If you’re thinking of opening a sunbed shop, you’ll need an idea of the potential monthly expenses involved. So, how much does it cost to run a tanning salon?
As sunbeds consume a lot of energy, utility bills will make up a large part of your tanning salon monthly expenses. You’ll also have to factor in rent, staff wages, insurance and accounting fees, among other things.
In this article, we’ll explore the typical monthly expenses you can expect when running a tanning salon. We’ll also explain how ActiveSalon software can help you manage your business and save money.
Rent or Mortgage Payments
One of the main tanning salon expenses to consider is rent. This may vary according to the location of the salon, and its size.
As a rough guide, you should budget at least £1,500 – £2,000 per month for a small tanning salon. Prime retail space in a big city, however, may cost several times this.
If you’re looking to buy a tanning salon, your monthly mortgage repayments will depend on:
- The total amount borrowed, based on the sale price minus the deposit
- The interest rate, and whether this is fixed or variable
- The mortgage term (how long you have to pay back the loan)
For example, if you borrow £30,000 at 3% interest with a term of 5 years, the monthly repayment will be £539.06.
Whether you rent or own your tanning salon, you’ll need to budget for business rates. This is a kind of tax charged on most non-residential properties. You can pay it yearly or in monthly instalments.
In England, this is based on the property’s ‘rateable value’. For properties worth under £51,000, the yearly rates are calculated by multiplying the rateable value by 49.9 pence. Larger properties are subject to the standard multiplier of 51.2 pence. If your tanning salon is worth less than £15,000, you may be eligible for small business rate relief.
Water, gas, electricity, telephone and broadband bills will make up a significant chunk of your tanning salon monthly expenses.
So, how much does it cost to run a tanning salon monthly? There are many factors that can affect your bills, such as:
- The size of your salon
- The number of sunbeds
- Which telephone and broadband package you choose
- Whether your salon has a water meter
- Your energy supplier and which tariff you are on
Sunbeds use a lot of power, so your largest monthly bill will be electricity. Typically, tanning salon utilities (average) cost £1,500 – £7,000 per month for electricity alone. It’s important to do your own research into the tariffs available in your area.
Insurance is another ongoing cost to add to your tanning salon expenses spreadsheet. At the very least, you must take out employer’s liability insurance. This is designed to protect you in case an employee becomes ill or injured as a result of their work.
The most basic tanning salon insurance starts at around £30 per month, depending on the provider. However, you may also wish to look into additional policies such as commercial property, contents and public liability insurance. You can reduce your tanning salon monthly expenses by paying for your insurance annually.
Of course, you’ll also need to pay your staff each month. As of April 2022, the National Living Wage (for employees aged 23 and over) is £9.50 an hour. For younger workers, the National Minimum Wage rates are currently:
- £9.18 for those aged 21-22
- £6.83 for 18-20 year olds
- £4.81 for apprentices
For example, a 23-year old tanning salon employee working 40 hours a week should earn at least £19,760 a year. This works out to approximately £1646.67 a month.
However, to attract and retain high-quality employees, you may need to offer more competitive rates of pay. You’ll also need to budget for pension contributions and National Insurance.
You’ll need to file annual accounts and company tax returns for your tanning salon. Though you can do this yourself with a salon income and expense sheet, it’s much easier to hire an accountant. Bookkeeping and financial reporting can be a complex and time-consuming task.
To begin with, accounting services may add between £60 and £260 to your average monthly salon expenses. As your business grows, however, this cost may rise.
Tanning salon marketing comes in many forms, from traditional letterbox leaflets to comprehensive social media campaigns. If you have a website, you’ll also need to pay for domain registration, hosting and security.
Most businesses spend 2-5% of their revenue on marketing. So, if your tanning salon brings in £40,000 per month in revenue, this equates to £800 – £2,000 a month. However, you may wish to increase this budget to 10-20% in your first year, as part of your tanning salon start-up costs.
Retail Stock and Supplies
Don’t forget to include retail products in your monthly budget. If you’re wondering “how much do salons spend on products?” the answer depends on what you sell. Jewellery and cosmetics will cost more to restock than lip balms and protein bars, but they may have higher profit margins.
As well as goods to upsell to clients, you should also maintain a steady supply of essentials such as:
- Cleaning products
- Office stationery for the reception area
- Spare bulbs
- Tanning lotion
- Protective eyewear (disposable or reusable)
Compared to bills and wages, these supplies should not have a huge impact on your finances. However, they still need to be accounted for in your monthly tanning salon expenses list.
Tanning Salon Software
Gone are the days of paper client record cards and appointment diaries. Digital tanning salon software is a quicker, easier and more secure way to store client details and manage bookings.
ActiveSalon, the UK’s leading tanning salon software, costs no more than a cup of coffee per day. It comes with plenty of helpful features to help you manage your business, such as email marketing, POS tools and T-max manager integration. The handy automatic booking reminder feature can even help to prevent missed appointments, saving you money.
To explore everything that ActiveSalon has to offer, start your 3-month free trial today!
Loukas has been a part of the tanning industry since 2013; what he doesn’t know isn’t worth knowing! As a Director of SolarTrack Systems, his responsibilities don’t just include ActiveSalon, but a variety of different tools and packages.