Tattoos have received mainstream acceptance in most places in the world, and as such these businesses have sprung up in popularity especially over the past 20 years. One of the strengths about owning and operating a tattoo shop or tattoo parlor is at the margins generated from services are very high. As this is a service based business, the real underlying cost for providing a tattoo is simply the cost of ink as well as any credit card charges that are rendered by third parties. In some cases, the other underlying cost associated with a tattoo is whether or not tattoo artists are considered to be independent contractors of the location. This is true for most tattoo parlors and tattoo shops allow third-party artists to render services at their facilities. The cost associated with starting a new tattoo shop are also very low. Typically, these businesses can be started for as little as $20,000 provided that the owner is going to be one of the initial tattoo artist rendering services to the general public. All that is really required is a retail location that is suitable for providing tattoo art for people.
One of the weaknesses faced by tattoo shops is that there is always a substantial amount of competition not only from other locations but also from independent artists that travel to their clients locations to do a tattoo. Additionally, there are certain liabilities associated with rendering tattoos to people given that age verification systems need to be put in place as well as sterilization procedures to make sure that these locations are operating within the letter of the law. One of the other issues that can be considered a weakness among tattoo shops is that during times of economic recession – these businesses may have a decline in the revenue given that tattoos are not considered a necessity. However, this risk is ameliorated by the fact that most tattoo do not cost very much money and people will continue to get them in any economic climate. This is especially true for among people I consider tattoos very much a part of their lifestyle.
Most tattoo shops can expand by simply establishing new locations. There are a substantial number of opportunities that are available for tattoo shops to increase the revenues. First, they can establish mobile locations where people can have a tattoo completed from the comfort of a truck or in a person’s home. Mobile services as it relates to tattoo artists have become popular in the past five years. Additionally, many tattoo shops will hire artists that are very well known that will render tattoos to their customer base. This substantially boost the billings of the business on a yearly basis. Usually, the tattoo artist receives a revenue share of 70% to 80% of the total fee for rendering service. Rendering services such as piercings is another way that tattoo shops expand their revenues.
As it relates the threats, there’s really nothing that is going to impact the way that tattoo shops operate. Tattoos have been done for millennia and they will continue to be in demand among people of all ages. Really the only threat that is faced by a tattoo shop is a substantial and ongoing recession that would impact the amount of money that a person can spend on getting a tattoo. Also, although it is a very limited risk – pieces of legislation could impact the way that tattoo shops operate especially from a sterilization and safety perspective. However, this risk is very limited and it would be expected that most tattoo shops could alter the way they do business if there was any additional regulations implemented in regards to providing tattoo artist services to the general public.