Making the Initial Plan For Your Day Spa
Mar 27, 2012 Open a Day Spa
Your initial plan is crucial to the success of your day spa business. There are three major components to the plan to consider beginning with your target audience. This factor will help you decide which type of spa is right for you and your clientele. You also can use the target audience and the services you choose to determine your price points.
Demographic information and market research helps you determine who to target as your customer base. The current trends may influence your potential clients or they may prefer traditional spa services. Pricing depends on the services and the economy in your region.
Pick your Target Audience
Your market research and exploration of the demographics in your region offer valuable information about your target audience. This is one of the most important aspects of your research. You can have outstanding products and services but your client base has to be interested in them for your spa business to succeed.
The demographic profile is all-important in your research. This information determines which services you are going to choose. Your hours of operation depend heavily on the availability of your clientele. If your spa is located in an area that has a high population of working moms, your hours of operation have to accommodate their hectic schedules in order to succeed.
Your day spa needs to accommodate the size of the potential market. You may find that a small facility that accommodates a two or three clients at a time works well for your demographic area. It is always a good idea to design your spa to feel comfortable to the visitors.
A cavernous space that is suitable for fifty people isn’t going to provide the intimate atmosphere required in many situations. The size of the size of the potential market will help determine the design of the layout. You may find that your facility requires an ample waiting area that offers a relaxing atmosphere.
Your demographics and market research can help you determine the number of potential clients that used spa services in the past. It helps to know which services they used and whether these can be included in your plan. This information is readily available if you purchase a formerly established day spa.
Some prospects have never been to a spa and you may be able to tap into this resource by introducing one or two innovative services or through a clever advertising campaign. You have to determine whether the population falls into a demographic that typically uses spa services in other regions.
Profiling the potential clients can involve examining your competition. This includes day spas that were in service and have closed their doors. What services did these establishments offer? Why are they no longer in business? Is there a demand for the same type of spa that closed its doors? What can you change to make your day spa more successful?
When you examine your competition, you can also look at day spas that are currently open in the general area. Take time to visit your competition. What would you change? What really worked? Are there services that you can offer that they don’t?
Consider the population’s general health concerns. You can cater to your potential clients by integrating services that help reduce blood pressure or assist weight loss or any number of other treatments that are healthful. Relaxation is a primary factor that can help alleviate many conditions.
Health issues are strong motivators and there are other reasons that people visit day spas to consider. Prospective clients may be motivated to reduce stress in their lives by using spa facilities. Others may be motivated to remove toxins from their bodies.
Weight loss is a very popular reason that many customers are interested in day spa treatments. This is a powerful motivator because it addresses several issues. Losing weight improves health, appearance and overall self-esteem. Different people seek treatments to address weight issues for various reasons, giving them universal appeal.
Many potential customers want to improve their appearance and you can provide the services they need. Your target audience may be entering middle age or they may be younger clients who want Hollywood-inspired treatments.
What Type of Spa is Right for You and Your Clientele?
The market analysis and demographic research helps you establish what type of spa is right for you and your clientele. You are an integral part of the mix as well. Considering that the market is very promising and many services are appealing to your potential clients, you have chosen an excellent venue.
Other entrepreneurs are well aware of this and there can be a lot of competition to consider. In order to be successful in your venture, you should consider your own personal tastes and personality when developing your plan. This is a wonderful approach to creating a unique and genuine atmosphere.
Consider creating a niche for your day spa that makes your business stand out from the others. Niches are interesting because they address a demand that is not in the mainstream. Having a specialty service that puts a new spin on a well-established idea is a great approach.
Your unique personality and style can help you create a niche for your spa business. Development involves creating a mission that is inspired by your personal vision. This vision should take current market trends and the demographics into consideration.
There are two important elements to developing your niche. You should have a purpose and you should be able to communicate this purpose to your target audience. This approach helps you stay focused in the face of distracting services and products.
For example, if your spa’s purpose is to help people create healthy lifestyles, you should cater your services and products to this end. Adding nail services, fingernail polish and accessories into mix distracts your from your primary purpose. A health day spa that offers this type of services is not in tune with your niche.
Instead, it is better to focus on your purpose by including products and services that suit your niche. The health-inspired day spa would focus on detoxification, relaxation, nutrition, and weight control. This purpose needs to be very clear to your potential clients.
Effectively communicating your purpose helps potential customers recognize your niche. Communication also helps them recognize how some of the services benefit them. You can also point out the complementary benefits as well, like health and attractiveness go hand-in-hand.
It can be very tempting try to offer every service possible in the day spa industry but this approach is not realistic or feasible. Study the demographics and the market to determine which services to offer your clientele.
Select Your Price Points
Price points can be tricky, especially when you consider all of the overhead you face when opening a day spa. A delicate balance to consider includes your expenses and the demographic information you have collected about your target service area. Setting prices too high will deter many clients and setting prices too low puts your business at risk.
The services you select should suit the demographics. This helps make setting your prices much easier. High-end day spa services are typically reserved for areas that have clientele that can afford them. Package deals are wonderful sellers that are cost effective for you to create and can help boost sales while offer value.
You can effectively create value packages of goods and services when you consider four factors: overhead, inventory, labor and profit. These elements require careful consideration and they stem out of the services that you choose based on the demographics.
Overhead costs include the cost of operation that involves your location. Common overhead costs include leases or mortgages, utilities, phone access, and similar and the like. These components are very important to the success of your company.
Your inventory should be well stocked and you need to consider how often you need to restock. Consider the purchase price of equipment as well as the cost of maintaining it. Tools are not one-time purchases, either. Make room for replacement tools and equipment if the need arises.
You will need employees who are well trained and professional. In order to attract and keep the right professionals you need to offer competitive wages. Your demographics and market analysis help you choose which skilled workers to choose and whether you will need a receptionist, manager or other administrative assistants.
Figure salaries according to hourly productivity and prevailing wages in your demographic area. Don’t forget your salary when figuring employee salaries. Hourly wages are generally easier to establish and maintain than yearly salaries in the service industry.
Overhead is typically between forty and fifty percent of the inventory and labor costs. Add all of your inventory and labor costs to determine how much your overhead expense should be. For example, if you add your labor and supply costs for a year to come up with a figure of $200,000, your estimated overhead are estimated between $80,000 and $100,000.
Profit is another consideration to make in your price points. In the current industry, you can expect a profit between eleven and fifteen percent after taxes. This figure depends on how much you charge for services and how much business you attract.
Mark-ups on products and services have a great affect on your profit margin. The process of figuring your prices for products and services can be simplified by considering how much you need to make in a year and work back from there.
If you want to make $52,000 for the year, the spa needs to bring in $1,000 dollars each week to get to that figure. If the spa is open fifty hours a week, it has to make $20 an hour to reach the $1,000 per week goal.
Now that you have an hourly rate, you can figure in your profit margin. The average profit margin is between eleven and fifteen percent. If you want to make a thirteen percent profit margin, the salon needs to make an additional $2.60 cents per hour, making the hourly rate $22.60. The extra $2.60 an hour translates into a profit margin of $6,760 by the end of the year.
This is a very simplistic outline but it gives you a general idea of how setting price points work. Setting the prices in your establishment takes some consideration and every faction counts.