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Start a sensory deprivation tank business by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your sensory deprivation tank business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a sensory deprivation tank business?
It can be quite expensive to start an isolation tank business from scratch. One float tank costs about $25,000, but most stores will want to have at least two or three. High end estimates for start-up costs are around $340,000. This includes everything from readying the space to marketing to utilities to office equipment. It also includes licensing and permit cost for the building. There are a variety of ways to save money by price comparing, opening in a cheap neighborhood, or even by selecing previously used equipment. However, even with all these cost-saving measures, low-end estimates are still around $180,000.
What are the ongoing expenses for a sensory deprivation tank business?
The majority of the expenses will be maintenance and sanitary upkeep of the machines:
- Cleaning products/labor
- Tank maintenance
- Office equipment
- Marketing costs
- Employee salaries
Who is the target market?
Historically, these tanks were meant for clients who have a good deal of expendable income. Those who pay hundreds of dollars for regular spa services will think little of paying for a new experience that can help them relax and unwind. However, you can also promote your service as less of a luxury and more of a necessity to those with specific health problems.
How does a sensory deprivation tank business make money?
Owners can charge clients based on the amount of time they’re in the tank, or they may charge a monthly fee for a certain amount of sessions or even unlimited use. Spa services can also be sold as a package if you offer other services that will complement a floatation tank session.
How much can you charge customers?
Most sensory deprivation tank businesses charge over a dollar a minute, generally in increments of 30, 60, or 90 minutes sessions. Intro sessions may be given at a far reduced rate, such as $100 for two 60 minute sessions.
How much profit can a sensory deprivation tank business make?
On average, a store with two tanks should net more than $100,000 a year assuming steady clientele. Considering tanks only cost $2,400 a year to maintain after the initial purchase, you’ll start turning a profit (minus the costs of the space) in less than two years.
How can you make your business more profitable?
Adding additional relaxation services can help turn your business into a full-service spa. Consider adding massage or sauna services to round out the client’s day of rest and relaxation.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your sensory deprivation tank business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Find the right bank for you, read our review of the Top 5 Banks for Your Small Business
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a floatation center. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Release of Liability
To avoid liability and potential lawsuits, floatation tank businesses should have their clients sign waivers. Here is an example of one such form.
Recommended: Rocket Lawyer makes it easy to create a professional release of liability form for your sensory deprivation business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
Certificate of Occupancy
A flotation center businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a floatation center location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a flotation center business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a floatation center location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your flotation center business will be in compliance and able to obtain a CO.
STEP 7: Get Business Insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a sensory deprivation tank business
Promotion to a certain extent takes care of itself through word-of-mouth buzz. This is such an unusual activity that it manages to generate its own press. However, not all word-of-mouth is good. Some people see sensory deprivation tanks as a waste of time and money rather than a genuine way to decompress or relieve pain. Promotion is likely to occur mainly on the company’s website, where you can both fully address the concerns and give concrete reasons as to why it’s worth taking a chance.
Choose a branding strategy for your company, and stick with it. Whether you focus more on the relaxation or the health angle, you want customers to have a solid idea of what your business stands for. You may want to give customers a taste of the experience for free (or a deep discount) during the first few weeks of opening. Let customers know they have the ability to stop the session at any time, and give them tips for the best way to enjoy it.
How to keep customers coming back
You’ll need your customers to become hooked on the experience of being in the tank. Excellent customer service is important, but it’s not what will keep people coming back. Keep up with each client at the beginning, and find out how they feel about the experience. Address any and all complaints that come in immediately — either by survey, Yelp, or in-person. Expectation setting before a customer even enters the tank will go a long way when it comes to retaining your clients.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Sensory Deprivation Tank Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
This business is good for someone who is already familiar with spa services, and who understands the direct benefits of these tanks.
What happens during a typical day at a sensory deprivation tank business?
Owners may be faced with the following everyday tasks:
- Client intake and scheduling
- Tank maintenance
- Marketing/website upkeep
- Supply ordering
- Administrative duties
- Employee hiring/managing
What are some skills and experiences that will help you build a successful sensory deprivation tank business?
People and marketing skills are definitely at the top of the list. Practically anyone can buy the equipment and set up the space, but the successful entrepreneur will need to convince those in the neighborhood that the service is worth it. This means understanding the values and the principles of the area, and deciding on the best angle when it comes to attracting a clientele. Whether it’s online, on TV, through flyers, or by word-of-mouth, a successful owner needs to anticipate how to make their name.
Owners should also have organizational and leadership skills. Schedules will need to be coordinated, staff meetings will need to be run, and supplies will need to be ordered.
What is the growth potential for a sensory deprivation tank business?
This question largely depends on the area you choose to open in. While this is market is largely untapped in most cities and towns, it is only popular in certain social circles. However, this experience can become very addictive or even be deemed a necessity for certain people. The right business owner can change people's minds and open them up to the benefits of an isolation tank.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a sensory deprivation tank business?
People have very different reactions to the feeling of being inside a sensory deprivation tank, so it helps to understand how individuals interact with and benefit from the experience. People today are so used to having constant sensory distractions, from a blinking smartphone light to the distant sound of bird song. It's welcoming to experience a change, but it's also an extremely foreign concept. You’ll need to collect and study feedback, as well as develop your own personal experiences inside the tank.
Some people report very extreme feelings or events inside, such as hallucinations or strange thoughts. All customers will need to fully understand what they’re signing up for before their first session. They’ll need to sign a liability waiver so you aren't held responsible for their reaction. You'll also need to form a relationship with the health department. They'll need to inspect the sanitation of the tanks and your space before you can open.
How and when to build a team
You’ll likely be able to keep the employee roster low by doing much of the work yourself (at least at first.) As your clientele ramps up, you’ll want to hire people who are organized and who have experienced the sensory deprivation tanks first-hand.