How To Craft the Perfect Spa Business Plan in 5 Simple Steps
The perfect spa business plan is key to securing a loan or attracting an investor’s attention. So much so, it is a must-have ingredient when you are planning on launching a spa business or even, reinventing your business.
But a business plan actually packs a punch when you are reflecting on your goals!
One thing that is pretty much known to any spa business owner is the importance of planning. Poor planning can cause your business to crumble, almost immediately or in the near future.
And with the global spa market expecting to grow by $22.08 billion during 2021-2025, there has never been a better time to get started!
Keeping this exact thing in mind, we’ve curated a comprehensive guide along with spa business plan templates that’ll help you craft a clear roadmap towards success. So, here’s what’s in this blog:
- Why should you NEED a business plan for your spa?
- How to get started?
- Final thoughts
Let’s get started!
Why should you NEED a business plan for your spa?
Before we jump into the nitty-gritty of building a spa business plan, let’s understand why it is important for you to have one.
Having a plan can help you determine many current as well as future aspects of your business. You can determine profitability and productivity, set future goals for your spa, be a step ahead of your competition, and do much more! In short, a business plan can help in providing a structure to your spa business.
A business plan for your spa will give you a nudge in the right direction so that you take the necessary steps to boost your business. It prepares you for all kinds of (economic) situations that may arise.
Hence, a spa business plan should be kept at the crux of your business if you aim at emerging as a successful spa.
How to get started?
We agree your spa business’s planning can get stressful, and no one likes a stressed-out spa owner (doesn’t really set the right tone now, does it?).
We’re here to help you make the business plan for your spa in just 5 simple steps to guarantee your spa’s success in the market. So what are you waiting for? Let’s dive right in!
1. Craft a mission and vision statement
A. Mission statement
Your spa’s mission statement is the value it’ll provide to its customers – the reason your spa exists.
It can be something like this:
The XYZ Spa mission is to provide its customers with the finest care in a relaxing environment, which can help them rejuvenate and leave with positively transformed self-confidence and well-being.
You get the drill!
Try to understand the unresolved problems that your customers face with the existing spas in the market. And then come up with how your spa will be addressing that problem by keeping its customers’ experience and satisfaction at the center of their business.
B. Vision statement
Next is, your spa’s vision. Ask yourself this question – ‘Where do I aim to see my business in the next 5 years?’
Setting long-term strategies can help you in defining a path that you can work towards. It can provide a body to your overall business plan.
Keep these two things in mind while crafting your spa’s vision statement:
- Your customers: They are the driving force of any business. Make sure your vision is always associated with utmost customer satisfaction and also brings the best solution to the table.
- Your business goals: Having a clear vision of your business’s future can help in terms of curating and envisioning the perfect vision statement. For instance, if you plan on expanding your business to multiple locations within 5 years, make sure you project your spa as ‘popular in the neighborhood’ from the get-go.
The combined effect of both the mission and vision statement will give the purpose of your business – its values and goals.
2. Analyze your target market
This is probably the most important step when creating an esthetician business plan – simply because this is the key that is factored in every aspect of a business.
Understand your target demographics by dividing your clients on the basis of age, ethnicity, gender, occupation, income, etc. Your services can be divided among these categories, and that can help you have a better business plan.
Analyzing your target market mainly comprises figuring out who your ideal clients are and what is the size of the local market. And to achieve this, you can do the following:
A. Conduct community research
You need to understand what your clients actually like and need. That should be what forms the core of your business. Catering to your target market’s needs and providing them exceptional experiences at the same time can help you in establishing a successful business.
Once you understand the needs/problems, figure out how your spa will fulfill the wishes of the clients. The next step is pretty much simple – start selling it! (Keep reading to know exactly how)
B. Perform a thorough research on the market trends
Keeping up with the current spa trends is just as important. Blending your services with the changing times can help the audience connect and interact with your brand better.
If your brand promises to provide top-tier services, stick to it. Familiarize yourself with the latest developments in the industry and adopt them to have a satisfied customer base.
You can start by using online platforms like Facebook, Instagram, Twitter, Reddit, and YouTube to explore any emerging trends. Joining communities, groups, discussion channels, and following popular bloggers can also help you get an idea of the matter.
Feel free to start a discussion of your own on the social media channels you are present on. This can be a good way to interact, understand, and earn some future clients 😉
C. Don’t forget to analyze your competitors
As much as understanding your target market is important, you need to stay close to your competitors’ developments as well. This can be a huge learning curve in the way you shape your business plan.
You can analyze your competitors’ marketing techniques, approach to trends, service costs, influence, etc. by following them on social media and checking out their websites.
Analyze what they do differently, what is their approach that makes them popular in any way.
Lastly, attend events organized by competitors! The benefits of this aren’t limited to just knowing what’s new in the market and what are the client demands. It can also help in networking and any future marketing collaborations.
3. Create an executive summary
The executive summary is basically an overview of your business, including the services you offer, financial forecast, your goals, target market, managing team, and competitors.
It is recommended that you figure out the rest of the factors before sitting down to write your spa’s executive summary. This is because you will have a better understanding of your business once you understand what lies at its core.
Here’s a template that can help you draft your executive summary better:
A. Overview of your spa:
- How did the spa come into existence?
- What are your short-term goals?
- Where do you envision your business to be in the next 5 years? (Your long-term goals)
- In case you have multiple locations, list them all
Pro-tip: Keep your mission and vision statements in mind when you jot down your business overview.
B. Value proposition:
- How is your business different from your competitors?
- What is your unique selling proposition?
- How do your services cater to the target market differently?
- Why should the clients choose you?
- How do your services address the existing problem and create value for your clients?
- How do you attract clients to your spa?
Set a trademark aesthetic for your spa by having a logo as well as a tagline that goes with your brand. Your branding campaign plays a crucial role in helping clients connect with your business. To create an amazing spa branding strategy, refer to our blog right away!
C. Target market:
- What are your target demographics?
- What are their top-most needs, demands, and preferences?
D. Your team:
- Who is the managing team that helps the spa achieve its desired results?
- What is each and every member responsible for?
- What is the reward structure of each staff member?
- Any future considerations with respect to hiring, etc.
- How many and who are the spas that are established in your area of operation?
- What services do they offer and also, their service costs?
- How different is their customer from yours?
Pro-tip: You can also note down the competitive edge that you have over your competitors. Those are basically your success factors.
F. Financial forecast:
- How much does your spa cost you? This includes your expenses in terms of equipment, staff payrolls, rent, electricity, etc.
- How much do you make (cash inflow) in let’s say, 6 months, and whats the profit margin during this period?
- Why does your spa need financing or funding? Is it for spa improvements, marketing, supplies, or anything else? State it along with the expected breakdown of that funding.
Lastly, make sure that you keep your spa’s executive summary short and succinct.
4. Figure out key marketing tactics
Having a well-planned marketing strategy is a necessity for any business owner. This is what will attract your set target market and increase the chances of brand referrals.
Here are some quick ways in which you can make your marketing game strong:
If you don’t have a website, you’d want to reconsider that decision. A website will help you showcase all the details about your business including the services offered by you. It can also help have a smooth customer experience.
Do you know what’s better to have alongside a functional website? A ‘Book’ button to make it easier for clients to book away any service as soon as they’d want to book one. Go ahead and generate qualified leads right from your website!
How cool does appearing on Google search results sound? As cool as it might sound, it is the best way to grab your target market’s attention towards your spa. List your business on Google to ensure that your leads find you along with all your business details on Google Search results.
Once you sign up for Google My Business, you can start accepting bookings directly from your listing using Reserve with Google!
C. Facebook and Instagram:
You can use these platforms to actively promote your business and engage with existing as well as future clients. Adding a ‘Book Now’ button to your Facebook and Instagram accounts can help in converting your profile visitors into paying clients!
Boosting your omnichannel marketing can help you generate qualified leads for your spa. To know more, read our comprehensive blog on the ways of boosting your omnichannel marketing!
D. Discounts/ Offers:
When you are just starting out, charging low for your services can attract clients to your spa. Offer discounts like “first-service discounts” and increase the chances of referrals. You can keep your rates low until you gain good traction.
Collaborate with salons and other businesses in the same service industry to build a good rapport in the neighborhood and pull in more clients. This is a mutually beneficial strategy for both businesses and helps in cross-promotion.
Maintaining a high service quality throughout to get quality referrals is extremely necessary. If you provide top-notch services to your clients, they’ll refer you to their family and friends. And in the end, it’s your client base and revenue that’s increasing.
5. Document revenue and expenses
And now it’s time to figure out the numbers.
This is where you need to set realistic goals and at the same time, ensure that your expenditure and revenue are optimal. You need to earn enough to run your spa and also price your services in a market-friendly manner.
In short, you need to craft a financial plan for your spa to be a successful venture.
Having a detailed plan of how your spa will look from the financial point of view in the next 6 months or 1 year can help you in 2 ways:
i) It can help you in keeping in check on your progress during those months, and mitigate your measures in case things go south,
ii) and, it will determine your eligibility for a loan, in case you need to apply for one.
Let’s take a look at how you can make one. Refer to the below-mentioned template to build a realistic, all-inclusive financial plan for your spa:
A. Fixed Costs
These are the costs that you need to pay to keep your business running. It includes the following:
- Rent for the spa space
- Staff payrolls
It is certainly possible to lower your fixed costs. But this might mean that you will have to shift to a space with a lower rent. And that is entirely up to you. Rent a space or buy a place – don’t forget to factor in everything when you make your financial plan.
Make sure you hire only the required set of staff members. You can figure out how many people you actually need in your team based on your demand.
B. Variable Costs
These are the costs that are directly affected by how well your business is running. It includes the following:
- Product supplies for the services you provide
- How many hours a day is your spa is functional and how many hours does each service take? – directly relates to electricity or any other amenity consumption
- Marketing costs
- Product repair and maintenance costs
- Travel costs – in case you also provide at-home services
C. Financial forecasts
This includes projections of the financial information with respect to your spa’s expenses and income.
Analyze and document how much sales you can expect in the next three to five years. Explain how you would get these numbers, including data and research. If you are applying for funding, share how those funds affect your future sales.
Before we move ahead, make sure you have a time period in your mind that you’ll stick to while making the following assumptions in your financial plan.
Break down your expenditure for a fixed period (preferably a month or a quarter) and divide your expenses into fixed and variable costs.
List down all the losses that your business can possibly incur during the time period that you’ll define for this plan. These losses can include equipment functioning failure as a result of which you might need to buy a new one, staff payrolls in case you feel the need to expand your team, etc.
F. Estimated profit margin
You need to be realistic here. You can draw an assumption of the profit margin based on your sales projections and budget analysis. Represent these in the form of a pie chart or bar graph for easy understanding.
G. Projected cash flow
Make a list of cash inflow and outflow during the defined term. This is your business, so feel free to include all the cash inflows including the ones that aren’t directly as a result of the services that are provided to your clients.
Don’t forget to include cash flows from loans, loan payments, personal funds, taxes, etc.
In case you need funding, you need to specify how the funds will help in your cash flow and for how long.
H. Break-even analysis
This is the point where your spa has covered all expenses and is making revenue more than what is being spent. Basically, this is when you start earning profits.
Note down the break-even point for the first 3-5 years of your business.
It doesn’t end here!
You need to keep a close eye on the ever-changing market, emerging trends, and your competitors. Your financial plan depends on these factors too, and that’s why the plan can keep changing from time to time.
Set long-term goals that are realistic, achievable, and in total sync with your current business performance. Work towards making your business better and successful!
A well-written spa business plan provides a much-needed structure to your business. It ensures that your business is working towards success, is sustainable, and will thrive in the competitive market.
Make sure you check your business plan on a regular basis. Define the time period for a term, and review your plan every term to stay updated. Improvise and make changes to it whenever needed. Set a new goal every year and try to set a specific time period for every goal.
Lastly, have faith in yourself and your dreams – your business will speak for itself!
Let us know if you know anything else on how to write a business plan for a spa in the comments! All the best! 😊
We at Appointy, help business owners grow and run their businesses with our online scheduling software. This blog was a part of our ‘Manage your Business’ category, where we provide expert tips, and resources, or simply talk about the challenges that small and medium businesses face every day.
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