subject: Are you opening a Spa? [print this page] Are you opening a Spa? Are you opening a Spa?
You Want to Open a SPA?
8 Myths & Advice to Avoid Costly Mistakes
While I was at a recent show, I met few new spa owners who have been in the business for one or two years. Unfortunately, they are having difficulties making ends meet and they were seeking our help to avoid closing their doors. This is extremely sad Of course, they all envisioned building a beautiful and SUCCESSFUL business. However, some essential planning steps to insure long term success and sustainability were not addressed.
Venturing into owning and operating a spa is sometimes taken lightly. Many entrepreneurs feel that because they are successful business people in other fields or because they have an MBA, they can plan and operate their spa without spa industry experience, professional advice and/or expert assistance.
A lot goes into planning and positioning a spa for success. Here are 8 myths and some valuable advice to help you save time and money.
Myth one: Build it and they will come
Business Plan & Feasibility Study
Creating a detailed business plan and a feasibility study are the foundation of your spa business venture. This is where you outline your vision, business strategies, type of spa, positioning and capital investment.
The Feasibility study is the financial blueprint to your new venture. It outlines all financial aspects of your business. It should include: Initial investment by room, fixed cost, variable cost, a budget, revenue projections, return on your investment, surplus needed, and more
Myth Two: I can do it by myself
Hiring a spa expert
Can you do it by yourself? Yes, but how successful and how much time will it take you? You can work hard or you can work smart Choosing the right spa expert is crucial, especially during the pre-planning phase. Beware, there are many faux spa experts giving bad advice and collecting large sums of money. How should you select a spa expert? Ask for references, work history, past projects, skills, area of expertise and specialty. The right advisor will help you build a strong foundation for your business.
Myth Three: It looks like a good location
Market research location
You've heard it before, "location, location, location" Yes, it's everything when you're opening a day spa or a medical spa. It's essential to identify the target market, determine demographics and psychographics. In addition, you will also need to conduct a competitive analysis and forecast market share potential. Market research will also be useful when creating the spa menu and selecting the type of services and spa program you will offer.
Myth Four: I have enough money
Investment and funding
Though you are excited and you have a positive outlook, account for opening delays, budget deficits, and high expenses. Plan for it, because something unexpected usually happens. You need to have deep pockets in case outside circumstances arise that you can't control, like a bad or slowing economy. Developing a spa is costly. Make sure you account for all initial capital investments and all expenses to clearly define your financial picture.
Myth Five: We don't need to worry about the menu now
Spa concept, guest experience & menu
The guest experience or the spa program should be one of the first things you do - not the last! Determining the experience is essential for space planning (pre-construction) and guest flow. It also helps determine the type of equipment and space you will need. The menu is critical to your spa's identity and will help define the spa's personality and image.
Myth Six: I only need an architect
Planning the Spa facility space Equipment, furniture, design
I have visited many beautiful spas designed by some of the most renowned architects. But when it comes to functionality, several simply don't work. This is where a spa consultant's input is very useful. They are able to work with your architect to insure that the spa is functional, beautiful and profitable. It's not only about beauty, it's also about functionality. The back of the house is as important as the front; but in many spas, the back of the house does not even exist!
Myth Seven: We'll do the marketing after we're up & running
Marketing plan
An annual marketing plan and marketing materials must be created a minimum of six months prior to opening date. Assigning the marketing duty to an expert could mean the difference between success and failure. Choose your marketing mix and develop a timeline to launch your marketing campaigns. Make sure your website is developed and running before your spa is open for business.
Myth Eight: I'm not worried about finding the right team
Recruiting and hiring the right team
Hire the spa director at least six months prior to opening. There are so many things to do in order to build the right team and to structure the organization properly. When choosing a spa location, make sure the human capital pool is within reach. You don't want a small or limited amount of spa professionals within the region. It makes selecting and hiring people difficult.
Mistakes to avoid:
Retail space, an after-thought Create a spa boutique. You could generate up to $500 per square foot in revenue from retail! Don't miss out on this income opportunity, plan for it.
No Team lounge You step into the spa and see all the team members are "hanging out" by the front desk, here and there because there is no team lounge.
Product storage Not having appropriate storage for retail and professional products makes managing inventory complicated. Depending on the size of your spa, having a product dispensary is a great way to control product costs.
Overbuilding Often, we see this with resort spas. A resort may have 200 hotel rooms and build a 10 or 15 room spa without taking into account where the spa visitors will come from. As a result of over-building, the spa will operate at a very low capacity and will not deliver the revenue forecast or expectations needed to be an independent profit center.
Story Not developing a story or an identity will make it difficult to sell your products and services. Make sure you include it on your website and in your media kit.
Spa Images So many spas do not include pictures of their spa on their website or pictures of treatments. Remember, a picture is worth a thousand words.
Training Don't think the only team training you need is technical training. If you want your spa to succeed, you will need to teach the team how to promote your products and services.
Compensation Plan Don't follow what everyone else is paying. This is a big problem in the spa industry. Look into innovative compensation plans, such as the "VPG ComPlan" from InSPAration Management. It's structured to pay the team their true worth based on Volume Per Guest.
Budget Not having a detailed budget will cripple you. You want to be able to manage your business, not have it manage you. A budget is a financial management tool to help chart your financial success. You don't have the time to create one? You may purchase one by visiting www.insparationmanagement.com
This article is written by Dori Soukup, founder and CEO of InSPAration Management, a leading spa business firm specializing in business development, education and executive coaching.
If you are planning a spa or you already have a spa and are seeking ways to improve your overall performance, contact us at info@insparationmanagement.com
