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Start Your Own Day Spa All wound up about what kind of business to start? Then take a hint from the millions of Americans looking to break away from the daily grind--head to a day spa.

By Eileen Figure Sandlin

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

With all the attention focused these days on holistic remedies,organic produce and botanical beauty products, it's no surprisethat interest in spa treatments is on the rise. Everyone fromharried executives to soccer moms-and baby boomers in particular-iseager to try anything that keeps them looking younger and feelingbetter. That makes this the perfect time to take the plunge intoone of the hottest personal-service businesses around: the dayspa.

Day spas offer the same beauty and wellness services as pricierdestination spas and resorts but don't require the same timecommitment. According to the ISPA 2002 Spa Industry Studyfrom the International SPA Association (ISPA), there were nearly156 million spa visits in the United States in 2001, 68 percent ofwhich were made to day spas. Revenues for the U.S. spa industrywere nearly $11 billion in 2001, up from $5 billion two yearsearlier. Yet this spending occurred at fewer than 10,000 spalocations nationwide-75 percent of which are day spas-meaning themarket is open for new spa owners.

Spa Basics

There are two kinds of day spas. Standard day spas offer bodytreatments and lifestyle services. Medical spas offer traditionalspa services as well as services that must be provided by alicensed medical practitioner, such as acupuncture ormicrodermabrasion. Although conventional wisdom holds that true dayspas must offer hydrotherapies like Scotch hose treatments orunderwater massage, many day spas do well with "dry"services alone.

"Not all clients are comfortable with water therapy,"says Hannelore R. Leavy, founder and executive director of The DaySpa Association in Union City, New Jersey. "Americans are shyabout taking off their clothes and standing naked in front of astranger who will perform unfamiliar therapies on them. It'sbetter to open your spa without water therapy, especially if yourfunds are limited. But you can put it into your business plan soyou're ready to expand when and if your clients are ready forit."

Dennis Gullo, 47, used an easy formula for determining whichservices to offer in his spa. "I started with [commonly known]services, like massages," he says. "I didn't want tospend energy trying to sell services no one's heard of."The formula's worked: The spa portion of Gullo's MomentsSalon & Day Spa in Mount Laurel, New Jersey, generated 44percent of the business' total sales of $1.8 million in2003.

Laying the Groundwork

Finding out what your prospective clients are ready for is animportant part of the planning for your new venture. Case in point:ISPA's 2001 Day Spa Usage Survey indicates that two ofthe top five reasons people don't visit a day spa are that theythink spas are too costly, and they feel they're not the"spa type." So study the demographics of your targetmarket to see whether, say, the residents of a farming community inthe heart of Nebraska are the type who will be interested inpedicures. The fact is, you're more likely to attract clienteleif the market area is populated with white-collar professionalsunder age 45 who have college degrees, according to the survey.

"You also have to educate people about your services sothey don't think of them as a luxury," Gullo says."People feel guilty about pampering themselves, so instead, weposition ourselves as providers of healthy livingservices."

Armed with demographic analysis, you can write your businessplan. This plan serves as a road map for charting your course andas an invaluable tool for showing a banker how savvy you are aboutthe realities of running a business. Your plan should include adescription of your business and the services you'll offer;market strategies (developed with the demographic info you'vecollected); an analysis of your competition; an operations andmanagement plan; financial information, including assets andstartup capital needs; an income/expense forecast and repaymentplan; and a personnel management plan.

Services & Equipment

Also early in the planning process, you'll have to decideexactly which services to offer. Treatments typically offered inday spas include massages; facials and makeup application;electrolysis; spa manicures and pedicures; body treatments likeexfoliation, wraps and packs; aromatherapy; and hair services likecutting, styling and coloring. Hydrotherapies include hydromassage,mineral and seaweed baths, dry and moist heat, and shower massage.Many spas also offer healing therapies such as Reiki (a form of"energy healing") and acupressure, which must beperformed by a licensed practitioner, depending on which stateyou're in. Services are usually combined in complementary spapackages that guests enjoy for four to eight hours, but à lacarte services and pricing should also be available, both forclients who wish to mix and match their treatments, and for clientswho would like to try something new.

The range of services you plan to offer will have a majorbearing on the kind of facility you choose. Because spa equipment(like massage tables) tends to be large, you'll need enoughroom to spread out and create a relaxing atmosphere. Your bestoptions are a free-standing building, a storefront property or astrip mall store. Mall locations usually aren't optimal sincepeople go to malls to shop, not to enjoy a salt glow treatment, andthe rent is often very high.

To attract an upper-end clientele, you'll need awell-appointed facility in a good neighborhood. It should belocated near other retail businesses for good visibility, and itmust have sufficient parking. Don't underestimate theimportance of parking. Spa services are not necessities, not evenfor baby boomers bent on preserving their youth. So if it'sdifficult to visit your spa for any reason, they won't come-orthey'll go somewhere else.

Day spas require a lot of equipment to emulate the level ofservice found in resort spas. These capital expenditures will driveyour start-up costs up fast, so you're likely to need financialbacking to get the show on the road. If you find that your grandplans exceed what the bank will offer you and what your personalsavings can float, control costs by buying quality used equipmentor scaling back the number of services you offer.

The equipment typically needed for a day spa includes massagetables, manicure and pedicure stations, and reclining facialchairs. Hydrotherapy equipment may include a Scotch hose, ahydrotherapy tub, a sauna, a Swiss shower, a Vichy shower, aJacuzzi/whirlpool tub and a steam cabinet. Be prepared for stickershock: High-quality spa equipment can run from $4,000 to $25,000per item or even higher. So be sure to buy wisely. It's easy toget caught up in equipping your spa with the best ofeverything-then never using it.

"We spent $5,000 on a pedicure bed that we're using todo $8 eyebrow waxes," says Daryl Jenkins, 38. "Thinkabout how many services you'll have to do to pay for the [item]before you buy it." His company, HairXtreme Salon andSpa in Chester, Virginia, projects 2004 sales of $625,000.

Retail Therapy

In addition to all the typical office equipment, such as acopier and office supplies, you'll need to buy thefollowing:

Basic Spa Equipment

  • Stool for aestheticians: $125
  • Reception desk stool: $150
  • Pedicure ottoman: $200
  • Magnifying lamp: $300
  • Hot towel cabinet: $350
  • Pedicure cart with footbath massager: $350
  • Facial steamer: $400
  • Facial vacuum/spray machine: $400
  • Manicure table and light: $400
  • Reception-area furniture: $400 each
  • Rotary brush machine: $400
  • Retail product display unit/shelves: $600
  • Massage table: $800
  • Reception desk: $1,300
  • Facial chair: $3,500

Optional Equipment

  • Steam cabinet: $2,000
  • Vichy shower: $3,500
  • Scotch hose: $3,800
  • Jacuzzi/whirlpool tub: $4,000
  • Swiss shower: $7,000
  • Hydrotherapy tub: $15,000

Miscellaneous Supplies

  • Manicure/pedicure supplies (polish, buffers and soon)
  • Massage and essential oils
  • Massage creams and lotions
  • Towels and spa garments
  • Retail inventory (candles, oils, spa garments, healing stonesand the like)

Staffing and Advertising Your Salon

Staff Savvy

Once you have all this cool stuff in place, you'll needqualified people to use it properly. Cosmetology schools are thebest places to find personnel trained to handle the equipment andproducts found in a day spa. Gullo has a foolproof method formining the best and brightest: His staff teaches classes at thelocal cosmetology school. "That way, up-and-coming studentsknow who we are and what we offer," he says.

Many states require personal-care workers (including spa ownersthemselves) to have at least a cosmetology license; others requirepractitioners to have a certain number of hours of specializedtraining and additional licensing. Check with your state board ofcosmetology to find out about the requirements.

The staffers you'll need are: aestheticians, who domassages, facials, waxing and specialty services likehydro-therapy; massage therapists, whose services provide stressrelief and relaxation; electrologists, who remove excess body hair;and manicurists, who provide manicure and pedicure services. Otherprofessionals you may need on your team include a makeup artist, ahairstylist and a spa manager, as well as staff for the receptiondesk. Debbie Elliott, 49, of Debbie ElliottSalon and Day Spa in Portland, Maine, suggests cross-trainingemployees to handle more than one job, as well as hiring unlicensedassistants to handle tasks like escorting guests, changingtreatment wraps and mixing treatments. "That saves thelicensed people for the actual services, which improves ourproductivity and helps make the spa profitable," she says. Sheexpects her spa to bring in sales of $1.3 million in 2004.

When hiring, she recommends looking for friendly and politepeople. Says Elliott, "Personality is more important thanskill, because you can teach people what to do, but you can'tgive them a new personality."

Spreading the Word

Advertising is also crucial for a successful start-up. Becauseit's likely that some people in your market may never haveconsidered visiting a spa or are unfamiliar with the services youoffer, it's up to you to tell them about the spa's manybenefits. Besides a Yellow Pages line ad, you may find awell-placed series of ads in the local newspaper or publicationtargeting upscale readers is an effective way to introduce thepublic to your services.

Once you hook your customers, make sure you provide the bestlevel of service possible. Word-of-mouth advertising is crucial inthis business and can mean the difference between many years oftidy profits or ignominious defeat. Meanwhile, a savvy way to cashin on good word-of-mouth is by instituting a referral program,which rewards clients for referring new customers. "Everystart-up should have a referral program," says Gullo."It's a soft expense that can lead to a lot of newbusiness."

Elliott swears by gift certificates as a great source of newbusiness, which added $180,000 to her bottom line in2002."More often than not," she says, "clients firstcome to us because of a gift certificate."

Learning Curve

As a spa owner, you need to keep up on trends, both in the spaindustry and in business in general. To keep abreast of what'snew, consider joining a professional trade association likeThe DaySpa Association (201-865-2065) or the International SPAAssociation (888-651-4772). You'll also find tons ofinformation online that can help you do business better, faster andsmarter.

Gullo also recommends getting a general business education at atraditional college. "Industry-specific education is valuable,but you need to know sound business principles, too," he says."You need to have an understanding of what makes business workto make your business thrive."

Learn More

Get started on your new business with these spa-relatedresources.




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Eileen Figure Sandlin is an award-winning freelance writerand author who writes on business topics.

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