Location, Location, 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.

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.

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.

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.”

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.”