Progress Thread: nzbm's entering the fastlane

[nzbm]

So I've been backing and forthing about a potential business idea that will be slowlane initially but because I want to franchise it around NZ and Australia has the potential to become extremely fastlane.

Basically I'm going to open a spray tanning salon with 3 main products:
- spray tans on VersaSpa machines
- high margin retail products
- monthly direct debit payments with unlimited tanning* to make managing cash flow easier

So far I have done the following:
- setup the website/facebook/twitter because I like that jazz
- incorporated the limited liability company, registered for sales tax
- set up a company bank account
- obtained a company credit card
- entered into negotiations with the landlord for contribution towards store fitout
- applied for vendor financing from the distributor to lower upfront cash requirements
- seen my solicitor to get employment agreements drawn up
- transferred X from my savings account to the business account =)

Basically I want to open by the end of the year max. I have next to nothing to put into the business BUT I have worked retail before and know the business. My ex girlfriend used to work at a beauty salon which are my main competitors and quite simply the ladies that own these businesses do next to NO marketing for their spray tanning services and charge ridiculous prices.

My target market is 16 - 25 year old females who value their appearance. After discussing with my female friends how they currently get their tans ALL of them said they'd definitely use the automated tanning booths instead of the tanning beds they currently use.

There is a major untapped market for high school girls who can't stretch the $49 a beauty salon would charge but will spring for a lower price.

The gross profit margin is ~ 70% which is enough to cover rent, leases, overheads, payroll and start paying myself a salary soon.

How can this be fastlane?
1. From Day 1 I will have someone working in the store with me so I'm not a slave to the opening hours.
2. I have already started writing an operations manual wiki from which standard operating procedures will evolve on an as-I-go basis
3. I have started talking to a franchise consultant who said after a year I could definitely think of franchising.
4. I have a big goal - 50 stores in 5 years in NZ and Australia.
5. If it goes well I will expand with cash flow into other cities on my own bat and be franchising at the same time so expansion is key.

Boom! Got that off my chest.

[458]

70% profit margin? lol...

[nzbm]

sales - direct costs = gross profit
gross profit - expenses = net profit

learn some basic accounting before you lol aye

net profit should be between 10% and 15% conservatively

[minamo]

Interesting concept!

However,you might want to look into the following things:

-Your target group is pretty secure.You might want to expand your focus on older people too, since their natural beauty has dissapeared.

-I have a feeling you might be moving too fast.Your already talking with franchise consultants,and want to expand rapidly. Make sure one or two stores are running well before you proceed.Qaulity over qauntity

-Make sure you have enough employee,s. Automatic booth,s are quick money,but people lose that personal touch,and can be suspicious about it.Keep it personal

-You said your competitors are doing no marketing,but besides social media i have not seen any marketing from you either. Have you thought about discount cards for returning customers for example?

Best of luck!

Henk.

[Joseph Bona]

How are you different from the competition??

[nzbm]

Over the last month I've gone and visited my 4 biggest competitors. Let's just say that the way they run their ship is very different to how I will run mine.

At the moment I have several balls in the air waiting on quotes for fitout etc to get back to me.

I have set things up so you can book appointments from the Facebook page through Appointy. Once I have launched I'll post up links to everything in this thread.

I have also been amazed at how many extra things I need to do have come up, but no problem, it's not like I have anything else going at the moment so I can do this right. I'm not going to rush and if I'm open by the end of the year I'll be happy.