget for each aspect of the business and account for each separately. This will check the relative profits of both companies and illustrate where improvements and adjustments must be made in the merchandising plan. Here are some sample analyses of basic costs for both a salon operation and a retail business.
At a glance, one can see that a number of the expenses are the same. Rent is a constant, although the retail addition to a salon could necessitate gaining a larger environment so the retail operation can grow and achieve full partnership status with the root business. Utilities must be paid for both operations. For the salon, the utility bill is increased because of the power used by the tanning machines. In the retail environment, power will be consumed by display lighting. Just as a fully functional tanning unit is necessary to the complete function of a salon, so excellent lighting produces the right atmosphere to feature merchandise. Lighting can almost make a sale.
Professional services will differ. For the salon, professional services may include the advice of a lawyer, realtor and several tanning professionals in your local association. With the retail aspect, professional advice may include a designer to create the store section and consultation with local retailers or consultants in retailing who know the regional market. Professional advice puts the business on a solid footing and hopefully starts it in the right direction.
The salon probably will be more dependent on telephone service in order to schedule and cancel appointments, answer inquiry calls and order equipment and supplies. For the retail business, a telephone also is essential for inquiries and ordering stock. Phone use for the salon business is usually customer to business while telephone tasks in retailing are usually business to business.
Insurance in the tanning field is a must. This protects the salon owner from claims and loss. There is less of a need for insurance in a retail operation, but a good insurance program can protect the retail business from loss through inventory destruction, fire damage, theft, etc.
Advertising can be the lifeblood of a tanning operation. A salon that no one knows exists will have difficulty getting and keeping business. The retail operation also is bound to good advertising. With a variety of stores to choose from, advertising keeps the salon/retailer before the public eye. Particularly if the retail shop is a new venture, advertising must announce the arrival of this aspect of the business.
Possibly, combination ads targeting the salon client and that client’s consumer needs would work best. Some salon owners may want to bill the two businesses as independent of each other and draw in an entirely new set of customers. This could be a part of a coordinated marketing program to find new audiences for tanning. The retail store could be a lead-in to new tanning customers, making the store and salon a one-stop shopping/recreational visit. The possibilities for advertising and promotion are unlimited, but both ventures need sufficient advertising to keep a high profile.
Labor is necessary for the tanning salon, but many people have been drawn to the salon business because they believe the salon offers a service industry with less labor costs. Many owners staff a salon with only one attendant. Here is a big difference with the retail organization. In retailing, the salesperson is the personal representation of the retail store, just as in tanning.
The retail operation requires employees that can sell and sell aggressively. This can mean that more than one operator (depending on the size of the store) may be needed at one time. Though this cost greatly increases the operating expense of the retail store, it does provide several public relations advantages. For one thing, the increased traffic in the salon/retail environment promotes more business in general. Also, the employees that come in constant contact with customers in the retail environment help to sell your salon as well. So, though more money is spent, more can potentially be made.
The big cost for many tanning salons is the tanning equipment. Many salons prefer to lease equipment because of service contracts, and convenient terms and rapid technological advances that tend to date equipment quickly. This is a major cost to many salons and a major drawback to entering the business.
The retailer obtains stock through a wholesaler. Usually once the transaction is made, the retailer has possession and ownership of the stock. Depending on the size of the store, the retail stock can cost as much or more than the tanning equipment. This expense is not leasable. The retailer buys from a distributor or wholesaler and then must sell or liquidate the stock, ideally at a profit. Naturally, this requires smart and efficient buying for success.
An unspoken cost for a retail operation is location. With the number of shops located in malls and other shopping square/village environments, it is difficult to drag the public into an isolated specialty shop. If the salon wants to compete at that level and seek a more generalized business environment it might be wise to move from an off-center location to one directly in the thick of the retail climate. The thinking in this approach is that to sell you need to be where the buyers are. This is much easier than trying to drag the buyers to you. In any event, having to relocate the entire salon operation for the sake of creating a retail entity might seem counter-productive, particularly if the salon has established a respectable clientele of regular followers.
Selling Strategy
When the salon owner attempts to sell tanning, the end result is a combination of the tanning technology and the client’s own natural tanning ability. When a salon owner goes into retailing, he must follow a different strategy to sell the product. By one means or another, he must inform the public of the product’s presence. People have to know it’s there to buy it. The retailer must strive to increase his market-share. The more he can sell, the more he can plan for the future and increase revenue.
One method of creating a market for a product is through the process of differentiating. That is, a retailer can market a product by positioning it as different to any other product like it in its class.
The Selling Step
This process is similar in tanning, but the objective here is to apply sales techniques to the retail operation. There are three steps in the process. First the seller must locate people interested. Then he must make a sales presentation. Finally, he must close the sale. A salesperson begins by finding prospects. A person may browse through a shop, but he may not be intending to buy, for one reason or another (no money, just a passing interest, etc.). This type of window shopper is not a serious prospect. A sales presentation to such a person is pointless. A good prospect is someone with cash or credit who is interested in buying at this time.
The sales presentation should involve getting the customer’s attention, then psyching the customer to buy and finally meeting any objections to the product. For example, a good sales presentation was made for a novelty tanning lotion with colorful sparkles built in. The product itself when applied to a model attracted a consumer’s attention. The salesperson pointed out that the product was inexpensive as well as novel (stimulating an interest to buy), and when the customer asked if the sparkles detracted from the cream’s usefulness, she (the salesperson) answered the objection with cheerful “no.” The consumer was sold and so was the tanning cream.
The final process in selling was the closing. This is where the salesperson asks if the consumer would like to purchase some of the product. The closing can be the hardest part of the sale. It shouldn’t come as a forced “push the customer” approach, but should seem to be a natural outgrowth of the proceeding conversation.
Auxiliary Functions
The salesperson also performs other functions. One is to cross-promote the salon operation. Other functions may include some recordkeeping, stocking and collecting credit information.
Advertising
When the retail operation can’t sell directly, it is time to consider advertising to locate potential consumers for the product line. Advertising has a number of functions and each is important for the sales process. Advertising can be done at the retail level or at the manufacturer’s level. Some of its functions are to:
- help personal selling by getting the product name out
- reach beyond the sales floor to approach customers
- improve ties with manufacturers
- open new markets
- promote goodwill
- create a beginning demand for an unproven product
- make sales volume higher.
Promotion
Now that the salon owner has decided to venture into the accessories or retail business, he needs every tool available to him to make his product line shine. Promotions are usually a low-cost way to do just that. When a retailer is not selling or advertising, he is undoubtedly promoting. There are a variety of sales techniques that make promotion successful.
In-house promotion is simply talking up the product while a customer is there to tan or buy another product. Point-of-purchase (POP) advertising displays and posters offered directly at the retail area to encourage more sales.
Specialty advertising is done by various logo items such as matchbooks, pens or calendars. These items keep the store’s name in the consumer’s mind and might jog a return visit.
Coupons give the buyer a discount on selected items from your store and promote repeated visits.
Trade shows provide the retailer with an insight into the newest and most marketable products. The idea is to approach the trade show with a consumer mentality. What do you see there that could work in your salon?
Samples are a particularly effective way to get people to try tanning creams while in your salon. Offer the customer a free sample and if he or she likes it, the customer may decide to buy more.
Contests actually involve the consumer. They keep people thinking about the product and invite repeat business so people can see who won.
Product
It is interesting and important to know about the process of retail selling, but a strong product does a lot of the selling for the salon owner. Consider some of these items as potential money makers for your salon. Each has a definite appeal and can broaden the salon’s natural customer base easily. Each builds on the tanning lifestyle and encourages future sales and other retail ventures. Each of the products mentioned in this section have actually been tried in salons. Which is the appropriate product for your area? That is difficult to say. The salon owner must have a clear idea of how to pick the right product for his geographic area, consumer group, salon ambiance, marketing program and price point.
All these factors and more make the selection of a proper product a crucial matter. These brief descriptions are not intended as endorsements of any specific product, but rather as a service to salon owners that have an interest in expanding into retail sales.
Product Selection
The right product can be picked keeping three important points in mind. First, the consumer that is willing to spend for a tan will doubtless spend on other products that can beautify him or her. Also, a good product line can keep the tanning consumer frequenting a salon throughout the year, something that most salons currently don’t have. Finally, a distinct and unusual specialty item will keep a customer coming to find what that person can’t find elsewhere.
Final Thoughts
Still interested in dabbling in retailing? Although the effort to start a retailing arm of your tanning business may seem daunting, the revenue to be found in retail products cannot be denied. Look around the next time you are in a specialty shop. You might find a product just right for your tanning business. Remember, profit is the name of the game, and merchandising new products is part of the way to make it.
Yellow Pages Advertising
Since the 1984 breakup of AT&T, Yellow Pages competition has boomed. The federal ruling freed AT&T’s regional phone operating divisions and those former siblings have started competing with old AT&T rivals like GTE, and each other. The open market and low paper and printing costs also have attracted many new companies to Yellow Pages Publishing.
The Yellow Pages Publishers Association (YPPA), the industry’s national trade association, says that more than 7,000 directories are now published in the United States. Adding to the confusion, any publisher can use the walking-fingers logo and name Yellow Pages since they were not trademarked in the United States by AT&T.
What does all this competition mean to you, the tanning salon operator? It means lower advertising prices, flexible terms, new ad options and a confusing array of choices. Let your fingers do the walking through this article, and you’ll learn how to get the most for your Yellow Pages dollar.
Choose A Directory
A study commissioned by the YPPA found that 73 percent of adults use the Yellow Pages weekly. Another advantage for you as an advertiser is that your message is available to consumers 24 hours a day, 365 days a year, at home and in the office.
The first step in tapping this source of customers is to find out what’s available in your area. Your city may have only one Yellow Pages directory, or 10 or more produced by a variety of publishers. You also may want to consider the specialty directories that have appeared recently; Yellow Pages targeted to women, senior citizens, Spanish-speaking consumers and college students. To find out what directories are available in your area, check (you guessed it) your Yellow Pages under Advertising-Directory and Guide.
Next, look at the listings and think about your products and customers. Do you mainly provide tanning services to local customers? Or do you want to promote your ancillary services such as hair and nail to women throughout the city? Would flexible, walk-in hours appeal to readers of a college students’ directory?
Decide where your customers come from, where new customers might come from, and look for directories that fit those needs. You can advertise in one or several, depending on your budget.
Now you’re ready to make some phone calls. You should ask how long the company has been publishing its directory, the total number of copies delivered, the geographic coverage area, and any special features the company offers.
How much do the ads cost? Do businesses receive copies for each telephone in the office? Are you interested in special features like four-color ads or clip-out coupons? Comparison shop and look for an established company that delivers the largest number of directories in your geographic area at the lowest cost.
Look at what your competition is doing, and ask about the distribution method. Most large directories are distributed by hand because mailing would be expensive. A directory distributed by mail might be a small one. Ask to see a copy before placing any ad.
Take the time to choose your directory carefully. Remember, you’ll have to live with your decision for at least one year.
Get More Bang For Your Buck
Now that you’ve picked your directory—or directories—you need to decide which heading to list under. There are a number of possible subheadings for the tanning industry, ranging from “Physical Fitness” and “Reducing and Weight Control Services” to “Massage” and “Health Clubs.” But unless your business offers a wide array of services, you’ll probably want to choose the main heading: “Tanning Salons.”
For a small business, one heading is probably sufficient. Again, ask yourself, “Where would my customers look for me?” And if you’re introducing a new service, such as weight control, or if one area of your business has been slow, you might consider additional listings under those headings.
Next, select which type of ad to buy. Three basic classifications are available. A listing is just that, your business name and address with a phone number. A space listing, measured in inches, includes additional information about your business and will be boxed. A display ad is measured in vertical rows called “columns” and might include eye-catching typefaces, art, logos and other elements.
Usage studies indicate that the eye goes right to the bigger ads. Costs for Yellow Pages advertising vary widely, depending on the city, the directory’s distribution, ad size and current market conditions. A Yellow Pages representative can provide specific costs for your area.
One possible way to stretch your advertising dollars is cooperative advertising. Under this program, a business owner and manufacturer jointly fund an ad, promoting the business while highlighting the manufacturer’s product or logo.
Ask your suppliers if they participate in co-op advertising. You’ll usually have to meet certain minimum purchase requirements, and buy these products from the manufacturer within a specific time period. You’ll also have to follow guidelines for the ad itself, but the manufacturer may reimburse you for up to 100 percent of your space costs.
Create A Unique Ad
There are two kinds of people who use the Yellow Pages— those who already know who they’re looking for, and those who know what they’re looking for and are trying to find a place to buy it.
Your job is to grab that second group of readers. The YPPA offers these tips to help you create an ad that will make customers dial your number. Your headline, the ad’s descriptive “title,” should not restate the heading: if you’re listing under “Tanning,” don’t put your business name, unless it’s descriptive. “Tom’s Tanning” won’t grab readers, but “European Tanning & Spa” might.
Ad copy the words used to describe your business, should set you apart from the competition. Use phrases like “Walk-Ins Welcome,” “Complete Massage and Manicure Services Available,” “One of the Largest Salons in the Area” or “Serving Greater St. Louis for 15 Years.” Be specific and concise.
Your company name should appear in the ad, and you might want to add any logo or slogan you use. Your address and phone number are certainly important. And if your salon is difficult to find, consider adding a map, directions, or a phrase like “Located 2 Blocks East of Northland Mall.”
Listing your hours or that credit cards are accepted also might entice customers to call you first. Remember, think from your reader’s point of view.
As far as art and layout, don’t worry, you don’t have to be a Picasso. Advertisers are not responsible for providing finished, “camera-ready” ads to the publishing company. If there’s room in the budget, you can hire a graphic artist if you wish.
Otherwise, a rough sketch will do. Your Yellow Pages representative will take it from there.
If you want to add illustrations, keep them simple.
Complicated drawings or fuzzy photographs will not reproduce well. The same goes for typefaces, the lettering styles used in printing. Try to choose only two for your ad. To set off a word or phrase, use boldface or larger type, not a different type style. A clean, balanced ad with lots of white space is best.
Track Results
Once your ad has been published, you’ll want to follow up to find out just how much business the Yellow Pages is sending your way. You can do this in three ways.
First, you can use a special telephone number that appears only in your Yellow Pages ad. This can be expensive, but when that line rings, you’ll know the Yellow Pages generated the call.
A second, less-expensive method is to add a line of copy such as “Mention this ad and receive a 10-percent discount.” However, some directories have restrictions on this type of offer. Check with your ad representative.
The simplest and least expensive way to track your advertising is to use a tracking form. This is simply a form that employees use each time they make contact with a new customer or potential customer, checking off whether the contact was a phone call or walk-in, and where the customer heard of the salon. At the least, spaces should be provided for the Yellow Pages, verbal referrals and walkbys, in addition to spaces for any other forms of advertising you do.
The information may surprise you and will help your plan later advertising. Train your employees to use it for every customer and you’ll have an exact record of how your ad dollars work. You might want to design your own form including questions on whether customers had trouble finding the store, or under what headings they found you.
Today’s Yellow Pages have many advantages for the tanning salon operator. With more directories and ad options available, you can target your audience, create an ad to grab those customers, and make an impact without breaking your budget.
Ultimately, the success of any Yellow Pages program depends on you, the advertiser. By following the guidelines outlined in this section, you can make the Yellow Pages an effective part of your marketing strategy. Careful planning and follow-up will make more of those walking fingers guide their owners to your door.
10 Steps To Profitable Print Advertising
What’s black and white and read all over? According to the Newspaper Advertising Bureau, retailers hope the answer is “my newspaper ad.”
If you’re like most small business owners, each year you spend the largest chunk of your advertising budget on newspapers. With that kind of investment, every ad you create should do double duty: sell tanning services and build your salon’s positive image.
You won’t win customers by boring them into buying. You’ve got to create a desire. A few simple pointers from experts will show you how to use newspapers to get those maximum results, without a Madison Avenue budget.
Step 1: Set A Budget
There are many tried-and-true techniques for deciding on an advertising budget. Yet many small businesses fall into the trap of spending “all we can afford” or “as much as our competition.”
This can get a salon in trouble, because its budget should be based on goals for the coming year and what the project sales will be. Experts say the fixed percentage of sales budget is most widely used. As a rule of thumb, experts recommend spending 10 percent of gross sales the first year in business, 7 percent the second year, and never less than 5 percent a year after that. Base the figure on predicted future sales, using your knowledge of your average annual sales.
Step 2: Plan Your Campaign
The most successful advertisers are not capricious ad-by-ad makers. They’re consistent ad campaigners. If you’re constantly changing direction, the audience won’t recognize you. Plan your ads six to 12 months in advance to deliver a central selling message and consistent look that build customer confidence.
Start by clipping a few ads run by other local salons. Studying your competitors will help you discover your shop’s “unique selling proposition.” As you look at the ads, ask yourself “What do I offer that the others don’t?” That aspect can become the focus of your campaign.
Next, define your store image. What kind of services do you provide? Do you specialize in tanning? Or do you offer a full range of beauty services? Remember, the image projected in your ads must match the reality customers see when they walk in the door.
Finally, think about your customers. What is their gender, age, education level and income? This will be your target audience. Write down these answers and keep them handy. You’ll use them in creating ads and in choosing newspapers.
Step 3: Find Inexpensive Help
Unless you spend more than $10,000 a year on advertising, the experts say, you probably don’t need an advertising agency. But professional help with writing and art can make your ad stand out from the “home-grown” variety often seen in local papers. What’s a budget-conscious salon owner to do?
Experts recommend staying away from newspaper advertising departments. Avoid them like the plague and your ad will look just like all the other ads in the paper. Freelance help is a better choice. Freelance writers and artists work on a per-project basis at a fraction of what you would pay for an agency. You can sometimes find these independents just by checking the Yellow Pages, but chances are you’ll have to look a little harder. A few sources to try:
- Local advertising clubs or trade associations
- Your Chamber of Commerce
- The advertising, journalism, or art department at a local college
- Local printers Adweek magazine, published nationally in regional editions, includes a weekly directory of freelancers.
Most freelancers will be happy to visit your office and provide a free portfolio showing. Find out their fee and look at work they’ve done for others. Do you like what you see? Have they worked for other tanning salons? Also ask what results the ads had for clients. And before any work begins, get a written agreement specifying what services the writer or artist will provide, delivery dates, and the fee you will pay.
Step 4: Write Customer-Oriented Copy
Even if you hire a freelancer, knowing what goes into good copy is an essential part of successful advertising.
Copy needs to emphasize benefits, not features. A feature is what the service is or what it does. A benefit tells customers what’s in it for them. State your offer in clear terms. Appeal to your target audience’s desire for style, status, popularity, savings and fun. Tell them how your services will make their lives better.
Spend at least as long working on the headline as you do on the body copy. The headline and illustration have to work together-combined they are about 60 percent to 75 percent of the ad’s effectiveness.
Your headline should not tease the reader. Don’t say, “Looking for the ultimate in tanning?” Say, “Enjoy a summer tan year-round. Open 7 days!” Remember, your purpose is to bring customers into your store, not to entertain.
Our panel of advertising experts also offered these points to remember in writing good copy:
Use your unique selling proposition. Throughout your campaign, emphasize the one thing you want customers to know about your shop-price, quality, selection or convenience: “Five locations to serve you,” “Your complete tanning headquarters.” Remember your target audience. Write your ad as if addressing one customer. Use the word “you.” Call your prospects by name: “College students ... Ask about our special discounts.”
Pick the right services to advertise. The Newspaper Advertising Bureau suggests these guidelines: your most profitable services, “hot” or trendy services, your best values, services with new value, and services typical of your salon.
Decide on one goal for each ad and make sure every word in the ad reinforces that goal. Use short paragraphs, sentences, words.
Be specific. Don’t say, “Low prices,” say “Tanning from $5 a session.” Use proven “magic” words and phrases as high-impact, reader-stoppers. Try to get them into the headline: Free, New, You, Love, Results, Announcing, Save, 50% Off, For a Limited Time Only.
Don’t forget the basics. Include your salon name, location, phone number, hours, credit cards accepted and dates of the sale.
Close the deal. Tell the reader to act now with a call to action: “Call today for your appointment,” or “Stop in this week and ask for your free gift.”
Step 5: Use Design To Reflect Your Image
You’ve decided on a central message and copy, now it’s time to design the selling package. All your ads should have a consistent “family” look-the same ad size, typeface, basic layout and illustration style.
Repetition is reputation and having a consistent tone of voice and graphic look will build audience recognition. It becomes your business’ signature.
For great looks on a budget, experts recommend hiring an artist to create one “shell” ad. Have the artist select a type style and border, and show where the headline, illustration, copy and logo will be. For future ads, you simply write your headline and copy, and drop in the appropriate illustration.
Experts offered these design tips to present your salon at its best. Select an unusual border and use it for every ad. Borders add impact even to tiny ads, and give your business instant recognition.
Save money on borders and other illustrations by using “clip art.” Available at local art supply or book stores, “clip art” books contain copyright- free designs that you cut out and drop into your layout.
Limit yourself to one typeface for the headline and one for body copy. Use boldface or larger type for emphasis, not another type style. Having too many typefaces is like mismatching clothes, plaid with stripes and dots. Is that the image you want to send out?
Make it readable. Don’t use type smaller than that used by the newspaper. Don’t put type over your illustration and avoid “reverse” type, white type on a dark background.
Because newspapers are printed on rough paper, photos generally don’t reproduce well. If you do use a photo, ask the newspaper’s photo department for tips on how to get the best reproduction in their paper. Leave enough white space so the ad looks clean and balanced.
Step 6: Choose A Newspaper
Most towns today have a flurry of newsprint vying for your advertising dollar-metropolitan newspapers, local papers, campus papers or weekly papers. What’s the best choice?
The first thing to consider is reach-the number of people in your target audience who read the paper. Your ad rep should be able to provide you with circulation statistics broken down by gender, age, income and other demographics. Look for papers that reach the largest number of people in your target audience.
The next point to consider is price. Newspaper space is measured in inches per column or lines per column. An inch equals 14 lines, so you can easily convert line rates to inch rates for comparison. A simple “cost per thousand” or “CPM” formula can tell you how much it costs to have your ad seen by 1,000 people in each paper.
CPM equals the cost of an ad divided by the newspaper’s circulation in thousands. For example, if you buy a $200 ad in a newspaper with a circulation of 20,000, your CPM would be 200 divided by 20, or $10. It costs you $10 to reach 1,000 people in that paper.
On the other hand, if you buy a $300 ad in a paper with a circulation of 50,000, your CPM would be $6, a much better deal. Compute the CPM for each paper you consider and you’ll easily see which is the best bargain. But remember, an inexpensive ad in a newspaper that reaches few people in your target audience is no bargain.
Finally, ask about special discounts. Many metropolitan newspapers publish separate zone editions for different zip codes or areas of the city. By advertising in a zone edition, you reach the readers of a major metropolitan paper in your area at a fraction of the normal cost. Some newspapers also offer large discounts if you sign a contract to buy a certain number of inches or lines per year.
Step 7: Decide When To Advertise
Follow these guidelines for picking your best day to advertise: Avoid the clutter days, when your ad will get lost in the shuffle. Wednesday is traditionally “food store day”; Friday is usually crowded with entertainment ads.
Thursday is the traditional “retail day,” a good day to catch shoppers getting ready for weekend spending. Sunday is good because people take more time for a leisurely read of the paper and the ads.
Also consider advertising on days of the week your business is heaviest, payroll days of important local businesses, and just before holidays and local events, such as school proms or reunions, that might put consumers in the market for tanning services.
Step 8: Choose Frequency Over Size
Experts say frequency is one of the most important elements of successful advertising. “Frequency” means the number of times your target audience has an opportunity to see your advertising message.
Experts agree that the average person sees 2,700 advertising messages a day, and they won’t make a decision based on one or two ads. However, most small businesses run an ad for two months and give up because nothing happens.
Generally, it will take three or four months of consistent advertising before you’ll see a significant change in sales. Why? Nine out of 10 people who see your ad this week might not be interested in buying tanning services this week. You’ll get that one customer in 10 with a good ad, but you need to advertise frequently enough so that when the other nine are in the market for your services, they think of you first.
You have to get a `share of mind’ and that will lead to a larger `share of market’. Advertise a minimum of once weekly to make an impact. The good news? Size is not nearly as important as frequency. Unless you want to announce a grand opening or other major event, you never have to buy a fullpage ad. Run lots of quarter-page or smaller ads and you’ll make an impact without blowing your budget.
Step 9: Choose The Best Position
Since your ads will be small, page position is very important. When buying newspaper space you can either request “ROP” (run of the paper) or “preferred position.” ROP means the newspaper places your ad wherever it fits; preferred position means you choose a specific section, page or even location on a page.
Again, the experts are unanimous: ask for a preferred position. Some papers charge a little extra; however, these rates are often negotiable, especially if you are a new account. Many papers will honor your request at no additional cost.
The best place to be is on a right-hand page, near the right margin, above the fold. Main news is generally the best section, since it has the highest readership, but remember your target audience. Appealing to college students? Choose the entertainment or fashion pages. Advertising convenient hours for working women? Buy space in the business section.
The most important consideration is to get next to editorial material—a story, column or photograph. Avoid the “buried” position, surrounded by other ads, which some refer to as “the readership cemetery.”
Step 10: Test And Follow-up
Simple testing and follow-up techniques can tell you how your ads are working and which newspapers work best. You can test headlines and other elements by doing a “split run.”
Run an ad in half the copies of one newspaper; run the same ad with a different headline (or illustration, ad size, whatever you want to test) in the other half. Include a coupon offering an incentive such as a discount or free gift. Write a different code number on the coupon for each half of the run, counts up the coupons and you’ll see which headline worked best.
You also can use coupons to test newspaper effectiveness. Run the same ad in several papers, again including coded coupons. Count how many coupons came in from each newspaper, and you’ll see which paper worked best. Test several types of ads, offers, sizes, newspapers and days of the week until you come up with an “optimum ad, then run the ad with confidence. Remember that consistency plus repetition equals sales. And at the end of the year, you’ll realize that advertising is fairly low-cost for the returns you get.
Computers & The Tanning Salon
Computers allow tanning salons to streamline operations and improve efficiency. The time saved frees employees to look after other aspects of the business, such as maintenance or fielding phone calls. And that’s just on the single-salon level.
Today’s technology allows owners to keep tabs on all of their salons, even from another location and often instantaneously.
On a basic level, computers replace client cards and paper-and- pencil inventory. They open and close the register, crank out mailing lists, generate about any type of report you need—from how many clients you have, where they live, where they heard about you, etc., to daily, weekly, monthly sales figures, tax reports, and payroll reports.
Salon owners need to make sure their new software system will run on the computer they have or will purchase. To do this, they should know the minimum requirements for running the software. Each software vendor has a different list, so find out what it is before buying.
The Hardware
A suitable system can be found through any computer manufacturer, retailer or wholesaler such as Gateway or Dell, CompUSA or Wal-Mart, or Costco or Sam’s Club.
There also are software vendors that sell computer systems to take the headache out of building a computer setup.
Multi-salon owners already should have a network in place to link all salons together. A digital subscriber line or DSL is one option for the salon environment.
It runs on an existing phone line yet allows the business to use the phone at the same time it’s connected to the Internet. Software companies with higher-end packages will advise clients on the optimum hardware for their product, including where to go for networks and other connection devices.
Like software, it’s best not to buy more hardware than needed. It’s up to each salon owner to know what is necessary and what isn’t. There are other ways to minimize costs, too.
Why pay money for a state-of- the-art system when you can buy one generation behind for half to a third of the price?
Depending on needs, a salon should be prepared to spend between $1,000 for an entry-level computer and $3,000-plus for a higher-end computer that includes a monitor, microprocessor, memory, hard drive, keyboard, printer, etc.
One salon in Los Angeles operates on a new Dell computer featuring business-quality components: Windows XP Pro; a 256-kilobyte processor; a 60-gigabyte hard drive; four USB ports; two parallel ports; and a CD burner. Not all salons need what it has, and some salons need more.
A 256k processor, the fastest available a few years ago, is plenty for a salon’s needs today, as is 60GB of hard-drive space. USB ports utilize the new plug and play capability of computers. Basically, peripherals such as printers or digital cameras plug into a USB port and the computer automatically recognizes it.
Four is a decent number to start out. Because of USB ports, parallel ports aren’t in as much demand today but, like 3.5-inch floppy drives, they are good to have around in case they’re needed. Most printers, for example, still require a parallel port. A CD burner is a good choice because it stores lots of information on one disk and is reasonably priced.
Look for a computer with a warranty that covers manufacturing defects and other problems, and understand exactly what is covered under the warranty.
Most new computers are covered for one year, and some warranties include on-site maintenance. Many retailers offer extended service agreements that, in essence, lengthen the warranty.
Weigh the price of the warranty against the price of potential repairs. Major computer manufacturers have technical support and warranties in case their systems break down.
Management Software
The proper operation of an indoor tanning salon can mean the difference between a lean and fruitful season. Thankfully, software is here to help. Whether it’s through security, EFT processing or a number of Internet-based management tools, software lets operators unlock the potential of their salons. All of this leads to an efficient and profitable indoor tanning business.
The most important aspect of salon management software is management. It’s like having a trustworthy micro-manager at your salon while you are there or away.
Software should be able perform theft prevention, detailed reporting, inventory tracking, client data management, appointment scheduling, bed control, and lamp-usage tracking; supply marketing information, a complete point-of-sales system, and growth potential; and contain options for Internet integration.
Software organizes your business and defines your production. It’s easier to keep track of the number of packages sold, new members enrolled, prospects who came in, inventory levels, beds that are clean or not clean, beds that are in use or not in use, and which ones are being used the most. It can also help you monitor staff and maintain their accountability. In addition, it can help you to see what promotions are working based on usage, products sold, etc.
A good program also should assist salon operators with salon promotions, pricing, employee security and tanning-regulation enforcement. Software gives salon owners the control needed to be able to operate as efficiently as possible, and they can sleep at night knowing that software is helping to promote and protect their business.
Since so much is riding on the proper function of salon management software, the decision of which program to buy— and which company to buy from—should not be taken lightly.
There are many fine providers of salon management software. The service and support they give to their salon customers can be as important as the functions of their programs. These are the people who you have entrusted with your most valuable asset. Be sure to ask the company, “Are you in a position to be my most trusted partner?”
A software vendor must be focused on its products in the indoor tanning industry. Companies that only dabble in tanning-salon-management software can be risky. Will they stay on the cutting edge of technology in the industry? Can they dedicate the time to solve problems? Will they be around when the salon owner needs them most?
By contrast, those with a proven track record in the industry will give a salon owner great peace of mind knowing the company will be around in years to come.
Peace Of Mind
Security and protection—from what salon owners can and can’t control— continue to be key functions of management software.
Computers put all files in one centralized electronic location, hence making all of the salon’s crucial information particularly susceptible to damage or theft. Even client-card salons that think they’re safe from computer bugs have fire, theft and vandalism to deal with.
If something were to happen to the information, the salon literally would have to start from day one. This includes rebuilding the entire tanning history of each client, as well as their package histories and balances, etc.
Given the sheer amount of information contained in a typical indoor tanning salon, it is essential that the information is backed up and protected. A good software solution can do both.
Case in point: “We have had three salon clients that have been damaged in fires,” explains one software provider. “If the owners hadn’t converted to software prior to the fire, their client information would most likely have been lost forever.
The salons may have never recovered. We had protected their data on our secure server, away from the actual salon.”
“Away from the actual salon” is the operative phrase here. The Internet has made remote storage a cost-effective reality. Manually backing up key files with tapes and CD-ROMs still is a viable solution for many salons, but it requires a diligent routine by day, week and/or month. Plus, if the backups are kept in the salon, they do little good when disaster strikes.
Protection from external factors such as fire and weather is just one angle of concern for tanning salons. Wise salon owners know not to overlook the security risks their own customers and employees bring every day.
It’s a sad fact, but unscrupulous staff members can steal minutes from tanning packages as well as time on the clock with a few clever keystrokes. Management software should have safeguards in place to limit employees’ access to certain functions.
Devices such as biometric (thumbprint) scanners are being integrated into more and more software programs.
Veterans agree that the fingerprint device, if implemented properly, can reduce employee theft, expedite client verification, secure management sections of the software, track employee use within the software, and even identify employees as they clock in and out.
By the use of multiple levels of software security and equipment like biometric thumbprint scanners, key fobs and photos, you are able to have much greater control over both employee and customer theft.
Information At Your Fingertips
Management software can generate reports and identify trends in an instant, putting power at the fingertips of salon owners that can’t be harnessed by a manual system. All of this is designed to improve efficiency for the salon and increase its profit margins.
In addition to security and protection, the Internet is being used for connectivity. This is the ability of a computer in a salon to be hooked up to another computer in that salon or, on a larger scale, for a computer at one salon to be hooked up to a computer at another salon—down the street or across the country.
Through management software utilizing an Internet connection, salon owners or operators can log in to the system from anywhere in the world and grab real-time snapshots of the business such as how many beds are in use at any given time, up-to-the-minute sales for the day, number of guests for the day, and number of appointments scheduled for the next day.
Furthermore, remote management lets salon owners perform day-to-day tasks such as replenishing inventory, arranging for maintenance of equipment and lamp usage, and issuing requirements to employees.
Off-site management is very important, as single-salon owners usually manage their salons on their own, says another vendor. “Off-site management capabilities can offer some freedom so that the owner does not have to be at the salon during every open hour.”
For the multi-salon owner, software can provide the ability to view activity across multiple locations on one screen.
At a glance, you can see exactly how your salons are doing. In fact, you can even see how long beds have been dirty. Add to this the ability to update pricing and equipment options from any location, and now you’re not only managing your business remotely but also saving time and money.
EFTs
Electronic funds transfers—better known as EFTs—have been used in the tanning salon environment for years. Some say it’s easy money because the cost is debited from a tanner’s account automatically each month, as long as the card is still valid and the funds are there.
“EFTs should be an essential offering by all salon owners,” says another software vendor. “A convenient payment plan for the clients while ensuring a steady monthly income is great for the slow season. It has also been proven that many people sign agreements at the spur of the moment and with great intentions but never follow through—basically becoming free money for the salon as the client may not even visit the beds each month.”
However, each EFT customer’s card must be debited each month, and with the growing number of EFTs, salon managers are spending increasingly more time processing them. Plus, troubleshooting any problems that occur along the way, such as insufficient funds, take even more of a manager’s time away from the business.
“There are still salons right now that are running their EFTs by literally punching them in on their terminal,” says another industry veteran. “If you’ve got 200 or 300 EFTs and you like them all due on the first, every month on the first they have to sit there and punch in 300 credit-card numbers and amounts, one after another, until it’s done. With software, of course that’s all automated.
It pops up on the first and says, ‘I’ve got 300 EFTs to process. Can I do it?’ You say ‘Yes’ and it does it right there in front of you. And of course after every one that’s done it updates your sales records. For the ones that get declined for whatever reason, it will freeze that person’s account so the next time they come in they have to give you updated information. If you’re doing that manually, that’s just a nightmare.”
Still, with older software systems and some new ones, EFTs aren’t processed automatically; the salon still needs to send them to a third party for processing. This extra step gets away from the “make it easy” mantra of salon software.
“You used to have to export a file of all of your EFT customers and send it off for processing,” he adds. “Then the company that did the processing would send you back a return file that you would then have to import that would update all of your records.”
Some software vendors are making it easier for salons to export data for processing, while others are building EFT processing right into their programs.
Wonders Of The Web
The functionality of the Internet and the strengthening of mobile technology have led to the newest trends in salon management software. Functions such as email marketing, text messaging and online account management have taken salonclient communication to a new level.
Because of the organization that salon management software brings to the salon, the operator is able to pinpoint tanners that fit into certain buying patterns and send them specific marketing messages. This is accomplished through the world of e-mail.
Nothing comes close to the power of being able to send a special offer to a target group of, let’s say, all customers who’ve tanned within the last 15 days and have bought a specific bottle of lotion. Each individual e-mail is personal; it won’t list the other 24 recipients who fell into this category.
Another new capability in salon management software takes advantage of the powerful trend in cellular technology: text messaging. Those customers who choose to receive messages via their cell phones can stay up to date with the latest announcements from their tanning salons.
Busy clients may not always have access to a computer to check their e-mail, but they usually have their cell phone or pager with them wherever they go. With most cell phones and pagers able to send and/or receive text messages, salon owners are able to advertise specials or remind clients of scheduled appointments.
Finally, salon management software can enable tanning customers to book appointments online and check the status of their accounts. Clients who can do this can perhaps save a phone call or visit to the salon. The more clients can do for themselves, the more time the salon staff has for other tasks.
A truly integrated software package will allow your customers to schedule appointments, check their account status and make payments online. Better integrating your customer into the lines of communication with your salon not only helps build brand loyalty, but the added service and convenience can also help to retain customers.
All of this new technology has an added benefit: Periodic messages by e-mail or text message as well as online access can provide an extra level of security in the salon. If tanners can keep tabs on the status of their accounts, they will be able to tell relatively quickly if they are being abused.
The capabilities are virtually endless and undoubtedly beneficial to any salon owner.
24-Hour Solutions
As the industry continues to grow, salon operators need to take advantage of every medium that can make their lives easier. Having a Web site provides customers with important salon information 24 hours a day, 365 days a year. A Web site can supply customers with coupons, allow them to manage their accounts from home and open up a whole new world of advertising. The best part is that creating a Web site isn’t as expensive or difficult as many operators may think.
The World Wide Web was first developed as a tool for collaboration in the high-energy- physics community. From there, it spread rapidly to other fields, and grew to its present impressive size. It has been a great success as an easy way to access information. However, salon owners shouldn’t underestimate a Web site’s value as a marketing tool.
“Many people are more comfortable checking out a salon online than in person or on the phone,” says a New Jersey salon owner. “We use our site as a convenience center for our existing members. When they log on to our site, they can manage their membership,” (i.e. cancel, freeze, change account information for EFTs, inquire about memberships, etc).
Another salon owner in Lexington, Ky., says a Web site provides an additional way to expose salons to the public. “It can also take the pressure off the phones in your salon,” he says. “Instead of explaining all the different types of equipment, pricing, store hours, etc., we are able to direct callers to the Web site for answers to many of their questions. We also feature coupons that are available on the Web site only. This helps drive customers into the salon and also provides a way to measure readership of the site.”
Easy As 1, 2, 3
Most of us aren’t computer geniuses, but you don’t have to be Bill Gates to be a part of the World Wide Web. The first step is to identify a Web-site designer. Lots of college students and recent graduates are Internet savvy and capable of creating great sites, at reasonable prices.
You’ll also need to identify and purchase a domain name. It’s inexpensive and the designer can help if you’re unfamiliar with the process. “We simply drew up a mock-up site on paper and handed it over to our Web designer,” says an Idaho salon operator. “Next, we contracted with a host provider to host the site for us. After it was in place, we were able to access and update it from any computer with Internet service, or have the Web designer do it for us.”
When designing your site, it’s important to think of new customers and the questions they might ask, and address those questions on your Web site. For example, you might post a Q&A on tanning and tanning safety, photos of the beds, and prices, and it’s always a good idea to include special-offer coupons.
“It’s going to cost you anywhere from $500 to $2,500 for a nice site,” he says. “We spent $2,000 for the design and creation of our site. That was a one-time cost. Now, we simply pay the host provider $35 a month for the hosting of the site on his server.”
Another salon owner spent $3,500 to design his site and $25 a month to have a service host the site. In addition, he spends $300 to $400 a year to maintain the site.
Experts suggest looking at other tanning sites. What do you like? How easy is it to navigate? Do you want a Flash presentation, frames, etc? Map out a chart listing what you want to present. A standalone name is easier to remember than one combined with another site. For example, www.tanandtravel.com is much better than www.gte.superpages.tanandtravel.com. Choosing you URL will, however, depend on the host you choose to work with.
Web sites are always a work in progress. That can be a big frustration for salon operators. The best advice is to have fun and enjoy the fact that you can come up with ways to make it better every day. They are tools that make it easier for people to know who you are and what makes your salon stand out.
Direct-Mail
Direct mail is a written communication providing information or an offer intended to elicit a response. It is a precise and well-crafted offer that targets prospects and turns them into dollar-wielding customers. Salons that apply this form of advertising find it one of the best and cost-effective methods to create new customers and retain current ones.
There are several reasons why direct mail works so well, says Steve Main, national sales manager of Data Dialog Marketing, Inc. in Sunrise, Fla. “For starters, it’s very targeted,” he says. “Mailing-list databases contain a great deal of marketing information on consumers.”
This information not only includes demographic information like age, income and homeownership status, it also includes buying preferences and lifestyle-interest information. This information allows small-business owners to target a very specific audience that most likely would purchase their product or service.
“Along with the demographic information, small-business owners also can select specific geographic locations to target their message,” he says. “Many small businesses have a very concentrated geographic area where they work. It may be their neighborhood or it may be a particular radius around their business. Direct mail allows them to send a mail piece to a specific target area.”
Direct mail also is scalable, which means salon owners have the ability to adjust the amount of pieces it sends out based on their business cycle. For example, if a salon wants to take advantage of the spring months, they can send out more pieces during that time and scale it back during slower summer months. It’s up to the business owner to decide, based on budget, the market-area or market-penetration factors.
“Because small businesses don’t have large marketing budgets like Coca Cola or Pepsi, direct mail is a cost-effective way to target their marketing communications based on their available budgets,” Main says.
“Direct mail is a good idea because it promotes your salon like no other mailing since it’s an exclusive mailing for your salon only,” says one Missouri salon owner. “With Valpak, ValuMail and other coupon-mailing services, your salon’s ad is distributed along with many other businesses’ ads.” He uses direct mail to promote his salon’s anniversary, several holidays and whenever he needs to stimulate some additional sales.
The Message
Salons typically focus direct-mail campaigns around customers in their database. A typical mailing will reinforce information such as the salon’s address and services, and advertise any specials or new offerings. It’s a good way to notify former clients of anniversary specials or salon improvements.
Direct-mail marketing is a very large business in the United States, and small businesses have many options available to their limited budgets. There are a number of companies that offer small businesses all the tools they need in order to plan, create and execute a direct-mail campaign. With most marketing companies, salon operators can create a direct-mail campaign from their desktop with no human intervention, or they can take advantage of marketing specialists on staff to help with each step. There also are companies that do individual components. Finally, some companies handle all the pieces of a direct-mail campaign and specialize in helping businesses that have never done direct mail before.
Follow That Lead
Tracking results is easy with a direct-mail campaign because salon operators already know who should have received the ads. Direct mail allows salon operators to easily track the results by creating a call to action. This means the customer must bring in the mail piece to take advantage of a special offer or promotion. Salon owners can place a code on the mail piece that requires the person to relate the code to take advantage of the offer.
Small-business owners also can put different codes on different mail pieces to indicate specific demographics of the list or different geographies. This allows the mailer to track the results accurately to determine the effectiveness of a particular part of the mail campaign or the overall campaign. Be sure to provide the recipient with an easy way to respond, such as a telephone number, e-mail address or business reply envelope.
Direct mail probably is the most cost-effective marketing tool available for salons because it is scalable to the budget available and there are a host of options available that affect the cost.
Studies have shown that every $1 of direct-marketing expenditures generates $11 of revenue. Experts agree that successful direct mail is writing, designing and targeting your offer and/or services in a way that makes them irresistible, understandable, credible, applicable to the recipient, and easy to respond as well.
Small businesses are successful with direct mail because they often possess huge amounts of historical data on their existing customers, and want to leverage this data to target customers more effectively for upgrades, new product launches, etc. It has been around forever and it’s the one form of direct marketing that lawmakers aren’t trying to outlaw.
E-mail, telemarketing and fax blasting are forms of direct marketing with legislative restrictions.
Electronic mail has become an acceptable form of communication and, therefore, can be an effective tool to supplement a salon’s advertising campaign. Salon owners can develop an e-mail marketing strategy and monitor it closely to generate leads and turn online traffic into paying customers.
Owners must decide what their goals are and what they want to get out of e-mail marketing, says Chris Sadler, permission marketing strategist for Milwaukee-based Fullhouse Media, which creates business communication to help companies increase their marketplace value. “It may sound like, ‘Well, I just want to sell more time on my beds,’ but it’s more complex than that. You want to drive traffic in your slow months. You want to increase your presence in town.”
Unsolicited e-mails are more commonly called spam— unwanted messages that bombard inboxes every day. Solicited e-mails, on the other hand, are the basis of permission-based marketing, a fancy term for advertisements and other forms of marketing that people want to receive.
“You’re marketing your brand, your message, your services in a channel that is specific to the online world,” Sadler says. “As more and more people have e-mail, it’s really become a good avenue of communicating with your clients.”
But just to be sure your e-mail isn’t spam, it’s best to check with your state’s legislature, as well as your legal representation, says Al Bredenberg, publisher of EmailResults.com, a site where people can find e-mail marketing services. Currently, there are no federal laws that govern e-mail, but plenty of legislation is in the works. Also, there are 36 states with some sort of spam restrictions on the books. For information on federal and state e-mail legislation, visit www.spamlaws.com.
Start With A Good List
An e-mail marketing strategy is only as good as the e-mail list, Sadler says. Fortunately, the lists used by many indoor tanning salons are generated from existing customers who are likely be interested in what the e-mail says.
The better the list, the higher the response rate, he says. “If your list is really well-maintained and sanitized, and you started with a good list, then your click-through response rates are through the roof. I’ve seen higher than 50 percent. At that point, it’s almost like you’re sending an e-mail to your friends—you expect to hear a message back from them.”
Many salon owners who are trying out e-mail marketing are building their e-mail databases at the point of contact. A veteran salon owner in Columbus, Ohio, does a lot of e-mail advertising. “When customers first fill out their skin-type analysis and register to tan at the salon, everyone is asked to give me their e-mails, for possible specials and things like that,” he says. “I keep in touch, probably four to six times a year with specials.”
If e-mails are sent far enough apart, they may not be effective, but if they’re sent too often, recipients could get annoyed and hit the delete button.
Every day is probably too much, Bredenberg says. That’s why he likes the idea of a monthly e-mail. It could be used to highlight a current special or could be more in-depth, such as a newsletter. If salons owners get complaints about receiving too many e-mails, they might consider not sending them out as often.
Do It Yourself—Or Get Help?
E-mail uses resources already available to most small businesses—basically, a computer, e-mail program and Internet connection. At the very least, salon owners may choose to tackle an e-mail marketing program by themselves, without the aid of specialty bulk-mailing software or third parties.
Those needing assistance can buy a software program specially designed for e-mail marketing. A few hundred dollars will buy software that generates simple, plain-text letters to a few hundred recipients, where much more money will get a program complete with campaigns, test groups and reaction surveys. “It moves over into the advertising world at that point, and all of the potential expense that you can incur from that type of campaign,” Sadler says.
A third option is to use an ASP, or application service provider. “It might cost you $20, $50 or $100 a month, but you’ll manage your e-mail list over the Web and do all of your e-mailing through a Web interface,” Bredenberg explains. “The application hosting company will provide software on the back end. You won’t have to have anything on your own computer.”
Before salon owners attempt to send bulk e-mails from their desktop computers, it’s best they check with their Internet service provider (ISP) to make sure it’s OK to run an e-mail marketing campaign from the server. Many ISPs have restrictions on mass e-mailing and it could get a salon owner’s account pulled.
Why Not?
The benefits of permission-based marketing are still being fleshed out, Sadler says. Studies show that businesses need to integrate their message through some combination of television, radio and print advertising. The online world is one of those methods and should be used.
“We see it every day,” Sadler says. “You talk to your colleagues. You talk to people who are friends of yours who don’t work in the same industry that you do. You’re starting to realize that now people have e-mail. It’s the way we communicate today.”
Electronic Funds Transfer
Salon owners must take advantage of every opportunity to increase their profit margins and edge out their competitors. One way of accomplishing these goals is to utilize Electronic Funds Transfer, or EFT. Owners who are not already using this tool are missing out on an important means of generating year-round income and retaining customers.
Plugging into Profits
Gaining popularity in the early 1990s, EFT has become a simple and effective way for savvy business owners to generate consistent revenues. Virtually any salon can benefit from the use of an EFT program, although salons that are computerized and that have at least six pieces of tanning equipment may find it more beneficial.
EFT membership programs are as easy to implement as they are advantageous. A client must fill out a short enrollment form, choosing a payment option such as their checking or savings account or a credit card. Payments automatically are transferred each month from the client’s account to the salon’s account. If a client eventually wishes to stop making payments through an EFT program, he or she generally is asked to give written notice within 30 days of the final transaction.
One of the benefits salon owners receive through the implementation of an EFT program is client retention. Because clients no longer have to think about paying for tanning, as it happens automatically, the end result is that they will tend to stay with the salon longer than they would.
When a customer signs up for 10 tans or a month of unlimited tanning, both packages are used for their duration with no guarantee that the customer will return once the tanning time is used up. However, signing up a customer for a membership and then setting them up on EFT guarantees that the salon will retain that customer month after month.
In addition, by charging an initiation fee for a membership, a salon can make more money up front and charge lower monthly fees. Because the monthly fees are lower, members will decide that it’s not worth it to leave the salon for the two or three months they don’t tan during the summer, in addition to not wanting to pay the initiation fee again. Another benefit is that the salon is generating the same amount of income even if the client does not come in to tan as often.
For the customer, the equation is quite simple: During the first month of their membership, the customer typically will use the beds often, but once they have received their tan, then they simply are maintaining it. The salon is still receiving income every month, but instead of having people trying to get a tan and using the beds a lot, they have people trying to maintain their tan, who don’t use the beds nearly as often.
Additionally, a salon generally is able to offer a discount on EFT memberships as they eliminate the manual labor of accepting payments physically and having to note or update accounts. And since it is automatic, EFT eliminates the human component of time. Experts cite that every time the sales staff has to deal with accounts, it costs money, when they could be servicing their existing clients and enrolling new ones.
Perhaps the greatest benefit of utilizing EFT is its ability to help salon owners generate a year-round cash flow and maintain a steady income level, even during a salon’s slowest season. With EFT, salon owners not only are guaranteed income during slower times of the year, but also know how much income they are going to receive and at what times of the month.
EFT also offers many benefits to the customer. Tanners who purchase memberships know they can maintain their tan throughout the year, taking any last-minute franticness out of the tanning experience. In addition, customers on EFT generally are charged a lower fee since the salon owner is guaranteed that income month after month. Overall, EFT proves to be a win-win situation for both parties.
Marketing An EFT Program
The salon owners who are making money throughout their slow seasons with the use of EFT inevitably are the ones who have a strong sales program. Every new customer should be given the opportunity to join a salon’s EFT membership program, and getting customers to join begins with a strong sales staff.
Veterans agree that salon owners need to have a structured sales program and an effectively trained sales staff. Most of salon operators have heard of EFT; however, they have no concept of the presentation of it or the sales of it. They present it as, ‘We’ll just take $20 per month out of your checking account and you’ll have an unlimited package.’ There’s no value in that—they haven’t gone over why this person is looking to tan, what they like about tanning, or what they did or did not like about their old salon. All of these issues need to be addressed in order for a tanning salon to have a viable EFT program.
Additionally, the salon’s sales staff must know how to give a tour, how to overcome objections on the floor, how to structure the price presentation through to the close, how to take inquiries over the phone and set appointments, and how to obtain referrals at the point of sale.
In addition, he says it is imperative for sales staff to overcome customers’ objections on the floor before they begin their price presentation. If you haven’t overcome all objections on the floor, then when you sit down with the customer and give them your presentation, it’s nothing but a pressure situation. If you overcome objections on the floor while you’re touring the facility, then it’s simply a matter of signing them up.
Many companies provide salon owners with materials and services to aid in their sales presentations. Additionally, there are a number of ways a salon salesperson can market the idea of EFT to their customers by catering to a client’s continual desire for more time and less stress.
In today’s busy world, the customer will know that when they come to your salon, they don’t have to worry about filling out any paperwork. They can do it once and their payments are deducted from their account with no hassle. When they come in, it’s more of a relaxed atmosphere. In addition, EFT is a budgetary tool. The customer can obtain a report from their bank at the end of the month that will show how much money was deducted and what it was used for.
Another effective sales approach is to price a membership attractively and then make the EFT program the only way to pay for the membership. The approach should be non-threatening, such as, “We’re going to put your bank or credit card company to work for you—they’re going to pay this automatically for you every month and you’re not going to have to worry about it.’ The wrong approach would be, ‘This is a debit program, and on the 15th of every month, we’re going to go into your account and take out $30.’ Anything that gives a consumer the impression that they’re losing control will scare them. It sounds more friendly to say that their bank is going to take care of the payments for them and they’re not going to have to worry about it.
Professional And Legal Advisers
Because of the nature and size of your business there will be times when you require both legal and financial consultation. A tanning salon is rarely large enough to employ such services on a full time or retainer basis. Primarily, there are three types of consulting services that you will, at some point in time, need:
- Management Consultation
- Accounting Consultation
- Legal Consultation
These services are sometimes difficult to find, since the better consultants are not found in the Yellow Pages, Internet or other types of advertising. The best way to locate them is usually through referrals from friends or fellow business associates who operate a business similar in size and scope to yours.
Management Consultants
There are many factors for a businessperson to consider when seeking a management consultant. A tanning salon owner/manager is usually the entrepreneurial type who may have expertise in his particular industry or service. Yet, he may lack familiarity with established techniques in the day-to-day management of a salon. The other option also may exist—an owner/ manager who has a general knowledge of business management, yet lacks experience in tanning.
Daily operations of a salon can become very hectic and time consuming. The owner/manager may know his existing shortfalls and not have time in his over-scheduled day to resolve the ongoing problems or to make use of existing potentials.
An analysis of needs and implementation of appropriate programs and controls by a management consultant can smooth the operation and allow the owner time to consider the future of his business and develop its strategy. When becoming immersed in a business on a regular daily basis, it is often easy to overlook the obvious and hence fail to see the danger signs or opportunities of a business. There is a definition for this phenomenon and it is called “functional fixedness” or “behavioral set,” which means the solutions to new problems are derived solely from the bias of past experience. A management consultant can offer an unbiased and new approach and offer insight to a person’s existing business.
Accounting Consultants
There are many small businesses that incorporate outside accounting services in their daily program. These outside services usually provide a general check on their accounting procedures and offer help with the taxes of the business. However, it is important that every person involved in business have a general understanding of basic accounting so that when selecting a proper accountant for the business, the right questions can be asked.
Certified Public Accountants are licensed and tested to ensure their basic abilities. It is wise for you to talk with an accountant, in person, before making a commitment. If an accountant is vague, or speaks only in the jargon of IRS code sections, search for another one who can understand and answer your questions.
It is also wise to make sure that the accountant is familiar with your size and type of business. The fact that his clients may include large corporations is of no benefit to you.
Consider the following questions before hiring your personal business accountant:
- Are there any overlooked tax advantages?
- What type of funding will be needed over the next year?
- Is a pension plan appropriate? And if so, which one and what kind?
- Are all necessary records kept, and all required federal and local reports made?
- Do the present systems meet the projected growth needs?
For more detailed information you should refer to the accounting chapter that will answer in more depth most questions that you will have with regard to accounting.
Legal Consultants
In most cases, a small business only will use the services of an attorney once in a great while. However, during those occasions when services are required, you will want to make sure that you have the best possible advice and representation possible.
Selecting an attorney can be very difficult and frustrating. Before you select the legal services that are actually required, keep in mind the following points:
There is no way to evaluate an attorney from a listing in the Yellow Pages or the Internet. It is best that he or she be referred by someone who is in a business similar to your own, and is familiar with his work. Only then can you be confident that you are selecting someone that you can trust with your legal affairs.
If you, on your own, cannot find someone that you trust, you may wish to contact the local Bar Association. You can present the association with the information regarding the nature and size of your business and that will help them make the right kind of recommendation to you.
In order to make an intelligent choice, interview or speak with at least three prospects before actually hiring someone to represent you. It is important for you to feel comfortable with your selection and have confidence that the person who potentially will represent you and your business, understand the scope and ramifications of the situation.
We also recommend that you listen carefully to what each potential legal consultant has to say and then evaluate this person as follows:
- Is this person vague and evasive?
- Can I relate to this person or does he speak in legal jargon that is confusing to me and hard to understand?
- Do I feel that I can relate to this person and trust him with my problem or need?
- Is this person familiar with my problem or similar problems that have arisen in this type of business?
- Has this person dealt with similar situations and what has the outcome been?
Remember, when considering working with consultants it is very important that they have experience in dealing with your type of business. Dealing with your personal business is very important to you and the survival of your business. You should be very careful and selective in the hiring of outside services. The outcome of their work for you could determine the success of your future investments.
