Services

The Tanning Business

The secrets to a successful tanning business from Suntan Systems

Suntan Systems offers sound advice on how to make the most out of this lucrative market!

In the sports genre movie, “Field of Dreams”, the delusional character played by Kevin Costner builds a baseball pitch on his farmland to attract the spirits of past legends of the game on the premise of voices in his head that promise, “ If you build it, they will come “. If only the investment and establishing of a beauty salon were that easy!

After many years in business I have come to the realization that any truly successful relationship between supplier and customer has to be based on the precept that the commercial dealings between the two realize success for both. While this might seem exceedingly obvious, there are many industries, and indeed many businesses within different industries, who have no real concern for the success of their customers and interact with their customers for the sole reason of selfish furtherance of their own profitability with scant regard for the ongoing success of their customer. While many might consider this a cynical view, one only has to consider the rise of all sorts of consumer protection groups to understand that this truly is a growing problem in today’s business world. Fortunately those businesses who strive to create the “win-win” situation with their customer base are those that will survive to do business tomorrow and beyond.

It is with this in mind, and coupled with the fact that, on occasion, we have had to deal with unfortunate business failures of our customers, I was prompted to give a little advice on the issues to consider when assessing the opportunity to purchase a sunbed for the establishment or addition to a business. What qualifies me to give this advice, you might ask. Firstly I am currently involved, and have been involved in many businesses including restaurants, engineering, furniture manufacture and retail. I am a qualified Chartered Accountant and finally I have been involved in the import, sale and backup service of sunbeds for many years and have had the opportunity to get unique insights into the differences between successful businesses who provide tanning services and those who, quite frankly, have missed the boat!

We have noted that the volume of sunbed sales in South Africa has risen substantially over the past 3 years and believe that this can be attributed mainly to the positive macro economic forces which our country has been experiencing over the past five years. Another fact is that there definitely seems to be a swing away from the use of natural sunlight as a tanning method. However the biggest trend that we have noted is the move towards the creation of “one stop shops” for the provision of beauty services and products including, inter alia, slimming, tanning, hair, nails, non surgical makeovers etc under one roof. The reasoning for this has many parallels in the advent of the “super” malls as a single destination for most shopping needs from perishable foodstuffs to large appliances and clothing. We can remember that as little as 20 years ago, one would still go to different locations to purchase unrelated items. We can also cast our minds back to even more recently to remember when first we started to see clothing sold in grocery stores! The reason is that convenience has become the key critical driver in the retail industry. We would far prefer to drive once, to find parking once, to do all our shopping once, in one regional shopping mall. The point is further emphasized when you consider a country like the USA, who are even further down the retail evolution chain. You can literally buy almost anything at a Wal Mart Superstore and even though these are single shops, they easily reach the size of some of our smaller malls! The key driver is convenience.

Having seen the business model in England, where sunbed studios are stand alone businesses, we know that this cannot work in South Africa. The critical issue for salons today, is that they have to recognize that a sunbed does not represent a profit centre on its own, but a value added service that enhances the full experience and available options to its clientele. Effectively the fact that a salon has a sunbed will obviously generate revenue on the use of the sunbed, but other services and products offered by the salon may be boosted merely by the fact that a customer can now receive all their required services at one place. In my opinion the days of a salon offering only an exclusive slimming service, or nail service, or beauty treatments etc are numbered.

Having established the correct reasoning for the purchase of a sunbed, it is important to consider the capital costs, both direct and indirect associated with the establishment of a UV tanning service within your business. Within our range the prices start at just under R10,000 and go up to R65,000 although at the lower end of the scale one might question the suitability in a commercial environment. Certainly other brands pricing goes significantly higher than this. In terms of space requirements, no more than 4 square metres is required and even smaller areas can be used dependant on sunbed type and configuration. Other issues which need to be considered are good ventilation and possibly air-conditioning although this is not a pre requisite. Power supply and adequate changing facilities, piped music and appropriate atmosphere are all considerations.

Once the capital costs have been calculated, it becomes critical to assess the day to day running costs of the sunbed. These costs include the direct costs of electricity and consumables as well as the amortization of the capital equipment. Clearly, if there is a lack of financial acumen, the business decision to purchase a sunbed is often a difficult one and we supply software which gives the customer the ability to do “what if” analyses in order to determine return on investment and profitability on the sunbed as a standalone unit based on scenarios determined by the client. This obviously does not take into account the spinoff benefits mentioned previously but gives a good indicator of the business justification to purchasing a sunbed.

Before purchasing a sunbed it is always recommended that the purchaser check on the following:

1. Is the sunbed manufactured by a reputable manufacturer with appropriate quality certification? We have noted the influx of locally developed and manufactured sunbeds which are poorly designed and equipped with inferior quality parts. The only advantage created by this is that they are cheap but come with their associated problems.
2. Is the product registered with the appropriate South African authorities as a radiation emitting device? If the product has not been registered, it is illegal to operate it in South Africa. This is a little known fact.
3. Does the supplier keep an adequate stock of replacement parts?
4. Does the supplier have a good network of backup service agents?
5. Is the supplier willing to give traceable references?
6. How long has the supplier been in business? This is always a good indicator of the quality of product and backup as suppliers of good quality products and services will remain in business for the long haul. Too often we are faced with customers who have been fleeced by fly by nights and they are no longer able to get spare parts for their machines because these machines are no longer supported.

Sunbeds, at the end of the day, are machines, and machines do break down. Essentially if you have followed the guidelines followed in point 1 above, these problems should be few and far between. Sunbeds have very few parts that breakdown and with the exception of tubes and starters, which are consumables, a sunbed should literally give decades of trouble free operation. We have one of our entry level beds operating in Harrismith in a commercial environment that has been operating for 19 years with only tube replacement. As with any electrical equipment, care is required and if the unit is well looked after, it will require less maintenance. If your research in terms of points 3 and 4 above have yielded a positive result, then any breakdowns will be quickly dealt with.

The other consideration when purchasing a sunbed is which configuration to buy. The two basic configurations of a sunbed are the vertical (or tan can as they are sometimes known) and the more traditional horizontal or lie down models. Both have their advantages and disadvantages and at the end of the day it comes down to personal preference. The vertical models are preferred because of hygiene issues in that each customer is not lying down in the same area as a previous customer. It is also considered that vertical sun beds allow more flexibility in terms of moving around inside the unit which gives rise to better all over body exposure. Finally they take up less space and the smaller units can fit in a shower cubicle. The obvious disadvantage to the vertical is that clients have to stand rather than relax in a horizontal position but this is also partly negated by the fact that that they have more powerful tubes to allow for a shorter tanning time. We have noted an increasing popularity in the verticals and over the years we have noted that our sales share has migrated from a small percentage to an almost even amount of sales of verticals and lie downs today.

The critical issue in determining whether to purchase a sunbed to enhance your business offering is to do your homework in terms of all the items listed above. On too many occasions I have been contacted by a prospective purchaser wanting to buy a sunbed on the basis of a couple of their regular customers suggesting such an offering. Remember that a few customers do not create a sustainable and justifiable purchasing decision. It is however a good indication that there is a demand for potentially lucrative income stream. Determine the demand, do the investigation, follow the guidelines suggested and if all the conclusions suggest that you have a lucrative opportunity, then jump in with fervour knowing that you have limited the risk profile by considering all the relevant facts.

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