If you are considering an investment in a tanning business to start a new salon, researching your competition is a must. How do you do it? First off, tan at all of your competitors. Make a list of questions such as: number of customers during peak and non peak hours, pricing, equipment, image/cleanliness. If they aren’t busy it can be all to easy to dismiss it as they have terrible customer service or old equipment but the real reason could be that there is too much competition and too few tanners.
Make sure there is enough population to support another tanning business. Don’t automatically think if you provide superior equipment and open your doors all of the competition’s customers will come running to you. It will take time to get people to come to you and some customers may be very loyal to the owner.
When you put together a tanning salon business plan (you are doing one right??) you use the pricing from the lowest priced competitor and see how many people it will take to reach break even. Starting out new, you are going to have a much higher operational cost than the older tanning businesses. It could come to them lowering their prices in hopes of you going out of business which is a realistic scenario if you are thinly capitalized and don’t have much of a cash cushion.