8 Myths & Advice to Avoid Costly Mistakes

You Want to Open a SPA?

While I was at a recent show, I met few new spa owners who have been in the business for one or two years. Unfortunately, they are having difficulties making ends meet and they were seeking our help to avoid closing their doors. This is extremely sad … Of course, they all envisioned building a beautiful and SUCCESSFUL business. However, some essential planning steps to insure long term success and sustainability were not addressed.

Venturing into owning and operating a spa is sometimes taken lightly. Many entrepreneurs feel that because they are successful business people in other fields or because they have an MBA, they can plan and operate their spa without spa industry experience, professional advice and/or expert assistance.

A lot goes into planning and positioning a spa for success. Here are 8 myths and some valuable advice to help you save time and money.

Myth One: Build it and they will come

1. Business Plan & Feasibility Study

Creating a detailed business plan and a feasibility study are the foundation of your spa business venture. This is where you outline your vision, business strategies, type of spa, positioning and capital investment.
The Feasibility study is the financial blueprint to your new venture. It outlines all financial aspects of your business. It should include: Initial investment by room, fixed cost, variable cost, a budget, revenue projections, return on your investment, surplus needed, and more…

Myth Two: I can do it by myself

2. Hiring a spa expert

Can you do it by yourself? Yes, but how successful and how much time will it take you? You can work hard or you can work smart… Choosing the right spa expert is crucial, especially during the pre-planning phase. Beware, there are many faux spa experts giving bad advice and collecting large sums of money. How should you select a spa expert? Ask for references, work history, past projects, skills, area of expertise and specialty. The right advisor will help you build a strong foundation for your business.

Myth Three: It looks like a good location…

3. Market research – location

You’ve heard it before, “location, location, location”… Yes, it’s everything when you’re opening a day spa or a medical spa. It’s essential to identify the target market, determine demographics and psychographics. In addition, you will also need to conduct a competitive analysis and forecast market share potential. Market research will also be useful when creating the spa menu and selecting the type of services and spa program you will offer.

Myth Four: I have enough money

4. Investment and funding

Though you are excited and you have a positive outlook, account for opening delays, budget deficits, and high expenses. Plan for it, because something unexpected usually happens. You need to have deep pockets in case outside circumstances arise that you can’t control, like a bad or slowing economy. Developing a spa is costly. Make sure you account for all initial capital investments and all expenses to clearly define your financial picture.

Myth Five: We don’t need to worry about the menu now

5. Spa concept, guest experience & menu

The guest experience or the spa program should be one of the first things you do – not the last! Determining the experience is essential for space planning (pre-construction) and guest flow. It also helps determine the type of equipment and space you will need. The menu is critical to your spa’s identity and will help define the spa’s personality and image.

Myth Six: I only need an architect

6. Planning the Spa facility space – Equipment, furniture, design

I have visited many beautiful spas designed by some of the most renowned architects. But when it comes to functionality, several simply don’t work. This is where a spa consultant’s input is very useful. They are able to work with your architect to insure that the spa is functional, beautiful and profitable. It’s not only about beauty, it’s also about functionality. The back of the house is as important as the front; but in many spas, the back of the house does not even exist!

Myth Seven: We’ll do the marketing after we’re up & running

7. Marketing plan

An annual marketing plan and marketing materials must be created a minimum of six months prior to opening date. Assigning the marketing duty to an expert could mean the difference between success and failure. Choose your marketing mix and develop a timeline to launch your marketing campaigns. Make sure your website is developed and running before your spa is open for business.

Myth Eight: I’m not worried about finding the right team

8. Recruiting and hiring the right team

Hire the spa director at least six months prior to opening. There are so many things to do in order to build the right team and to structure the organization properly. When choosing a spa location, make sure the human capital pool is within reach. You don’t want a small or limited amount of spa professionals within the region. It makes selecting and hiring people difficult.

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