Spa Start-Up Guide

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Congratulations on your decision to enter into the spa industry. This start-up tool-kit has been designed as a step by step guide to developing your spa business.  It is recommended that you read through the guide from start to finish before embarking on your entrepreneurial venture, this way you will have a basic understanding of the business as well as the necessary tools, resources that will be required.  The key thing to remember is that there is information specific to the spa industry that you need to know and plenty of sources of information at your disposal.

When you are ready to actually begin the implementation  phase of your venture compile the various tasks you will need to do into seperate projects.  This will give you a tangible framework to follow that will allow for continuous monitoring and assessment of where you are in relation to the fruition of your project

Industry Outlook

The Spa /Aesthetics & Wellness Industry is a multi-billion dollar industry that shows no sign of slow down.  Beauty consumers are not compromising in their desire to look and feel their best.  An industry that previously catered to the elite consumer now services people of every economic class and ethnicity.  A day at the Spa is no longer a luxury but an absolute necessity in coping with emotional and environmental stresses.

The North American Spa Industry - Fast Facts:

Spa Locations:

• There are an estimated 12,100 spas throughout the U.S. and 2,100 in Canada.
• In the U.S. the largest spa category is the day spa.  Geographically, the distribution of spas in the U.S. generally reflects the population with the Northeast being teh largest region.
• In Canada, the distribution of spas is concentrated in Ontario, British Columbia, and Quebec.

Spa Visits:

• There are approximately 136 million spa visits made in the U.S. annually.
• Sixty percent of these are to day spas while 27 percent are to resort/hotel spas.

Revenues:

• The U.S. spa industry generated an estimated 13 billion dollars in revenues in 2005.
• On average, half (52%) of a spa's revenue is derived from various spa treatments.
• Day spas account for just under half (49%) of the industry's revenues.

Square Footage:

• The U.S. spa industry occupies an estimated 91 million square feet of indoor space.
• Resort/Hotel spas account for an overwhelming 37% of industry space.
• On average, 39% of space in the U.S. and Canadian spas is occupied by treatment rooms.

Employment:

• An estimated 347, 600 people are employed by the U.S. spa industry.
• Fifty-one percent (51%) of these employees are full-time, 34 percent are part-time and 15 percent are on contract.
• Employee wages and salaries totalled approximately $7.9 billion dollars in 2005

~ Your Business Model ~

A business plan is a mandatory first step in developing your business.  It is however the most overlooked aspect by most entrepreneurs. A good buisness plan forces you to answer three fundamental questions:

1. Who are my customers?
2. What is my competitive advantage?
3. What are my profit expectations in relation ito my revenue and expenses?

A business plan in not a one time deal, it is a fluid document that you revise and edit at various stages of the life of your business. Whether you create it yourself, or with the assistance of  business plan development tools currently on the market, it important  to have the plan critiqued by a professional.  Most cities in North America have a local small business centre where you can make an appointment to see an advisor for a nominal fee.  An accountant or local banker can even review your plan and provide you with sound business advice.  There focus will undoubtedly be on the economic viability of the business as it is outlined. You are a potential business customer for these professionals and they welcome an opportunity to establish a relationship with you.  The business plan can act as an entry point for that.

Every business plan should contain the following information:

1. Executive/Owner(s) Profile - Summary the skills and experiences the business owner(s) bring to the table.
2. Business Overview - Synopsis of the business, and your main products and/or services.  Should also include daily operations of the business.  Staff duties and responsibilities.
3. Marketing Plan -  Identifies the demographical information about your customers and how you plan to engage them.
4. Financial Statement - Balance Sheet indication anticipated revenues and expenses for a 12 month operating period. (A cash flow forecast should accompany the balance sheet to give an anticipated monthly revenue vs. expense breakdown.)

 ~ Are You Ready? ~

In order to prepare yourself for your venture it is important to answer the following questions truthfully and in as much detail as possible.  It may be helpful to tackle only one question a day.  If you feel comfortable sharing the answers to your questions with someone your respect it is recommended that you do so.  Sometimes other people are able to offer insight in areas where you may have internal blinders.With each question comes the opportunity to learn more about yourself and to subsequently identify both positive and negative behaviors you may engage in that would interfere with your venture.  This is not a comprehensive list by any means but should help you to begin the thought process required pre-start-up.

1. When you picture yourself as an entrepreneur describe in detail what you envision.  ( How will you spend your day? What will you drive? Where will you live?  Who will you associate with? Where will you shop?)
2. Are there at least 5 people you would feel comfortable approaching for advice or assistance?  Name them?  What help do you think they will be willing and/or able to provide? (Keep in mind this may include family, friends, business associates, peers, professionals, etc.)
3. What skills/abilities and experiences do you have that make this buisness the right business for you? (e.g. 5 years direct customer service experience, detail oriented, 8 years managerial experience, etc.)
4. If I don't do this business what will it mean?
5. The following are my current resources: (Include cash/credit resources, equipment, informational (i.e. this guide), etc.)
6. List atleast 3 examples in your life when you have done whatever it takes to achieve your goal.  Was this experience a positive or a negative one?  Why?  What would you have liked to change about the experience?
7. How would you define good service?  Do you think everyone is entitled to high standards of service?

Ready ~ Set ~ Go

Theres's lots of work to do and more than likely you cannot dedicate 100% of your time to the development of your buisness.  As recommended in the introductory segment of this guide it is recommended that you approach your business plan as a number of individual interwoven projects that contain a number of specific tasks. Identify each project and list in order the tasks you will have to do, the resource requirements for each task,  the due date for each task, and check off  &/or follow-up for completion.  The following is a sample:

Sample Project 1: 

Source Location:

Tasks/Resource Requirements/Due Date/Completed-Follow-up:

1. Contact a Real Estate Agent ---Call 5 Agents in local area----Resource requirements include: Phone book, Digital camera, Note pad.---Due date:  March 15th-------Completed/Yes
2. View and Critique 10 potential locations within a 20 km/mile radius-----Complete Location Suitability Assessment--Due Date: June 28th---Completed/No .
3. Negotiate Lease Terms/Review Leasing Agreement with Lawyer---Call lawyer, Obtain Copy of Lease--Due Date---Aug. 10
4. Sign Lease---Appointment property manager/agent---Due date:  August 25

~ Financial~

Your financial plan is the most important element of your business plan.  If seeking the financing to start or develop your buisness the information you provide in your plan will determine if lenders feel your venture is a solid business investment. Your plan should be as realistic as possible, it should be timely and have supporting data to justify your numbers.  The financial plan is a fluid document that will need revisions throughout the life of your business.  The financial plan should be able to answer the following questions:

1. What are my current resources vs. debts?  a.k.a. Assets vs. Liabilities.
2. What will be my resources vs debts for the next year? (2 years, five years, etc.)
3. Given my current pricing strategy how much revenue wil I make? What will be the costs incurred in relation to the revenue?
4. What are the assumptions that I am making when making my financial projections? Am I using a worse case vs. best case scenario?
5. Is this business/financial plan viable?

~ Location ~

No doubt you have heard the phrase "location, location, location". In the case of the Spa services industry this holds true.  Choosing a suitable location for your buisness is paramount!

Some Spa's are converted estates others are located in office buildings or condominiums, others still are stand alone structures.  Keep your mind open to all possibilities when determining the appropriate location.  The key things to take into consideration are accessibility, monthly lease/mortgage costs (should be no more than 30% of your operating budget), zoning by-laws, and proximity to your target market.  The types of services you offer may also dictate the type of location you choose.  For the most part however, the location should have the following:

• Space for Reception & Waiting Area
• Space for Storage of Equipment & Supplies
• Space for Individual Treatment Rooms
• Hot & Cold Running Water
• Washroom(s) 

At minimum you would require at least 1500 sq. ft. of space, which could possibly include 3 treatment rooms, reception area, storage and washroom..  The space you choose may more than likely require some leasehold improvements.  If your leasor is willing to take on this responsiblity all the better, if you do however have to higher a contractor ensure you get a full cost breakdown for the cost overruns tend to effect you bottom line well into the life of your business.   It may be more economical to facilitate this project yourself.  Consider what structural improvements may be necessary and get a minimum of 3-5 cost estimates from local contractors. If you decide to assume leasehold improvement costs yourself negotiate a reduction in your lease terms or a reprieve of a few months in exchange with your prospective leasor or agent Be clear in communicating the end result you want.  Don't be afraid to ask each contractor for suggestions and cost-cutting options.  Keep in mind that ideally treatment rooms should be soundproof so  that the client is not disturbed during treatment due to outside noise.  It is important to have a lease agreements reviewed by a real estate lawyer as these documents tend to be lengthy and for the most part favor the leasor.  Creating Ambiance

Every Spa environment is unique.  The goal is to create a sense of serenity and comfort.  The environment should entice the senses.  Colours should be warm and inviting, scents should be subtle and un-intrusive, textures should be smooth and crisp.  There are hundreds of design books, and magazines available to give you ideas and inspirations.  Start a design scrapbook of your own.  Once you have decided upon a look or feature you would like to incorporate add it to your book until you ocme up with a personalized tool full of everything you would like to have in your spa facility.                                                               

~ Spa Services ~

The services you offer your clients are limited only to your imagination.  Most spa facilities offer atleast 5 different aesthetic/body services.                  

Service options may include:

• Massage  (Please note Therapeutic Massage must be completed by a license professional check your city or state for licensing requirements.)
• Hot Stone Therapy
• Reiki
• Shiatsu
• Acupuncture (Please note Accupuncture must be completed by a license professional check your city or state for licensing requirements.)
• Facials
• Hair Removal
• Laser Treatments
• Light Therapy
• Relaxation Therapy
• Manicure/Pedicure
• etc....

Regardless of the types of services you choose ensure that staff are fully trained to deliver the service.  Check other facilities for pricing to ensure you are consistent with others in the marketplace.

There are hundreds of products available for you to choose.  Products should be high quality and suitable for various skin types.  Products range in price and will be the types of products you choose will more than likely depend on your budget.  Some Spa facilities develop their own product lines.  This does require some level of knowledge and expertise though and may be something to consider once your facility has been established and has developed a solid customer base.

~ Personnel ~

Your people are your most important asset.  Keep this in mind in every decision yu make in managing your Spa business. Your front line staff determine what your customers experience will be.  Treat them well and you will reap the benefits! Provide the staff with the tools, training, and support they need to do their job professionally! Simple things such as an adequate lunch/break room, an anonymous suggestion/feedback box, quarterly team building outings will go a long way in contributing to a positive yet productive work environment.  These things, however intangible they seem, will ultimately effect your financial bottom line. 

Staff duties, policies and procedures should be clearly outlined in a written format.Customer service training should be a mandatory component in your orientation process. If this is an area of weakness for you bring in professionals on an as needed basis to facilitate this human resource management role. 

~ Marketing & Promotions ~

A good marketing plan with built in flexibility, evaluations, and reporting components will take you a long way in achieving compounding success with your business  This is the area where most entrepreneurs understimate the importance of.  The marketing plan should be developed prior to launching your business and when possible should be crtiqued by a professional in  the service industry.  Your marketing plan should identify, amongst other things, the following:

• Who your customers are.
• Who your competitors are.
• What is unique about your buisness in comparison to others.
• Where you are the life cycle of your business and the industry.
• The most effective ways to reach your target market.

The marketing plan should look at your business from two vantage points.

1. A broad based one from an industry perspective.
2. And a micro-based one from a customer perspective. 

Each perspective will enable you to take all things into consideration when marketing and promoting your business.

~~ Congratulations ~~

To have the courage and foresight to embark on a journey towards self-empowerment is a great accomplishment unto itself.  To have come to this pathway in your life signifies for most people a realization that it is possible to live a life doing what you love while serving your community..  Owing a Spa and assisting people towards a wellness lifestyle is an altruistic mission.  Good luck in your venture! Stay Spa Savvy!!!!!!! 

We hope your find this guide helpful for Spa Items visit our ebay store at Spa Savvy !!!

Disclaimer:

The information contained in this guide is intended as a general source of information and should be used in conjunction with other printed and non-printed resources when developing your business.  Spa Savvy and its owners will not be held liable for any damages, and/or claims brought against it as a result of reading this guide.