Pre-opening costs in the development of a spa facility are of two types, hard costs and soft costs. Many times a lending institution will ask a spa developer to differentiate between hard and soft costs, and a different type of loan for each category may be arranged. With either type of expense, the key to managing your pre-opening costs is to set clear, specific, measurable goals and stick to them!
Hard costs usually include construction costs plus the prices of FF&E (furnishings, fixtures and equipment). The hard costs of a spa development are usually the big ticket items when it comes to the pre-opening expenses.
Soft costs include labor and items such as architectural and design fees, professional services, start-up supplies, printed materials and marketing costs. Soft costs include all of the many various pre-opening expenses that could be incurred in the development of a spa facility prior to the actual opening and operation of the spa. These too, vary greatly depending on the size, caliber and inclination of the spa.
Because soft costs are less tangible than hard costs, they can easily get out of control in the pre-opening stage of spa development, unless they are well thought out and accounted for in advance. Many spa projects have gone over budget because the soft costs were simply not thought of prior to the operations of the spa.
One of the primary soft costs attributed to pre-opening is marketing expense. A you know by now, marketing a spa starts upon the inception of the concepts and must be carried though in all the years of operation.
Pre-opening Costs to Consider:
Boutique/retail Cost of Sales
Computer (IT, MIS)
Flowers and Decorations
Licenses and Permits
Printing and Stationary
Real Estate/ Pers. Prop. Tax
Travel and Transportation