Starting a tattoo shop can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful tattoo shop.
Importantly, a critical step in starting a tattoo shop is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
14 Steps To Start a Tattoo Shop:
- Choose the Name for Your Tattoo Shop
- Develop Your Tattoo Shop Business Plan
- Choose the Legal Structure for Your Tattoo Shop
- Secure Startup Funding for Your Tattoo Shop (If Needed)
- Secure a Location for Your Business
- Register Your Tattoo Shop with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Tattoo Shop
- Buy or Lease the Right Tattoo Shop Equipment
- Develop Your Tattoo Shop Marketing Materials
- Purchase and Setup the Software Needed to Run Your Tattoo Shop
- Open for Business
1. Choose the Name for Your Tattoo Shop
The first step to starting a tattoo shop is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your tattoo shop:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your tattoo shop.
2. Develop Your Tattoo Shop Business Plan
One of the most important steps in starting a tattoo shop is to develop your tattoo shop business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
The following are the components of a business plan:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your tattoo shop.
- Company Overview – this section tells the reader about the history of your tattoo shop and what type of tattoo shop you operate. For example, are you a tattoo street shop, tattoo parlor business, or private tattoo studio?
- Industry Analysis – here you will document key information about the tattoo industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing services like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract customers to your tattoo shop? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your tattoo shop make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
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3. Choose the Legal Structure for Your Tattoo Shop
Next you need to choose a legal structure for your tattoo business and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the owner of the tattoo shop and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
2) Partnerships
A partnership is a legal structure that is popular among other business owners. It is an agreement between two or more people who want to start a tattoo shop together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a tattoo shop include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a tattoo shop is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your new tattoo shop, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
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4. Secure Startup Funding for Your Tattoo Shop (If Needed)
In developing your tattoo shop business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a tattoo shop to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a tattoo shop that they believe has high potential for growth.
5. Secure a Location for Your Business
When opening a tattoo shop, there are a few things you need to take into account:
- Look for a location that’s visible and accessible. You want your customers to be able to find your shop easily, so choose a spot that’s in a high-traffic area.
- Make sure the space is large enough to accommodate your equipment and workspace.
- Select a location that’s close to other businesses that cater to the same clientele as you do. This will help increase foot traffic and expose your shop to new customers.
- Look for a place with ample parking, especially if you plan on having customers come to your shop by car.
- Check the legalities of your potential location. Some localities require special permits or licenses before opening a tattoo shop in their area.
6. Register Your Tattoo Shop with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
7. Open a Business Bank Account
It is important to establish a bank account in your tattoo shop’ name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
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8. Get a Business Credit Card
You should get a business credit card for your new shop to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
9. Get the Required Business Licenses and Permits
You will need to acquire a business license and a permit to operate a tattoo shop. You may also need to acquire other licenses and permits, depending on the jurisdiction in which you plan to operate your business.
In order to start a tattoo shop, you will need to obtain the following licenses and permits:
- Business license
- Tattoo artist license
- Tattoo parlor permit
- Health department permit
10. Get Business Insurance for Your Tattoo Shop
The type of insurance you need to operate a tattoo shop may vary by state.
Some business insurance policies you should consider for your tattoo shop include:
- General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
- Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
- Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
- Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
- Professional liability insurance: This protects your business against claims of professional negligence.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
11. Buy or Lease the Right Tattoo Shop Equipment
To start your tattoo shop you will need a few essential pieces of equipment.
In order to run it successfully, you will need the following:
- Inks
- Grips
- Tubes
- Needles
- Clip cord
- Foot pedal
- Tattoo chair
- Tattoo station
- Tattoo gloves
- Ink paper towels
- Electrical outlets
- Cleaning supplies
- Tattooing machines
- Lighted tracing tables
- Tattoo machine power supply
Make sure to research different brands and models before making a purchase so that you can find the best equipment for your needs.
12. Develop Your Tattoo Shop Marketing Materials
Marketing materials will be required to attract and retain customers to your tattoo shop.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your tattoo shop. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional business website provides potential customers with information about the many services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
- Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media platforms will help customers and others find and interact with your tattoo shop.
13. Purchase and Setup the Software Needed to Run Your Tattoo Shop
The software programs you need to run a tattoo shop will vary depending on the specific needs of your business.
However, some common software packages that a tattoo shop use include:
- Tattoo design software
- Accounting software
- Ink inventory management software
- Customer relationship management (CRM) software
- A custom-built software to manage the scheduling of tattoo artists and appointments
- Scheduling software (if using a PC instead of custom software)
- Point of sale (POS) system, including hardware and software
14. Open for Business
You are now ready to open your tattoo shop. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.
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How to Start a Tattoo Shop FAQs
Is it hard to start a tattoo shop?
Yes, it is easy to start a tattoo shop. There are many things to consider when starting a business, but with a bit of planning and research, you can be on your way to opening your tattoo shop.
How can I start a tattoo shop with no experience?
There are a few things you can do to start a tattoo shop with no experience. You can start by doing some research on the industry and the different aspects of running a business. You can also reach out to other tattoo shop owners in your area for advice and mentorship. Finally, you can get involved in the tattoo community online or locally to learn more about the art form and the industry.
What type of tattoo shop is most profitable?
A tattoo shop that offers a wide variety of custom tattoos may be more profitable than a shop that only offers basic art designs. Custom tattoos require less salesmanship on the part of the artist and therefore tend to be more profitable for both artist and the store. Pre-made designs by comparison do not require as much artistic knowledge and may require more salesmanship on the part of the artist to sell.
How much does it cost to start a tattoo shop?
The costs involved in starting a tattoo shop will vary depending on the business's specific needs and location. However, some ballpark figures to consider would be between $10,000 and $50,000 for startup costs.
What are the ongoing expenses for a tattoo shop?
A tattoo shop can have various ongoing expenses, such as the cost of ink, needles, and other supplies. The shop may also need to pay rent or lease a property, hire professionally trained tattoo artists, and purchase insurance.
How does a tattoo shop make money?
A tattoo shop makes money by charging for their services. They typically charge per hour, with a minimum set amount. Some shops also charge a percentage of the cost of the tattoo should it be requested to be covered by insurance.
Is owning a tattoo shop profitable?
Yes, a tattoo shop can be profitable because it is a relatively low-cost business to start. Another reason is tattoos are increasingly popular. In addition, many people view tattoos as a form of self-expression, so they are likely to continue to seek them out and pay higher prices for quality tattoos regardless of the economy.
Why do tattoo shops fail?
There are many reasons tattoo shops might fail, but one of the most common is a lack of business planning. A successful tattoo shop should have a comprehensive business plan that outlines its goals, strategies, and how it plans to achieve them. Other common reasons for failure include financial troubles, poor customer service, lack of marketing, and running out of supplies.
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