Value Drivers for a Tanning Salon
The COVID-19 pandemic had an impact on tanning salon businesses. Since the pandemic, the tanning industry is struggling to bounce back. If you are looking to buy, grow, or sell a tanning salon, it is important to understand the value drivers for a tanning salon. Knowing how to increase the value of your tanning salon will help grow your business. A business appraisal for a tanning salon can also help you understand how to not let the effects of the pandemic close your doors.
In the following paragraphs, we discuss key value drivers for a tanning salon. Whether you are buying, selling, or growing your tanning salon, you must understand the value of a tanning salon. Obtaining a business valuation is the best way to understand the value. Peak Business Valuation, business appraiser, is happy to provide you with a business valuation for a tanning salon. We can also answer any questions you may have about valuing a tanning salon. Schedule a free consultation to get started today!
Key Value Drivers for a Tanning Salon
The following value drivers for a tanning salon are helpful to know whether you own a tanning salon, or are looking to buy or sell a tanning salon. Peak Business Valuation, business appraiser, is happy to complete a business valuation for a tanning salon. This will help you understand how to increase your tanning salon’s value. Reach out by scheduling a free consultation. For additional information read, Valuing a Tanning Salon.
Location
The first value driver for a tanning salon is the location. Salons that locate in higher-traffic areas generate more walk-in clients. In addition, a highly-visible storefront in a busy area creates good exposure and brand recognition. Locating near a shopping mall, department store, or other popular locations creates a competitive advantage.
Consider the surrounding area and who to market to. The surrounding population influences clientele, hours of operation, and product offerings. For example, if there is a large college in the area, having operating hours in the evenings may be beneficial.
When valuing a tanning salon, Peak Business Valuation, business appraiser, always considers the location. For additional questions, schedule a free consultation. We are happy to help!
Diversify Services
Tanning salons must expand services due to shifting preferences as well as high competition. There are many concerns over the health and safety of both UV tanning beds as well as sunless tanning. In addition, there is a high level of competition from other salons and the sale of at-home tanning services. Instead of just UV tanning beds, many tanning salons are offering a greater product mix. This includes spray-on tanning, airbrush tanning, and body contour services.
Demand for tanning services is also somewhat seasonal. So, it is important to offer more than just tanning services. Many salons are beginning to offer additional spa services such as facials, massages, manicures, pedicures, aromatherapy, and body wraps. It is important to have diverse streams of revenue to continue attracting clients.
More clients mean more revenue. When valuing a tanning salon a business appraiser analyzes your financial statements. In addition, Peak Business Valuation, business appraiser, analyzes services and revenue when valuing a tanning salon.
Customer Loyalty & Reputation
One of the most important value drivers for a tanning salon is its reputation. The quality of services, cleanliness of the salon, as well as customer service, influence customer loyalty. Customer loyalty is key to maximizing the value of a tanning salon. Offering punch cards and gift cards can help create recurring revenue.
In addition, employees have a high influence on customer experience. The greatest source of revenue for a tanning salon is repeat customers. Clients who have a better experience in the salon are more likely to return, as well as refer others to the salon. The more favorable feedback and referrals your tanning salon receives, the greater the client base it will have.
For ways to grow your customer base, schedule a free consultation with Peak Business Valuation, business appraiser. We are happy to answer any questions you may have! See also the Value of Customer Loyalty. As well as, Growing your Business through Recurring Revenue.
Economy
Next, the economy has a significant influence on the value of a tanning salon. For example, during the COVID-19 pandemic, salons were “non-essential”. In addition, there was less disposable income and a higher unemployment rate. These factors decreased the demand for tanning salons and thereby negatively impacted the value of a tanning salon.
As the tanning salon industry recovers from the pandemic it is important to keep in mind the value drivers for a tanning salon. This includes keeping up with research and regulation of products. With different studies, many worry about the safety of UV exposure. In addition, there are growing concerns about the safety of the chemicals in spray tan products. By keeping up with recent research, you can answer questions in the salon. This also enables you to comply with regulations.
When valuing a tanning salon, Peak Business Valuation, business appraiser, takes into account the economy. They compare the strengths and weaknesses of your salon to your competitors in the current economy.
Online Presence
Lastly, having an online presence is vital for a tanning salon. It is important to have active social media accounts. This increases your ability to connect with customers and advertise. In addition, clients can follow and tag you on posts about their experience at the tanning salon. It is a great way to expand marketing as customers can market for you.
Create a Google My Business page and ask for google reviews. Many potential clients use google to find a tanning salon. It is important to have good SEO so that more people come across your tanning salon.
When valuing a tanning salon a business appraiser such as Peak Business Valuation, analyzes online presence and SEO. They look at your profit margins and how much you spend on marketing. For more ideas, see The Value of SEO.
Summary
Knowing key value drivers for a tanning salon can enable you to maximize the value. Whether you are buying, growing, or selling a tanning salon, you need to know the value of a tanning salon. This may prove complicated to figure out on your own. A business valuation professional, such as Peak Business Valuation, is happy to use their training and experience to value your tanning salon.
Obtaining a business valuation is the first step to understanding how much a tanning salon is worth. A business valuation determines the fair market value of a tanning salon. A business appraisal for a tanning salon also identifies ways to increase its value.
Peak Business Valuation, business appraiser, works with tanning salons across the United States. We are happy to answer any questions about the value drivers for a tanning salon and valuing a tanning salon. Schedule a free consultation by clicking the link below.
For more information, read Valuing a Tanning Salon, Valuation Multiples for a Tanning Salon, and How to Value a Tanning Salon.
