5 Lessons Spas learn too Late



Lesson #1: Finances

A beautiful spa without spreadsheets, is like a sports car without wheels...

Misconception: "I'm not good at finances."

Lesson: It's your fear, not your ability that's preventing you from knowing the truth.

Benefit: You'll enjoy a bright financial future when you begin basing decisions on truths.

It should be assumed that a spa owner/manager understands revenue vs. expenses, but I know that's a bad assumption. The process of familiarizing yourself with the numbers is actually fun and definitely power-giving. Here are just a few points to consider:

  • Examining service costs to arrive at gross margins tells you which ones deserve the spotlight
  • Projecting staff costs based not just on fixed and variable wages, but also benefits, discounts, retail commish, tips, workers comp, CPP, stat and holiday pay, retention programs, etc. will shed a very bright red flashing light, right into your cornea
  • Analysing what payback of capital items looks like, including dollar charged and number of treatments needed each month to break even on that new laser machine, is nothing short of a brilliant idea
  • Tracking results with standard spa metrics such as sales per square foot, room utilization and average ticket, tells NO lies
  • Controlling line items as a percentage of sales, means you might get paid this year.

A financial plan is like having a coloring book in front of you. The guiding lines are there, you just have to color in the picture.

Lesson #2: Marketing

Even a little spa without a plan, is like a sailor without a compass...

Misconception: "I know what works because I've been a spa-goer for years".

Lesson: The spa goer only sees the results of what the spa owner has worked around the clock to achieve.

Benefit: You'll enjoy less waste, because your marketing plan tells you when to say "yes" and when to say "no".

Market research is not based on all those years you've been visiting spas. It does not tell you who your clients are, what they want, or how much they'll spend on getting it. But let's say you've pulled together your financial plan and you now know what your marketing budget is. Now you can target your actions to uncover that data:

  • Break down your costs and margins for services, products, promotions, training and support systems
  • Resign yourself to perpetual research, including: Primary (stuff you research yourself); and secondary (stuff you obtain from outside sources)
  • With that research, create a revolving 1 year marketing plan and set goals and strategies based on your studies
  • Save on some of the spending, by understanding how to get free publicity
  • Uphold your brand with diligence, repetitive messages and never deviate from it.

When you do your job, you've simplified your staffs' jobs and your clients decisions.

Lesson #3: Staffing

A job without a career, is like stream without a river...

Misconception: "Our staff will stay with us because it's a fun place to work and pays well".

Lesson: Developing careers, develops yours.

Benefit: You'll enjoy a (positive) bottom line, and you'll have a life too.

Master your leadership skills first, and do whatever it takes to get there. Your compelling, superior people skills will be the sole reason your staff will be enthused to perform. Then you can tackle these steps:

  • Know what your vision, mission, philosophy and core values are, and then communicate them to your staff. Staff who feel the fit and know their role in the business, are much more likely to become avid, active participants in its success
  •  Develop your staff Value Packed Proposal PRIOR to recruitment, including training, compensation, incentives, and all-in retention programming strategies
  • Recognize that frontline admin staff often deserve more than they get. Set up a business model that positions them just under management in the reporting line, and then treat them that way. Give them pride in position so you can grow your business from the front desk, concierge and call centres
  • Create clarity and dispel misunderstandings, with staff contracts. This is a solid business decision and will foster security in every aspect of business. Consider everything from Offer to Employ Promises, to Job Descriptions, Appraisal and Dismissal systems, to Non-Compete and Confidentiality Agreements.

You must be viewed as a proactive leader, not a reactive learner.

Lesson #4: Customer Service

A spa without systems, is like a beehive without the bees...

Misconception: "We'll only hire staff who know how to treat people well".

Lesson: Customer service excellence is not intuitive, it's a system.

Benefit:You'll enjoy increased revenues because of more referrals, more frequent visits and higher monetary values.

A gorgeous spa doesn't draw in clients, your marketing plan does. And surroundings certainly don't keep them coming back, your superior guest handling does.

  • Client #1: Your Staff. Behavioural codes of conduct, guiding rules for service and quality controls, tiers for corrective action and customer compensation solutions all need to be in place for both closed and open door environments, for all staff, including service providers to spa attendants. Clarity is your key to success
  • Client #2: Your Customer. Take full advantage of your software program. Input information from all client intake forms; client surveys and business details such as most recent visit, frequency of visits, monetary value of each visit, average spend and spend to date. At a glance client profiling allows you to rank your clients and target potential so that you can increase spend, get more referrals, and develop life-long clients.

Building your client profiles should be a top tier priority, because this information becomes the foundation for strong business/client relationships.

Lesson #5: Operations

A spa without consistency, is like a church without a religion...

Misconception: "Once we get this place decorated and looking gorgeous, we'll figure out our plans. Oh darn, we open tomorrow."

Lesson: Pretty on the outside can be very ugly on the inside. Organize your business beliefs and subsequent strategies, first.

Benefit: You'll enjoy business building immediacy. On Day 1 you'll be ready to advance, not relapse.

SOP (Standard Operating Procedures) and your Staff Handbook, should have been developed before you actually needed them!


Operationally, there are critical challenges that you must be prepared for, particularly encompassing those topics listed above. But as the Owner/Manager, you also need to set up your own system of behavioral responses on how you will handle everything from daily routines, to interruptions and emergencies, as well as the growing list of tasks that will spontaneously reproduce right in front of your eyes. Most importantly, knowing how to interpret and produce daily, weekly and monthly reporting data, will be a primary indicator of your abilities to manage.

Infection Control guidelines, problem prevention and emergency preparedness, supplier expectations, technological usage and guidelines, staff and customer management, are all key competencies for a spa owner.

It's really never too early, or too late... you just need to pick your timing and ideally, you'll pick it early!