ist magazine February 2023

PACKAGE & MEMBERSHIP SALES Selling by the month or via EFT programs may be a more effective way to achieve your financial goals – as you are not relying on the sale of individual ses sions and daily foot traffic to pay the bills. For example: You charge $30 for 30 days of tanning. We then estimate that the average salon guest who purchases this package will tan eight times per month. Using $0.30 per session for operating cost x 8 sessions per month equals a cost of $2.40 per 30-day package (lamp use and electrical consumption). $30 – $2.40 = $27.60 adjusted gross profit per session $6,000/$27.60 = 218 (30-day packages per month) or 7 (30-day packages per day) to break even. Other factors, such as the sale of lotions and accessories will contribute to the overall sales picture. However, TAKING A LITTLE TIME TO ANALYZE THIS VITAL INFORMATION CAN HELP YOU TO MAKE SOUND BUSINESS DECISIONS – EVEN IN A CHALLENGING ECONOMY.

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one shouldn’t rely on these to break even. They, along with spray-tanning and other services should be calculated as separate profit centers within the business model. A detailed, in-depth analysis should include the following: ◆ Calculation of the number of sessions, packages and memberships you need to sell each month to break even. ◆ Breakdown of the contributions to total sales from UV-tanning, lotions, accessories and sunless tanning. ◆ Evaluation of customer spending on all products and services (on both a monthly and annual basis). ◆ Accurate estimate of the cost to operate each tanning system in your business on a per-session basis. Includes all UV units and sunless systems. ◆ Study of the salon’s monthly traffic flow, available operating capacity and actual capacity usage.

YOUR UNIQUE BUSINESS MODEL

A business analysis is a useful tool for identifying and articulating the need for modifications to your organization’s op erating system. The above is an over-sim plified version of a true business analysis, provided to give you the basic fundamen tals of how to begin the process and how to analyze your unique business situation. Plug in your numbers, take a good look and use the information to start working smarter, not harder in 2023! ■

About the Author: Jerry Deveney is the President of SunForce Marketing, Inc. He has been actively involved in the tanning, spa, wellness and fitness industries for more than

30 years. His company provides business analy sis and consulting services in the areas of sales, marketing and operations. Jerry has worked in almost every industry sector including salon management, equipment manufacturing and dis tribution, new product development, regulatory affairs, and sales & marketing.

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