Consulting

Spa Startup Consulting

Are you considering opening a spa? Perhaps you’ve already started your spa business plan, or found a promising new location. Maybe you’ve determined that your hotel should add a spa, and need to begin your due diligence. And maybe you’re well into your spa startup project and find yourself wondering if you’re making the right decisions.

A successful spa startup requires more than a unique vision, a tantalizing menu or a beautiful facility design. It requires a clear understanding of the business principles which govern this competitive and challenging industry.

  • How will you compensate your employees?
  • Which spa services are actually profitable? And which must you have on your menu?
  • How much space should you devote to amenities like locker rooms, wet areas and lounges?
  • Which spa products should you retail?
  • Should you offer your own brand?
  • How will the economy affect your spa startup plans?
  • Should you consider including medical spa services like Botox, Restylane, laser hair removal or IPL?

Spa Business Improvement and Business Turnaround Consulting

Even when the economy is strong, the spa industry operates with notoriously narrow profit margins. Success is never an accident in this competitive and high-overhead business. Hotel spa operating profits, often reported at 20+%, usually  do not fully burden the spa profit and loss statement with overhead expenses as rent and marketing. In most cases, hotel spas make their biggest contribution to the bottom line through their impact on the core business: their ability to significantly increase ADR and occupancy.

Day spa profits can hover below 10% in even well run spas. The proper management of gift revenues is crucial to the spa profit formula, yet laws governing this practice vary from state to state. For this and other reasons, making an apples-to-apples comparison of spa operating profits is extremely difficult. The optimal service mix varies from spa to spa, further complicating business analysis. Some day spas are built on a foundation of salon services, while others avoid hair and nail services altogether. Wynne Business is experienced in evaluating the fitness of both day spas and salon spas.

Today’s medical spas are in a state of flux, as rampant competition, intensifying regulation and a shifting focus demand a rigorous re-examination of the model. The tightening of consumer credit is impacting the growth potential of medical spas. Medical practices attempting to add a spa component are often unprepared for the cultural and customer service demands of the spa industry.

Wellness driven spas are appearing in the medical sector, including cancer treatment centers and detox/recovery facilities. The “health challenged” client, including patients undergoing chemotherapy, those who have had organ transplants, and virtually anyone living with chronic diseases that require medical management, are an enormous and growing population that the spa industry must embrace. Spas that have emphasized luxury and indulgence are finding that their strategy and program needs to be updated.

Regardless of your sector of the spa industry, Wynne Business Spa Consulting will optimize your operation to ensure maximum profit and return on investment. In nearly every case, our consulting services pay for themselves many times over.

Wynne Business works with spas on site and remotely, via teleconference and e-mail. With consultants based on the East and West coast of the US, on-site visits within North America are convenient and affordable. Wynne Business consulting services are available internationally as well. Senior Consultant Lisa M. Starr lectures and teaches in Asia and is particularly attuned to the unique needs of Asian spa organizations.

Business Improvement Consulting

The Financial Checkup

We assess the well-being of your operation across an array of key performance indicators, including sales per square foot, gross profit, overhead expense, labor costs, management structure, employee compensation, and gift program management. With reliable financial data so difficult to obtain in our industry, this invaluable checkup will let you know if you are really on the right track, and what to do if you’re not. If needed, we’ll also help you set up your reporting to ensure that you can measure your “critical numbers” quickly. A bonus for Millenium users: you’ll benefit from our extensive knowledge of this spa management software and its excellent reporting capabilities.

Mystery Shopping and Salesflow Analysis

Concerned about the productivity of your operations? Worried about overall quality of the guest experience? Wondering how to get your staff to work together as a team to grow your business? Baffled by your team’s inability to meet their sales numbers? Wynne Business will conduct an exhaustive Mystery Shop and Salesflow Analysis that will give you incredible insights into your spa’s strengths and weaknesses. A corrective action plan and coaching will enable you to implement changes for maximum impact.

Spa Turnaround Consulting

During economic downturns, spas everywhere are challenged. You can’t afford not to perform at the top of your game during this difficult time. If your facility is underperforming, we use an array of diagnostic tools to quickly identify your core issues and initiate the turnaround process. Regardless of where you are in your business lifecycle, we have strategies and tactics that will strengthen your performance, increase sales, simplify and streamline your operations, improve employee retention, reduce costs and give you greater peace of mind.

Spa Compensation Design

Nothing is more important to the success of your spa operation than your compensation plan. Compensation for revenue production staff is your single largest cost. Yet no element of the spa business plan is more misunderstood. Spas often play “follow the leader,” emulating compensation plans used by competitors, without even knowing whether those competitors are actually profitable.

At best, a poorly designed compensation program may fail to motivate your team, or drive up costs, preventing your spa from reaching its profit targets. At worst, it can create disastrous financial, tax and legal consequences. Our industry is filled with companies that mistakenly classify employees as “independent contractors.” (If you’re tempted to follow this path, please have a conversation with us first!)

Retaining good employees is crucial to the success of your spa. As a group, spa employees are less motivated by financial rewards than many other types of workers. A holistic, well-rounded compensation plan includes non monetary compensation as well. We’ll help you understand which type of benefits you can afford, and share best practices for managing valuable benefits such as employee discounts and unpaid time off.

We also help you understand how best to compensate and reward other categories of spa employees, including spa support teams (spa concierges and spa coordinators) team leaders, trainers and managers.

Compensation Design for Startups

If you’re starting a new spa, Wynne Business will help you build a compensation plan that inspires your team members to perform at their best and rewards teamwork. We’ll also show you how to create a fair and equitable advancement plan that rewards not just seniority, but business-building behaviors like client retention and retail sales, using an objective formula. Startups also require special temporary compensation programs for their first 3-6 months of operations. We can help you control costs during your critical startup period while ensuring that you’re still able to recruit and retain talent.

Compensation Conversions for Existing Spas

If your spa organization needs to rethink an unsuccessful compensation plan, we’ll help you redesign your program and navigate the often choppy waters of a compensation conversion. Because preserving employee morale is so essential, a Wynne Business consultant can be there to guide you through the entire process, and even assist you with your communications plan and staff meetings. In many cases we are able to keep employee compensation close to current levels by creating new opportunities, improving existing incentive programs, and improving employee sales skills through highly motivating in-house training sessions.

Spa Management Educational Programs

Many of the guiding principles of our consulting work are shared in our Spa Directors Management Intensive seminar. This can be a very time- and cost-efficient way to kick off your business improvement project.

Take the first step

A complimentary thirty minute teleconference and needs assessment with a Wynne Business consultant is available by advance appointment. Please contact us at consultants@wynnebusiness.com to complete your business Profile, the first step in scheduling your session.