Spa Business Articles

Membership and VIP programs

Many day spas have implemented spa membership programs to cultivate the high-end market and reward their best clients. The focus is on encouraging loyalty and increasing spending on products and services. VIP perks include designated toll-free hotline, separate check-in and check-out, free valet parking, free products, free spa treatment on clients' birthday. Day spas offering membership programs report an enhanced ability to track client spending habits, increased revenue per client, and positive word-of-mouth advertising. Membership and frequent-buyer programs keep clients...

10 Tips to Handling Gratuities

All spa staff should particpate in gratuities at some level Don't put gratuities on a credit card if you can get away with it. Some spas do and build the fees into their expenses. Don't discount groups, give them a value-add (product gift, etc.) 20% gratuity and service fee built-in Staff gets 15%, 5% handling fee 15-20% standard gratuity Commissions for support staff Front desk should get a percentage of retail sales Never let staff discuss tips in front of...

10 Strategies to Improve Communications with Spa Staff

Staff memo in paycheck Dry erase boards in strategic areas Check list to read something, check it off after you have read it Create an incentive for them to read memos Put kudos in memos—make them entertaining and short (1 page) Cubby hole mailboxes like in schools Quarterly breakfast meetings Always end meetings on a positive note Massage and facials staff have meetings every other month Pay hourly wage for meeting time (must do by law in some states)

How to Increase Retail Sales

Retail is an enormous point of leverage for both sales and profits. Unfortunately, many spa therapists avoid "closing" a sale because they fear damaging the existing relationship with the client. A lot of times selling is an afterthought rather than a routine part of the job. A great way to increase retail sales is by providing education and support on all levels. The use of scripting and coaching can overcome the fears that inhibit peoples' confidence in selling. Strategies for...

How to Avoid Compensation Mistakes in Your Spa

1.Energize employees by getting them excited about their work, build team spirit, and provide a friendly working environment. Hire people with commitment (avoid part time when possible). 2.Consider a trial period before hiring full-time to avoid costly mistakes 3.Limit the use of Independent contractors. They are a liability because they cannot be managed or trained. Employ them primarily for ancillary services like laser hair removal, nutritional consultations, etc. 4.Define basic job responsibilities--Compensation is not only treatment-based, it is based on...

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...

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