Whenever a client calls me for the first time and tells me that he/she is looking at setting up a Spa, the first questions I usually get asked are “How does one set up a spa?”, “What is the approximate investment required for a spa set up?”, “What is the ideal size of a Spa?” among others. Here, I note the A TO Z of setting up a spa.
What Type of Spa?
First, it has to be decided as to what kind of Spa you are looking at setting up. There are various types of Spas namely,
– Day Spa
– Resort Spa
– Hotel Spa
– Destination Spa
– Club Spa
Once you decide on a type, it is important to finalize the business plan.
Business Plan
In a business plan, it is imperative to consider the following points.
Start up Capital:
- How much Investment will be required to set up the Spa? This should ideally include everything, like interior design costs, architectural costs, equipment costs, first lot of products and consumable costs, various consultants costs, registration and licensing costs, travel costs, launch costs, pre-launch marketing costs, rental deposits, rents during set up time, etc..
- It should also include 3 to 6 months of working capital in these costs.
Operating Expenses:
- These include every small expenses required to be done on a monthly basis to run/ operate this Spa.
Projected Revenues:
- How much revenue would the Spa generate from every service being performed in the Spa.
Marketing Strategy
- Clear Marketing plan with budgets and execution plan
Business Outline
- Overall Business plan and expansion plans
What is critical here is to see that the business plan is showing a minimum of 35% return on investment. If it is not showing these returns, then you need to go back to the drawing board and look into the plan in more detail.
Concept
After you have done the business plan, it is necessary to decide the concept, which is will be the theme of the Spa. The concept defines the central theme or philosophy around which the product is going to be developed and designed. Once the concept is finalized, it is necessary that this concept flows into everything that you do in your Spa, including the interiors, architecture, services, products, experiences, journeys, etc.
Location
Once the Concept is finalized, it’s time to look for the right location. It can be in a mall, standalone, or a shop. It is important to consider a few facts before deciding upon the location. Consider the amount of rentals you have to pay for that location, business potential of that location, competition around that location, what kind of positioning it will create for your product and services, parking availability, etc. It is important to understand that whilst choosing a location, try and get one which will be easily seen by your potential clients, so that you save on some marketing costs.
When you choose a location, take all the necessary permissions required from the society, apartment, residential area, local councils before starting any work, as the last thing you want is people objecting to you opening a Spa in that particular location, once you have already invested in the set up, interiors etc.
Configuration
Now it is the time to decide what would be the configuration of your Spa. Decide on your number of treatment rooms, public areas, staff areas, storage spaces, etc. It is important to decide in the configuration what is going to be the differentiator for your Spa, what uniqueness you are trying to bring into this space.
Interior Design
Interior design is very important to create a proper ambience for any Spa. It is the interior that will create the first impression of your product. But it is important to understand that whilst doing so, one must keep in mind that it has to be aesthetically beautiful, but more importantly functional. Decide the budgets and timelines for the same before starting, and stick to it come what may. Whilst designing the Spa, keep note that the client/owner and the Spa Consultant have a final say in the interiors, look and feel, materials and not your interior designer.
Services Menu
Develop a service menu, which is as per the concept and theme of the Spa. Understand your guest profile, what are they looking for, and develop your services based on the same. Also keep the possible price at which these services can be sold in your facility and keep the pricing accordingly. Also, look into developing some unique Journeys, Spa Experiences, Spa Packages, Loyalty programs, etc.
Keep your Services Menu simple and easy for the guest to understand and read through. Always choose wisely and look at a phase-wise introduction of various newer treatments at regular intervals once you have launched, rather than having everything in one go and then having a stagnant menu for the next year or more.
Try and also keep the Services menu evolving as per seasonal changes, festivals, and special occasions like marriages, etc.
Sourcing Equipment’s
Prepare a list of equipments you need to buy based on your Spa configuration. Buy your equipments in accordance with it. Whilst buying, always keep a track on pricing and the value that equipment brings to your guests and the overall Spa experience. Understand the overall functionality of the equipment and multiple uses that you can achieve by placing them in your Spa. Also study the guest profile, location profile etc., before selecting the equipments. When buying any expensive equipment or gadget, always understand the ‘Return on Investment’ from that equipment keeping in mind the approximate time by which the said technology may get out-dated.
Sourcing Products
Again, whilst selecting products, keep them in sync with the theme of your Spa. Keep a track on your allocated budgets for the products and minimum quantity that you would need to stock. Also understand per treatment costs of the product whilst deciding the product line and see that it does not affect your bottom line. Consider the after sales service, training and marketing and branding support the product line is offering to your Spa. Exclusivity can also be an important point of consideration.
Do not stock your products excessively. Product companies may try to oversell, but always go back to your projections in your business plan to decide your quantities you need to buy.
Recruitment
When it’s time to start recruiting your Spa staff, prepare an organization chart. Decide on the skill sets you are looking for. Prepare a proper HR policy in terms of benefits and perks being offered to the staff. Whilst selecting staff, surely look for language skills and soft skills apart from domain expertise.
Avoid recruiting staff in groups as they will join you in a group and leave you in group, leaving you in severe distress. Do not poach staff from a nearby spa as you will face the same issue sometime.
Training of the Staff
Even though the staff hired may be experienced or trained in everything that you want to offer on your menu, still do not neglect training. Training is the only way you can offer a uniform and consistent quality service to your guests. This training can be for the various therapies, products used, Standard Operating procedures or treatment protocols, language skills or even soft skills; but it is utmost important and never to be neglected.
Marketing and Branding
For most people, branding means logo designing and creating signage. But branding is much more than that. Use of a proper branding agency can help you save a lot of marketing expenses. Marketing of the Spa is very vital for your potential guests, to know about you, about your services, your products, and your USP. This will attract these potential guests to come and visit your Spa. Once they come to your Spa, then starts the activity of ‘Selling’. Remember ‘Marketing’ is not ‘Selling’.
Conclusion
Once you have done all this, you Spa is ready…now plan a proper launch. You can launch your Spa with a big bang or do a soft launch, take care of the teething problems and once you are all set, then launch with a big bang. A launch can be a very expensive affair and hence be wise in deciding how you want to launch your Spa. Do not spend all your marketing budgets in the launch, because you need to be seen, heard constantly and not just once after the launch, because public memory is very short. You need to do some regular activities and be seen and noticed by your potential guests to be successful.
Dr. Manish Patwardhan is the president of the Indian Spa and Wellness Association (ISWA) and the Founder, CEO of Spa Consultants, Urban Nirvana Wellness Corporation LLP. You can get in touch with him on [email protected] or check out www.spaconsultants.in
Tags: Setting up a spa
