Spa Business Functions to Assess


To improve your business, you must measure and assess performance. Conducting a business assessment is essential on a monthly and annual basis.  Keep reading to discover the most important reports and business functions you must assess on a regular basis in order to grow your spa business.

1. Your product cost
Request a cost per treatment analysis from your vendors and make sure you are pricing your treatments properly.

2. Your operating cost
From your P&L statement, you can manage your operating cost. Make sure you have a comprehensive chart of accounts to help you interpret all of your expenses. If you don’t have a budget, get your budget now so you will have a clear expense outline to help you manage your cash flow.

3. Your compensation cost
Implement a performance-based compensation model to help you maximize your revenue per guest and gain control over your compensation cost.

4. Your overall financial ratios
Balance your financial ratios. Make sure you have at least a double-digit profit line.

5. Your guest experience & menu
Run spa business reports to learn about the most popular and least popular treatments. Replace the least popular ones with new options. Assess your spa menu design and copy, as well as your concept and positioning. Revisit all your rituals, protocols, and overall guest experience.

6. Your spa facility
Your spa is an important part of the guest experience.  Assess cleanliness, flow, organization, scent,  lighting, etc. It must be warm and inviting.

7. Your spa team image and skills
Your team image and skills can make or break your spa. Your team’s performance is a direct reflection on retention.

8. Your training efforts, training manuals
Team training is essential to your success. Having spa training manuals makes your life easier and provides you with consistency, accuracy, and growth.

9. Your spa marketing efforts
You need to know the cost of new client acquisition and campaign effectiveness. Knowing your return on investment is very important.

10. Your online presence
Your spa website is where your potential clients are most likely to find you first. How effective is your website? Your website needs to generate leads, increase spa revenue, and engage your visitors.

11. Your reputation
Online review management assessment. How many stars do you have on Yelp and other review sites? Social proof can help you build your business.

12. Your guest retention
How good is your retention? Track your retention rate. If it’s not what it should be, you should look at your guest experience, your team’s skills, and your protocols.

13. Your products—professional and retail
Measure how effective your products are for both treatments and retail.

14. Your VPG – Volume per guest averages
Assess your upgrade and enhancement menu. Make sure your spa team is upgrading and selling retail products

15. Your P&L Statement
Look at your P&L statement and check out your ratios. Make sure you have a healthy spa business.

16. Your spa reception department
Your reception department is a key department within your organization. It must be focused on generating revenue.

17. Your spa boutique merchandising and retail mix
Assess your retail sales. Run reports to learn about the most successful products and the least desirable products. Calculate your profit per square foot and your turnover rate.

18. Your spa culture
Company culture is key to attracting and hiring the ideal team. Your culture will attract professionals who will help you grow. Assess your culture and learn how your team feels about your organization

19. Your spa concept
Assess your fulfillment offering to your target market. Do you need to introduce new treatments and tap into new revenue streams to help you earn more and be more profitable?

20. Employee retention
Do you have a revolving door? Remember, people don’t quit jobs. They quit managers. Hiring new people is very costly. Calculate your employee retention rate and see how you can improve it.

21. Your leadership skills
This is most important. Are you an effective leader? The more you invest in your education, the better off your organization will be. Join a high-level coaching group or a mastermind group.
These types of programs always separate the average from the excellent.

22. Your structure
Your organizational structure should be part of your growth plan. Chart a career path for your team so they can be motivated and grow with your company.

23. Your growth plan
This is the biggest must. People don’t plan to fail. They fail to plan. Annually, you need to revisit your spa’s strategic growth plan to make sure you are on course.

Need help assessing your spa business for the New Year?  Call us at 386-226-2550 and we will be happy to assist you!


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