Spa Business Articles

Strategies to Improve Spa Profitability

Get Comfortable with Business Generally, spa owners and managers must overcome business phobias. Unlike resort spa directors who must be comfortable with "crunching numbers", day spa owners are often poor financial managers. Spa owners often abdicate their finances to accountants who review financial statements, most times performing a "post mortem" on last month's records. Make Re-booking a Priority "Rescheduling drives everything; retained customers will account for 80% of your business's worth, but most often represent only 20% of your clientele,"...

Challenges to Spa Profitability

Ease of entry into the spa industry Increasing competition from the medical, hospitality, beauty, and fitness industries Inherited beauty industry traditions Extensive use of independent contractors (booth rental tradition) Out of control compensation costs that create ever-increasing losses Low margins; Similar to restaurants, spas have traditionally low margins (2% to 7% return on investment is common, vary rarely higher than 15%) Poor retailing skills and high commissions on retail 10% commissions in the spa industry versus 2% to 3% commissions...

Sample Table of Contents for a Day Spa Business Plan

1.0 SITUATION ANALYSIS 1.1 BUSINESS DESCRIPTION 1.2 OBJECTIVES 1.3 DEVELOPMENT BUDGET 1.4 COMPLETION SCHEDULE 2.0 AREA DESCRIPTION 2.1 LOCATION 2.2 POPULATION 3.0 PROGRAM FORMAT 3.1 TOUCH THERAPY 3.2 HYDROTHERAPY/ AROMATHERAPY 3.3 SKINCARE & SPA TREATMENTS 3.4 RELAXATION THERAPIES 3.5 CLIENT EVALUATION & EDUCATION 3.6 RETAIL SALES 4.0 MARKETING PLAN 4.1 ENVIRONMENTAL OVERVIEW 4.2 TARGET MARKETS 4.3 COMPETETIVE ANALYSIS 4.4 MARKETING COMMUNICATIONS 5.0 HUMAN RESOURCE STRATEGY 5.1 STAFFING PLAN 5.2 JOB DESCRIPTIONS 5.3 EMPLOYEE INCENTIVE PLAN 6.0 DEVELOPMENT STRATEGY 6.1 RECEPTION...

3 Tips to Prepare for a Spa Opening

Work in a local day spa before you open your own property. It is a great way to "dip your toe in the water before getting wet". You can see if you like the people and the day-to-day day spa environment. Attend some trade shows such as The International Spa Association Convention ( www.ispaconference.com ). That will give you a good overview of the industry, and allow you to network with other day spa owners. Understand that, to be profitable,...

Careers in Spa Public Relations

Follow your instincts. The very best thing you can do is create your own job and have a company hire you to do it. It's really not as far fetched as it sounds. Here's a good system to follow when you are starting your search. Ask yourself a few questions and write down your answers. What are your strongest attributes? What level of experience have you achieved? How much time have you spent working on marketing/advertising/PR for spas? What kinds...

Public Relations for New Spa Openings

Write a press release about your new spa and create a press kit and send to important local and national media. Attempt to call the editors to see how you can help them with your expertise. Think of who would be the most important people you would want to come to this event and what would it take to get them there. Plan that event. Come up with a party concept that would communicate what you are up to. More...

Spa Start-Up Challenges

The key risks of a spa business are: 1. Not finding sufficient labor for your venture (highly skilled therapists down to spa attendants are in demand) 2. Running into cash flow problems 3. Not having any "demand generators" such as foot traffic or "curb appeal" as they call it; or having a nearby hotel, fitness center, or beauty salon, shopping, etc. That said, you should also look at the regional and local characteristics of your particluar spa project. Each location...

Spa Management Metrics

Return on investment in a spa depends on many factors, inlcuding: What kind of spa (day spa, resort spa, etc.) How well-managed the operation is The amount of debt service That said, a typical rule of thumb is that the more the spent on the build-out, the longer the amount of time before break-even is reached. So a small day spa may take a year to stabilize, whereas a large resort spa may take 3+ years. A healthy return in...

Hydrotherapy Challenges

Whirlpools for public bathing and whirlpool baths for individual bathing carry with them many health and safety risks. The main problemn with public bathing is chlorine and bromine are not ideal elements to bathe in. State regulations usually require X amount of chlorine and bromine per number of bodies. (A better method would be measuring PH levels.) Whirlpool bathtubs carry with them the greatest risk. Bacteria get trapped in the piped systems, then shoots into the tub when you turn...

Higher Education

As the spa industry grows, more resources are being devoted to creating programs that prepare professionals with the skills necessary to thrive in a spa environment.
If you find good help is hard to come by, you can look forward to relief: It's certain to become less of a challenge as more spa professionals begin to take advantage of the advanced educational opportunities available and progress is made in establishing a set of skill standards for the industry. Until recently, spa management programs designed for owners, directors, and other managerial positions have been in short supply. Today, that is slowly changing as industry professionals recognize the...

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