Calculating Revenue Potential

The average ticket price is (the average sales run through cash register) X (the number of treatment rooms) X (the hours of operations for services) X (the number of days open per year) = Potential money generated if 100% occupancy

(Probably going to be 20-25% in the 1st year; look at 70%, 50%, 30%, and 20%)

After the maximal potential of the spa facility has been determined, the market study from Module I should provide some indication of what percentage of that maximal potential you might assume in the first few months of operation. It's usually best to take the conservative approach and start on the low end which might be as low as 20-25% occupancy (% of maximum). Then you assume a slow rate of increase which might be a 5% increase every one or two months.

Most spas "peak out" around 80% occupancy, although it's not unheard of to reach 95% in some months. (Remember that you may have a few days each month where you have 98% occupancy, those days are averaged out during your slow periods to give a more realistic view.)

Your service revenue potential is limited by the number of "bookable" hours and available technicians. No separate revenue source is included for package programs per se. Packages are developed  by combining various services at slightly reduced retail value. Therefore the sale of package programs merely help you attain your desired level of occupancy rather than provide a distinct revenue source.

Retail is a significant revenue source for spas. Up to 25% of a spas income can come from retail sales. In order to calculate the maximal retail sales possible you must establish a "baseline" sales value or and average sales amount. In most spas it ranges from $30-50. Then take an average of how many customers you serve per day and multiply the retail sales.

 


 

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