Tropical Tan

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Tanning Salon Business Plan

Strategy and Implementation Summary

The main priorities of Tropical upon start up are the following:

  • To maintain positive cash flow and aggressively limit expenses to match the projected financial statements.
  • To differentiate the brand and product from the competition by supporting and encouraging a unique customer experience.
  • To outsource important management activities so that any management team gaps are minimized.

By keeping these priorities in mind throughout the start-up process, the implementation team (management team) will maintain a course of action that will lead to solid results.

4.1 Competitive Edge

Tropical Tan's competitive edge lies with the way in which customers are pampered. We will provide extra perks that our competition doesn't such as bottled water after their session, free lattes and other perks described below:

Twice yearly client fashion show – The salon will close for several hours on a weekend and the fashion show will introduce a new line of swimwear. Tropical Tan clients will be encouraged to participate as the models for the new swimwear. The top male and female models will receive a year's worth of tanning each.

Weekly drawings – Giveaways of everything from tanning products to free monthly passes to area restaurant giveaways.

Auto-payment for individual sessions – Clients who prefer individual sessions to package plans will be able to roll their sessions over into packages if they reach the allotted session amount/month.

4.2 Sales Strategy

Those customers who sign up for an initial tanning session (ITS) will receive special discounts on future tans and tanning programs. All returning customers will have access to special tanning plans specifically designed for their needs.

The tanning salon industry recommends that clients tan no more often than every other day. State and Federal regulations recommend no more than once every 24 hours. Tropical Tan recommends to clients that they discontinue tanning temporarily if skin is inappropriately tanned. The company will offer vouchers to clients that agree to discontinue under such circumstances, and reserves the right to refuse service to any client in cases where tanning abuse becomes a problem.  

4.2.1 Sales Forecast

The following table and charts give a run down on forecasted sales. This projection is based on six quick tan tanning beds, $10.00 per tanning session, and approximately 200 clients per day. Half of those clients paying on a monthly basis therefore bringing their session cost down to $2.00 ($50.00 per month). Also sales increase in the late spring and early summer and begin to taper off in September.

Sales Forecast
Year 1 Year 2 Year 3
Tanning Session $387,072 $406,426 $426,747
Lotions/swimwear/sunglasses/etc. $7,272 $7,635 $8,017
Total Sales $394,344 $414,061 $434,764
Direct Cost of Sales Year 1 Year 2 Year 3
Lotions/swimwear/sunglasses/etc. $3,100 $3,500 $3,800
Other $0 $0 $0
Subtotal Direct Cost of Sales $3,100 $3,500 $3,800