Spa Startup 101 – The Real Business of Spa

1 Spa Startup 101 The real Business of Spa Presented by Lisa M. Starr Wynne Business Why Spa Services? z Technician financing a job for yourself? { I can do this better than my current boss.. z Corporate Dropout? { The spa world must be so relaxing .. z Long-term exit strategy? { When I retire I'll run my spa.. z You'd like to have a little more drama in your life? Spa Market z 57 million US Adults have been to a spa z 46% of consumers would choose appearance enhancement over an expensive vacation or luxury vehicle z 45 million consumers visited a day spa or resort spa in the last year zCurrently 12K+ day spas in the US. What's a spa today anyway? What's a spa today anyway? What You Need zA planning process zSolid financial projections zMoney zRealistic expectations zThe ability to multi- task Identify Target Market zWho are your target clients?}}}

2 {Socio-economic status {Ethnicity {Age zWhere do they live, work? zWhat services will they be interested in? Define your Vision zExpansion or New zResults or experience oriented zTreatment philosophy zBranding opportunities Examine financial realities zProject cost analysis {Getting facility open will cost at least $200/sq ft {You also need 6-9 months of operating capital zNew construction or existing building z2000 sq ft spa = approx $475K. zBank will want you to contribute 20-30%. zProfits , when achieved, will typically range from 0-15%. Financial Projections z Revenue-producing areas {Treatment rooms {Salon Departments {Cosmetics, Waxing, Medical services {Retail Area z Non-revenue producing areas {Lounges, locker rooms {Check-in/Check-out {Employee areas {Storage {Hallways, utilities, laundry Size matters!}}}}}}}}}}}}}}

3 Z How big does it need to be? z How big can you afford it to be? z Start small and grow later z Bigger is not necessarily better Project Logistics z Site Selection z Development Team { General Contractor, Architect, Consultants, Designers z Licensing &. Regulations z Development Timeline Creating the Spa Personality zFacility location zAmbiance zFloor plan zDesign & d cor zRoom Layout zAmenities What services is your target market seeking? zSkincare zNails zMakeup zMeditation/Mind zBody Treatments zClasses/Lectures zHydrotherapies zEastern modalities zWaxing zFitness zMassage zGroup Events Service Analysis zMost Popular zMost Profitable { Facials and Makeup = retail sales { Massage = low cost of service delivery Service Menu zBasic Services zService Packages or Groups zServices for Men & Women zSignature Services zSeasonal and Special Offerings zUpselling Opportunities zTie-ins to theme or branding Choosing product vendors zSimilar Philosophy zSupport & Training assistance zCost per treatment analysis zEducation zRetailing synergies/Price points zPackaging Building a Brand Identity zMission & Vision Statements zLogo & graphics zFacility color scheme and design zStaff Uniforms zService Menu.}}}

4 Brochures & Collateral Materials Building a Brand Identity - cont'd zPrivate Label Products zSignature Services zWeb Site zSpoken cues & scripting zTraining, training, training Assembling a Team zManagement Team { Someone in management should have spa or salon experience { But not necessarily everyone! zCustomer Service Staff { Other client-facing industries an excellent resource hotels, restaurants, retail zSpa Service Providers { Care and feeding { Employees vs Your Compensation Plan z Labor is your single biggest expense zTraditional approach commission z Modern approach treatment rates, hourly +, team-based, benefits z Know what your competition is doing z Total payroll = < 60% of total revenue z Get it right the first time! The Human Resource Component z Creating underlying structure { Org Charts { Position descriptions { Staff Handbook { Operations manuals { Orientation & Training programs { Ongoing communication plan Continuous Evolution zMake continual facility updates zChange artwork zRemerchandising/Floor moves zSeasonal menu additions zExamine what works, eliminate what doesn't Current Trends z Indigenous ingredients & treatments z New target markets men, teens.}}}}}}}}}}}

5 Z Fusion treatments z Social Spa-ing z Green Spas z Medical z Don't forget the stress relief Future Growth Opportunities zClinical Esthetic Services zMedical Esthetic Services zPreventive Health zLifestyle Management and Wellness zFitness zEvent Venue Barriers to Success z Initial Undercapitalization z Not understanding your niche, or not having a niche at all z Thinking it will run itself . z Not investing in education & training z The wrong compensation plan z Lack of qualified management Care and Feeding z Foster team-building z Provide visionary leadership z Pay attention to quality assurance z Value learning z Compensate the behaviors you want z Make it fun and fulfilling z Expect more competition it's coming Spa Startup 101. Thank you for your attention! Q & A with Lisa M.

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