Things to Consider While Creating the Perfect Spa Business Plan
Creating a new spa or maintaining an already existing one and making it flourish is a difficult sea to navigate. There are a plethora of things to consider and if you don’t have any prior experience you might need some help along the way. Regardless if you’re creating a new spa, or trying to maximize the profitability of your already existing spa, the first step is always to write a spa business plan.
But what is a spa business plan? What does a spa business plan look like? And what do you need to consider when you write a business plan for a spa? That’s what we know, and for you to find out.
In this article, we will guide you through the process of writing a spa business plan. We will teach you the following:
- What’s included in a spa business plan
- How you go about creating a spa business plan
- What an operational plan is, and how to write it
- What a marketing plan is, and how to write it
- What a recruitment plan is, and how to write it
- What a finance plan is, and how to write it
- What the SMART formula is for deciding on spa business goals
What is a Spa Business Plan?
A spa business plan is all about how to lead the spa to success – maximizing profitability by finding out where you are at right now, where you are going, and how to get there. No matter if it is a new spa or an already operating spa, a business plan is vital for the success of your spa.
A good spa business plan should include the following:
- Executive Summary – a snapshot of your spa
- Spa Description
- Vision & Mission statement
- Corporate Values
- Business objectives & Goals
- Market Analysis
- HCM Plan (Human Capital Management)
- Key strategies
- Strategic Action programs
- Profit & Loss
Points to consider while creating a spa business plan
When creating a spa business plan, your first action will be to define what kind of business you want to create, or what kind spa business you are. This is the most important step of your spa business plan as everything that comes after will be based on what you’ve come up with. So when you write your spa business plan, don’t rush. Sit down, preferably with your business partners, and take your time writing and rewriting your spa business plan over and over again until you and everyone else is satisfied with it.
When writing your spa business plan, the following will need to be included.
Simply put: What type of spa are you?
- Type of spa: Day spa, resort spa, destination spa, beauty salon
- Type of spa services: Oriental, thalassotherapy, beauty, healing
What type of spa, and the types of services you offer will set the tone for the rest of the spa business plan and concretize the direction of it.
Define target market
Just as important as it is defining yourself, is defining your customers in your spa business plan. Check your target market and its segments: segments vary according to geographic location, demographics, and psychographics. What are your customer satisfaction goals?:
- Who are your customers and what makes them satisfied?
- What are the keys to success?
Next step when you write a spa business plan is defining the location of your spa. You need to know the in’s and out’s of your spa and what kind of possibilities there are available to you. A big part of this can be extracted from where your spa is located:
- Where is your spa located, or where will it be located?
- Is your spa a city spa, is it a resort spa, or is it a hotel spa in a tourist location?
- Is your spa on an island, mainland, near an airport?
- How is the access to your spa?
- Is it a highly-populated area or is it a remote location?
Creation of Sub-plans
A spa business plan can be divided into several different smaller components, or as we call them: Sub-plans.
As much as staff are key to success, there is also a saying: ‘people go, systems stay’.
The three main weapons we have to achieve consistency in operations are:
- Standard Operational Procedures:
Εvery business needs to have policies, SOPs, checklists. Do not underestimate the importance of having these in place.
Once you have SOPs in place you will then have something to train towards. You will need to work very hard with each of your therapists to get each service delivered in a similar manner. We write “somewhat similar” as we at Raison d’Etre do not believe in therapists being robots; when we train spa staff we give them a framework to work within, and room for individualizing the treatment, yet making sure that 75% of each treatment is always the same. This is an issue you have to decide how you want to handle if you want to have 100% of the strokes the same or 75%, and it goes hand in hand with the country and what nationality therapists you have.
- Evaluating & Testing
Never let a therapist perform one of your treatments until they have been evaluated and are performing the treatment per procedure. Further testing to ensure consistency can be done by “mystery shopping” the spa. Hire a mystery shopping firm or get friends/relatives to periodically have treatments. Consistency is essential to building an overall business, a reputation, and delivering a “quality” service to your clients. When consistency is achieved, excellence is closely within reach.
After you have completed your market research and you have defined your concept, a marketing plan must be created to meet clear objectives, like market share, sales, goals, reaching the target audience and creating awareness in the marketplace.
What are the marketing objectives? A company’s marketing objectives include:
- Increasing product awareness among targeted consumers
- Providing information about product features and
- Reducing consumer resistance to buying the product
Also, your marketing plan and budget will be different if you are in the opening phase of a spa or if it is an operating spa. You need to look at both internal and external marketing and a solid marketing action plan with actions and relevant goals broken down monthly.
It is crucial to get the right people on board and then keeping them. It is of good value to spend time and energy on planning what kind of team would be a successful mix and then investing in the recruitment process. To start with, there are several questions you need to ask yourself before embarking on the practical part of hiring team members for the spa:
- What kind of team do you need/want/have in mind?
- What kind of personalities and strengths are needed in order to create the team that you want?
- What does your clientele look like?
When hiring you need to create a versatile team of individuals who’s able to handle whatever’s thrown at them. Following factors need to be considered:
- Gender: While it may seem somewhat controversial that you should hire someone based on their gender in this day and age, the fact remains that the spa business is an intimate industry, and some individuals simply prefer and feel more comfortable with either their own gender or the opposite. Therefore it’s always a good idea to hire a good mix of both genders to assure you can satisfy your customer’s needs and wishes.
- Age: Similar to gender, some individuals just prefer and feel more comfortable with someone of their own age, older or younger.
- Earlier experiences: Prior experience is almost always a big plus. While a completely new job, in a new spa, with new coworkers, and new services means new prerequisites, an individual with some earlier experience within a spa will be able to learn the ropes much quicker than a person without any prior experience.
- Specific skills: While being a: “Jack of all trades, master of none”, is admirable in its own way, having several staff members with specific skills and expert knowledge will allow you to offer services of the highest quality.
- Specific personal qualities: Every individual on planet earth is unique. We all prefer different things in regards to food, drinks, entertainment and also: what type of person we get along with. We’ve all heard the proverb: “Birds of a feather flock together”, and in most cases it’s true. As with gender and age, it’s always recommended to try and create a team with a variety of different personalities so you always have a suitable staff member for whatever type of customer walks through your front door.
Here are a few examples of how you should think when hiring additional staff:
- If the reception team is very service minded and caring for the guest, but not succeeding in retail sales, your next receptionist should be someone who loves sales and can inspire the rest of the team and you should not hire someone who might be a caring and great service-minded receptionist, which is easy to do.
- Likewise, if your therapist team is in the plateau phase, your next therapist recruitment should be someone that can put some energy into the team, a real personality that can “rock the boat”.
By finance plan, we mean the creation of a budget. This can take different forms depending on the state of the spa. Is it a spa that is going to open, is it an operating spa? If it is a new spa to be opened, you have different types of budget, as an opening budget, a 1st-year budget or a 5-year budget, so you can plan ahead.
If your spa is in operation, you need to have a P&L (Profit & Loss) budget so you can track the way things are going for you. This will include 3 sheets:
In this document, you calculate your estimated revenue from
-> total guests taking treatments/day
-> total treatments/day
-> price per treatments
-> total treatment revenue/month
In this document, you calculate what your payroll costs will be from
-> estimated treatments/day
-> number of staff needed
-> salaries per staff
-> total payroll cost/month
- P&L (Profit and Loss):
In this sheet, you calculate your profit/ loss from your revenue minus your costs. All figures already calculated in Revenue and Payroll will automatically show in this document, you only need to set what you believe your additional costs will be (the yellow fields in percentage.)
Goals in a spa business plan can be both qualitative and quantitative and are a necessary component to drive company development. The most known and used formula when setting goals today in most businesses is the SMART formula described below:
- S – Specific: they have to be specific and not very general, like ‘we need to improve our customer service’. How, by doing what, in which areas of the spa, etc….
- M – Measurable: as they say, ‘if they are not measurable, they are not goals, they are wishes!’. An example would be: increase our sales. By how much? The goal should be phrased such as ‘increase our sales this year by 20%’. Then they can also be evaluated.
- A – Acceptable; they need to be communicated to your staff, agreed upon, so that there is a common effort to be achieved.
- R – Realistic: they need to be realistic or they won’t be met, and we will be disappointed. If you set a goal like ‘increase revenue by 200%” then you are set for failure.
- T – Timebound: your need to set a time limit, within which they have to be achieved. ‘Train all staff in product sales within the following month”.
Need help creating your spa business plan?
Contact Raison d’Etre today and either enrol in one of our spa management course or get assistance directly via our spa consulting services in creating a spa business plan according to your needs.