Spa Business Plan



Spa Business Plan

Your Spa should provide a comforting, yet stimulating, atmosphere in which customers will be able to relax both their body and mind, reconnecting their daily lives to their true purpose through a wide range of holistic methods including massage, body works, energy works, and hair styling.

You could offer tailored packages for individuals who want to detox, lose weight, relax, or simply be pampered. Allow guests to use the facilities and indulge in treatments for the day, also offer two-day, weekend, or weekly accommodation and treatment packages in association with local hotels. Because your guests are likely to stay some time in the vicinity make sure you provide them with meals and drinks.

A Spa provides a venue for individuals to enjoy a relaxing break while indulging in leisure activities and spa treatments. Features should include swimming and hydrotherapy pools, saunas, steam rooms and fitness suites. Treatments should include body wraps, aromatherapy, reiki and LaStone therapy, along with beauty staples such as facials, massages, manicures and pedicures.

A spa salon is an establishment dealing with cosmetic treatments for men and women. Other variations of this type of business include hair and / or beauty salons. There is a distinction between a spa salon and a hair salon and although many small businesses do offer both sets of treatments, spa salons are based more around face and body treatments.

There is a lot more to spa therapy than merely giving a facial. The industry has evolved and matured with an increasing emphasis on health and fitness, total well-being and bringing out the best - the "natural beauty" - in all of us.



A spa salon provides a venue for individuals to enjoy a relaxing break while indulging in leisure activities and spa treatments. Features may include swimming and hydrotherapy pools, saunas, steam rooms and fitness suites. Treatments can include body wraps, aromatherapy, reiki and LaStone therapy, along with beauty staples such as facials, massages, body wraps, manicures and pedicures. The spa may also feature a swimming pool and exercise classes.

Spa salons typically offer tailored packages for individuals who want to detox, lose weight, relax, or simply be pampered. Some spas allow guests to use the facilities and indulge in treatments for one day, and many also offer two-day, weekend, or weekly accommodation and treatment packages. They may be run from independent premises in tranquil, rural settings, or incorporated into a hotel with suitable facilities. Many spa salons also have restaurants, and include meals and drinks in their packages.

The day spa industry is growing more rapidly than anyone can imagine. The number of spas has increased dramatically in recent years, and the number of spa-goers continues to increase every day. Consumers are beginning to realize the benefits of spa services and the importance of finding a reputable facility to rely upon. As expected, consumers are beginning to expect the best for their money, when it comes to spa services.

In years past, any gym, beauty salon, nail or hair care facility could claim themselves as a day spa, as long as they offered certain day spa services. The increase in popularity, as well as, the aging of the baby boomer population, has caused a significant interest in this industry.

The following highlights are characteristics of a successful day spa.

Size

  • The average spa is less than five thousand square feet. (Seventy percent reported being 5000 square feet or fewer).
  • The average spa has ten or fewer total treatment rooms.
  • Of these treatment rooms, four or fewer are dedicated solely to massage and four or fewer are dedicated solely to esthetics. A few spas reported having specific hydrotherapy or wet rooms. In addition, most spas report having manicure and pedicure stations.
  • Most spas have private treatment rooms, eliminating semi-private or partitioned rooms.
  • The average treatment room is between 100-150 square feet.
  • Eighty percent of spas reported having a shower and changing area and 64% reported having a lounge / relaxation room.
  • Many also provide a boutique, conference or meeting facility and separate men’s and women’s locker facilities.
  • The typical spa is a stand-alone facility.
  • Of those reporting to be part of another facility, the majority are with medical facilities, plastic surgeons, fitness centers or hotels.

Business Mix

  • The average spa has 5 or less technicians / spa therapists on staff. Very few spas have more than ten.
  • Nearly 75% of staff are employees, while 25% are independent contractors.
  • Almost half of the spas reported offering a benefits program to staff.

Products Sold

  • Most spas (92%) generate about 60% of gross sales from services.
  • Responses were virtually evenly distributed between 20% and 60% of sales being from esthetic services.
  • Over 25% generate 50% or more from body therapy services.
  • Nearly 75% generate less than 30% of their sales from retail sales.
  • More than one-in-three spas realize less than 10% of sales from nail services.
  • 15% of spas reported that over half of sales come from hair services while the balance of spas fall between 10-39%.
  • More than half of respondents (60%) generate between 70-90% of gross sales from services.
  • Almost 40% of spas reported that 80% or more of their services are rendered a la carte.
  • Almost one-quarter of respondents deliver 50% or more of their services as a package deal.

Customers

  • Most spas reported that males represent 10-20% of their clientele, with an average between 31 and 40.
  • Nearly 50% of respondents reported the average age of their female clients is over 40.
  • Among the top six products retailed by spas, Dermalogica is the top line (24%) purchased by customers.

Promotional Mix

  • Incentive pricing appears to be a popular marketing technique to increase business.
  • Traditional advertising mediums of newspaper, print (including trade magazines), radio / TV, and yellow page ads dominate spa promotions.
  • Spas are beginning to have reciprocal referral relationships with other professionals. Plastic surgeons share the highest reciprocal referral relationship with 37%.
  • Dermatologist and Chiropractors are close behind with 34% and 33% respectively.

Business Mix / Future Plans

  • Less than half of spas offer a guarantee for their services.
  • Fewer give customer evaluations (38%) or the mystery shopper program (32%).
  • Many spas are not aware of the training their technical staff receives (41%).
  • Outside this unknown area, most spas offer between 26-50 hours of training for their technical staff.
  • Thirty percent offers training for their support staff.
  • Many spas plan to expand their facility within the next year (44%).

The world of beauty therapy is one of the faster growing service professions and industries. Well-trained, professional beauty therapists are always in demand and opportunities are continually increasing. Reports suggest that the sector has seen an 80% increase in demand in the past two years. There are continuing developments in beauty products, equipment practices and procedures. It is important to keep abreast of these trends to offer clients up to date, sought-after treatments and procedures.

Trends usually originate in the United States and stem from what celebrities / film stars are favoring. Body hair removal / shaping and nail art / sculpting, for example, are current beauty must-haves.

You should try and establish your spa as a dependable destination to which your customers can always come to escape the stresses of life, and rejuvenate their energies, their souls, and their lives. If there is local competition in the area it is important to offer customers new services that they cannot get in the local community.

To become a profitable business you need to increase your customer base through becoming a highly sought after destination. Your goal, beyond becoming a profitable business, is becoming a trusted destination whereby the customers in your community can come to refresh their minds and bodies, replenish their energies, reconnect to their purpose, and rejuvenate their lives!

Your mission should be to enhance the inner and outer well being of your clients through outstanding customer service, excellent professional education, the use of environmentally correct products and a commitment to your community.

Your spa should guarantee client's satisfaction and should provide a professional and pleasant experience at all times.

To be successful in the spa business you need to provide excellent services, performed by expert professionally licensed and certified staff, to your clients with body, skin, massage and facial treatments. Proven to reduce stress and rejuvenate the body and mind using the sciences of stress reduction and health rejuvenation treatments and products.

Customer Service is the key - The success of your salon will be directly linked to your ability to satisfy your customers. There is no better way to retain existing customers than to have them leave happy on every visit. Word-of-mouth can be an extremely effective form of organically marketing your salon or spa. Customer service starts with a courteous and professionally trained staff.



There are two kinds of day spas. Standard day spas offer body treatments and lifestyle services. Medical spas offer traditional spa services as well as services that must be provided by a licensed medical practitioner, such as acupuncture or microdermabrasion. Although conventional wisdom holds that true day spas must offer hydrotherapies like Scotch hose treatments or underwater massage, many day spas do well with "dry" services alone.

Armed with demographic analysis, you can write your Spa Business Plan. This Spa Business Plan serves as a road map for charting your course and as an invaluable tool for showing a banker how savvy you are about the realities of running a Spa. Your Spa Business Plan should include a description of your Spa and the services you will offer; market strategies (developed with the demographic info you've collected); an analysis of your competition; an operations and management plan; financial information, including assets and startup capital needs; an income / expense forecast and repayment plan; and a personnel management plan.

Also early in the Spa Business Planning process, you'll have to decide exactly which services to offer. Treatments typically offered in day spas include massages; facials and makeup application; electrolysis; spa manicures and pedicures; body treatments like exfoliation, wraps and packs; aromatherapy; and hair services like cutting, styling and coloring. Hydrotherapies include hydromassage, mineral and seaweed baths, dry and moist heat, and shower massage. Many spas also offer healing therapies such as Reiki (a form of "energy healing") and acupressure, which must be performed by a licensed practitioner, depending on which state you're in. Services are usually combined in complementary spa packages that guests enjoy for four to eight hours, but a la carte services and pricing should also be available, both for clients who wish to mix and match their treatments, and for clients who would like to try something new.

The range of services you plan to offer will have a major bearing on the kind of facility you choose. Because spa equipment (like massage tables) tends to be large, you'll need enough room to spread out and create a relaxing atmosphere. Your best options are a free-standing building, a storefront property or a strip mall store. Mall locations usually aren't optimal since people go to malls to shop, not to enjoy a salt glow treatment, and the rent is often very high.

To attract an upper-end clientele, you'll need a well-appointed facility in a good neighborhood. It should be located near other retail businesses for good visibility, and it must have sufficient parking. Don't underestimate the importance of parking. Spa services are not necessities, not even for baby boomers bent on preserving their youth. So if it's difficult to visit your spa for any reason, they won't come—or they'll go somewhere else.

Day spas require a lot of equipment to emulate the level of service found in resort spas. These capital expenditures will drive your start-up costs up fast, so you're likely to need financial backing to get the show on the road. If you find that your grand plans exceed what the bank will offer you and what your personal savings can float, control costs by buying quality used equipment or scaling back the number of services you offer.

The equipment typically needed for a day spa includes massage tables, manicure and pedicure stations, and reclining facial chairs. Hydrotherapy equipment may include a Scotch hose, a hydrotherapy tub, a sauna, a Swiss shower, a Vichy shower, a Jacuzzi/whirlpool tub and a steam cabinet. Be prepared for sticker shock: High-quality spa equipment can run from $4,000 to $25,000 per item or even higher. So be sure to buy wisely. It's easy to get caught up in equipping your spa with the best of everything—then never using it.

Once you have all this cool stuff in place, you will need qualified people to use it properly. Cosmetology schools are the best places to find personnel trained to handle the equipment and products found in a day spa.

The staffers you'll need are:

  • aestheticians, who do massages, facials, waxing and specialty services like hydro-therapy;
  • massage therapists, whose services provide stress relief and relaxation;
  • electrologists, who remove excess body hair; and
  • manicurists, who provide manicure and pedicure services.

Other professionals you may need on your team include a makeup artist, a hairstylist and a spa manager, as well as staff for the reception desk.

Advertising is also crucial for a successful start-up. Because it's likely that some people in your market may never have considered visiting a spa or are unfamiliar with the services you offer, it's up to you to tell them about the spa's many benefits. Besides a Yellow Pages line ad, you may find a well-placed series of ads in the local newspaper or publication targeting upscale readers is an effective way to introduce the public to your services.

Once you hook your customers, make sure you provide the best level of service possible. Word-of-mouth advertising is crucial in this business and can mean the difference between many years of tidy profits or ignominious defeat. Meanwhile, a savvy way to cash in on good word-of-mouth is by instituting a referral program, which rewards clients for referring new customers.

As a spa owner, you need to keep up on trends, both in the spa industry and in business in general. To keep abreast of what's new, consider joining a professional trade association like The Day Spa Association (201-865-2065) or the International SPA Association (888-651-4772). You'll also find tons of information online that can help you do business better, faster and smarter.



A very simple start-up Spa Business Plan is a bare-bones business plan that includes a summary, mission statement, keys to success, market analysis, and break-even analysis. This kind of business plan is good for deciding whether or not to proceed with an idea or venture, to tell if there is a Spa Business worth pursuing; but it is not enough to run a Spa with.

What’s most important in a Spa Business Plan? It depends on the case, but usually it’s the cash flow analysis and specific implementation details.

  • Cash flow because it is both vital to a Spa Business and hard to follow. Cash is usually misunderstood as profits, and they are different. Profits don’t guarantee cash in the bank. Lots of profitable Spa Businesses go under because of lack of cash. It just is not intuitive.
  • Implementation details because that’s what makes things happen. Your brilliant strategies and beautifully formatted Spa Business Planning documents are just theory unless you assign responsibilities, with dates and budgets, and lots of following up and tracking of results. Spa Business Plans are really about getting results, improving your company.

Writing A Spa Business Plan

Writing A Spa Business Plan

Writing A Spa Business Plan

The actual writing of a Spa Business Plan can be as easy as it is simple in format, but who should develop the Spa Business Plan? That is an easy question with a straightforward answer. The owner writes the Spa Business Plan. The combined thought processes of you and others and their agreement on what makes up the business plan is most important. The agreement of what is in the Spa Business Plan is more important than the mechanics of writing the Spa Business Plan. Said another way, the paper is not as important as the agreements to what goes on the paper.

When you cannot find the answers to specific questions, ask for advice. If you want to break away from the corporate grind and go into business for yourself, schedule a lunch with someone who has made a similar move to discover what it takes. You are sure to get lots of useful first hand advice to implement in your Spa Business Planning.

If you are in business on your own, chances are you have to shoulder most of the Spa Business Planning efforts yourself. But that does not mean you cannot enlist the help of friends or colleagues to read over what you have written and tell you whether it makes any sense. Outsiders bring a new perspective to your Spa Business Plan. Just remember one thing: You need honest opinions, so make sure the people you choose feel free to praise and criticize.

The last thing you want is a yes person giving you guidance.

The Spa Business description section should include information about the nature of your Spa as well as list the primary factors that you believe will make your Spa a success. When defining the nature of your Spa (or "why" you are in business), be sure to list the marketplace needs that you are trying to satisfy and include the ways in which you plan to satisfy these needs using your products or services. Finally, list the specific individuals and / or organizations that you have identified as having these needs.

Primary success factors might include a superior ability to satisfy your customers' needs, highly efficient methods of delivering your product or service, outstanding personnel, or a key location. Each of these would give your Spa a competitive advantage.

Here is a question to ponder: Are you the right person for your Spa Business? Because running a Spa is a very demanding endeavor that can take most of your time and energy, your Spa probably will suffer if you’re unhappy. Your Spa can become a massive problem if you do not have the skills and temperament to run it. Simply put, no Spa, whether or not it has sound financial backing, is likely to succeed unless you, as the prospective owner, make two decisions correctly:

  • You must honestly evaluate yourself to decide whether you possess the skills and personality needed to succeed in a small Spa Business.
  • You must choose the right location.

Spa Business Plan

Spa Business Plan

Spa Business Plan

A small Spa Business is a very personal endeavor. It will honestly reflect your opinions and attitudes, whether or not you design it that way. Think of it this way: The shadow your business casts will be your shadow. If you are sloppy, rude, crafty or naively trusting, your Spa Business will mirror these attributes. If your personal characteristics are more positive than those, your business will be more positive, too.

You do not need to be psychologically perfect to run a small Spa Business. But to succeed, you must ask people for their money every day and convince a substantial number of them to give it to you. By providing your goods or services, you will create intimate personal relationships with a number of people. It makes no difference whether you refer to people who give you money as clients, customers, patients, members, students or disciples. It makes a great deal of difference to your chances of ultimate success if you understand that these people are exchanging their money for the conviction that you are giving them their money’s worth.

The Spa Business Plan needs to be checked on a quarterly basis which is consistent with the cycle of most businesses. During quarterly meetings you check to see how you are progressing against your projections. A danger exists in this phase. You may have a tendency to overcorrect on the business plan. Take prudent actions but don’t micromanage the Spa Business Plan.

The quarterly checks are a good time to see how your team is supporting the Spa Business Plan. Look for signs that the management team has involvement at all levels of the company. If you are getting the results you need then everything is probably working. If you are not meeting targets you need to start asking serious questions. Do not ask “why” questions, but rather precision questions. For example, you might ask:

  • What caused you to miss your target?
  • What are three things you plan to do to correct the situation?
  • When do you plan to have the situation corrected?

The annual update is actually an extended version of the last quarterly meeting. Plan for a little extra time at this session because you will need to review the complete year. Once more the danger will be for you to overact on the numbers. It is rare to find a company that was too ambitious with the numbers for the first year of its plan. The single most common reason an organization doesn’t reach its goals for the first year of the Spa Business Planning process is the lack of management attention. The management team wandered off-track, didn’t honor their commitments, and didn’t hold each other accountable. If you do not meet your annual target, look inward first.

Great Spas were planned that way


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