Creating a Gem
It has been 10 years in the making, and, as of this past December, Jewel Spa-located in Minneapolis-became a reality. The idea to open a spa came about when I conceived of the whole Spa Central concept in 1994, which was to create a distribution company built on a foundation of education that consisted of not only treatments and how to sell more products but also marketing and business training. Focusing first on Spa Central's distribution channels created the financial platform for us to eventually launch Jewel, which is just one of several Jewel Spas planned, each being its own spa business model. The second Jewel Spa-this one with a medical spa model-is scheduled to open the fourth quarter of 2005 on the Gulf Coast of Florida. Then, in 2006, two more Jewel Spas, one in New York City and another in southern California, are planned.
The view from Jewel Spa’s reception desk looks out onto a waiting area and into the salon. Behind the wall to the left are the spa treatment rooms, lockers, and pedicure stations.
Each Jewel Spa will be an actual working model of Spa Central's "Spa Smarts" program, which includes all of the processes we teach. It is meant to be an example-in-action of everything Spa Central distributes as well as act as an educational facility for our clients. The model of this Minneapolis Jewel Spa (we call it "Block E" after the name of the mall it's located in), is what I call a "luxury day spa"-a description I use for a very high-end, small (2,000- to 2,500-square-foot) business. It also includes a salon. In its creation, we did everything that we tell our clients to do to ensure it stays a working example from which others can learn. Because the plan was to make it a "luxury day spa," we took particular care to ensure that the materials and installations were top-of-the-line. The floor is cork flown in from Portugal, and there are two freestanding shampoo units that cost $6,000 each that were imported from Germany. The reason I went with such items was to make Jewel Spa extremely different. I can't imagine anyone else doing it, so it keeps us unique. For me, it was a marketing cost.
It is one thing for us to sit in an office and advise a client that they should do this or that in order to solve whatever problem they have and base that advice mostly on instincts and theory and hearsay. It is completely another thing to bring clients into Jewel Spa and show them firsthand a working spa-in-action. Theory is all well and good, but there is no substitute for a practical working model before your very eyes. However, Jewel Spa is not meant to be a substitute for the expertise and advice offered by top industry consultants with years of training and experience.
The spa’s custom pedicure stations
For many business owners, profit is a learned behavior. I know that this is true for me. It took me more than five years to learn what it meant to be profitable-we literally lost money for the first five years we were in business. Most of us in the spa industry learn from the school of hard knocks. How many MBA graduates do you know running spas? In order to be profitable, you must understand a few basic things. The formula for profit is critical, yet simple: R – C = P. This formula translates into Revenue minus Costs equals Profit.
The combined amount of money lost in the spa industry before one learns to make a profit can be staggering. In Spa Central's case, we started out slowly for the first year-and-a-half. Then we exploded and grew revenue by 491 percent in one year alone. Like most brand-new entrepreneurs, I put the pedal to the metal, and nothing could stop us. Nothing-except for poor accounting practices and out-of-control costs. We soon found ourselves in major financial trouble. We woke up and realized that we had $7,000 in the bank and owed our vendors almost $300,000. Most entrepreneurs would have filed bankruptcy and called it a day. But my wife, Lisa, gave me her vote of confidence and that was all the encouragement I needed to stand and fight. Not only did we pay every vendor every penny we owed, but we also built a thriving spa business in the process.
Director of spa operations for Spa Central, Barbara Fashingbauer, and Charlie Slater, president
Jewel Spa is designed to help new spa owners avoid this learning curve by encompassing everything they'll need to be successful. This includes helping with design and layout; construction management; equipment specifications; menu creation; financial reporting; inventory management; spa treatment development; retail sales and merchandising; marketing programs; staff hiring and training; the development of a board of directors; setting up music, phone, and computer systems; spa owner and director training; and more.
So far, it has been a success. Jewel will break even in its second month. We invested half a million in the 2,000-square-foot space. Sixty-five percent of our revenue is spa related (the other 35 percent comes from the salon).
Jewel Spa is Spa Central's commitment to quality. Our vision is to be among the strongest offerings in the industry. This means being a strong distributor of equipment, product, and supplies. It means operating successful Jewel Spas that demonstrate a strong bottom line. And, finally, it means offering some of the best and highest quality educational programs available anywhere in the industry. With all this available to our clients 24 hours a day, 7 days a week, and 365 days a year, how can we lose? - Charlie Slater
A state-of-the-art Russian hydrotherapy device that features a Vichy shower, steam, light therapy, a vibrating bed, and more.