Expanding on the next two of eight myths we recently discussed:
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.
Location is a no-brainer for some businesses. One fast food restaurant can be found next to another fast food restaurant. A gas station is very likely across the street from another gas station. And a pharmacy or small grocery store is generally close to one of its competitors.
Location for a day spa or a medical spa, on the other hand, isn’t as easy.
What’s your target market? Once you’ve established that, you can narrow down possible locations.
You want to make your spa competitive and profitable, so market research to determine your menu costs is just as important. Don’t just go in blindly. Do some research and don’t assume you can use your locked-in prices for any market.
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Myth Four: I Have Enough Money
4. Investment & Funding
Though you are excited and you have a positive outlook, account for opening delays, budget deficit 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.
When it comes to businesses, especially smaller businesses, no one ever has enough money. There’s always that bottom line of what the company head or small-business owner boss considers profit after investments and expenses are determined.
Developing a spa is costly. It’s best to be prepared for the worst and to expect the unexpected. That way, when you’re hit with a surprise, you’re ready to tackle it head on before it has a chance to escalate into an even bigger problem.
Be smart, be realistic and be reasonable when it comes to the almighty dollar. Every cent counts, so it must make sense.