Beauty & Wellness Sector

12 Easy Steps to Start your own Spa and Earn in Lakhs

The business of spa is an expensive affair, for those who want to indulge in tranquil rejuvenation or for those who would like to offer such high priced services. But you can’t deny the fact that it’s one trade which gives you high profit margins.

The Spa and Wellness industry is estimated to be worth over US$2.35 billion today, according to international consulting firm Ernst & Young. It is expected to grow at a CAGR of 30-35% over the next five years.

The business of spa is an expensive affair, for those who want to indulge in tranquil rejuvenation or for those who would like to offer such high priced services. But you can’t deny the fact that it’s one trade which gives you high profit margins.

Often aspiring entrepreneurs chuck the idea of getting into spa business due to lack of guidance. Thus, here is a guide for those who are willing to turn the concrete jungle into a hub of rejuvenation.

1. Understand the present market first

Visit couple of day spas, spalons and even hotel spas to start your research and find out what’s common among them, but differentiated in the prices and quality standards. Visit each one discreetly, and observe the spa’s décor and overall customer service practices. Analyze spa service menus to identify nationally recognized services that are not available in your region. Examples include specialized massage modalities, aesthetician-provided facials and unconventional wrap treatments Now, chalk out a plan to bring standardisation in the industry with your brilliant idea which may end the differentiation among the other three. Confused? All I’m saying is, plan your venture as per your market recce and offer high quality services at a much reasonable cost to the price sensitive Indian consumers. This is the success mantra of top day spas in global market.

2.The Opportunities

There are three ways you can make your mark on the hair industry. You can open a franchise hair salon, in which you pay money upfront for the privilege of opening that salon using someone else's established name (which gives you an instant reputation) and its resources (like advertising campaigns). You can buy an established salon from someone who is retiring from the business, has tired of the business, or has damaged the business and forced it into bankruptcy (all three happen every day). A third option is to establish your own salon using your own money, your own ingenuity and your own optimism that hard work and talent will win out.

There's one more option that bears mentioning here because it's so prevalent in the beauty business. Booth rental salons are owned by a person (or persons) who is basically the landlord for a group of hairstylists and other service providers working under his or her roof. As the landlord, the salon owner/operator collects a flat monthly fee from the service providers, for which they have the privilege of using salon space and nonremovable equipment like a styling station and chair. The renters, in turn, are considered independent contractors who must provide their own supplies (everything from hair dryers to perm rods), set their own hours, book their own appointments and have their own key to the building.

3. Look for a suitable location

Spa business requires as tranquil a space as a meditation centre does. In fact, some experts term it as mediation of skin and body. Thereby, it is essential that you ‘Must Avoid’ a location where too much noise persists, public places like marriage halls, community centres, railway tracks etc. If your spa is surrounded with lush greenery and tranquil environment, client re-visit is assured and in return is the growth and publicity of your spa.

4. Ensure apposite business permit

It is imperative to get a business permit before you open a spa. Without licence, operating a spa is considered as unlawful practice, leading to serious regulatory charges. Also, spa business is known for practising intimacy which is equally prohibited as per the law. Thus, if you do not have a business permit, you may end up bearing false charges of such practices even though you do not have them

5. Recruit well-trained & certified staff

While hiring a therapist or spa attendant, you need to understand the complexity of this business which runs mostly on word-of-mouth publicity and a masseur plays a pivotal role in it. A certified therapist is educated and trained enough to heal the nerves and help in reducing stress which means complete rejuvenation of senses. Thereby, it is advisable to hire a certified and trained therapist who knows all the tit-bits of massages, therapies and even educate the client for post therapy care. DO NOT even think of saving on staff recruitment as they are the soul of your business. You may try cutting other corners like architecture or premium products.

Once desired staff is recruited, delegate responsibilities to ensure seamless function. Also, if possible, help your staff participate in further training programmes often organised by government firms and Ayurveda institutes.

6. Spa accreditation is a must

Not many spa owners or franchisors are aware of spa accreditation bodies in India. Well, if you mark my words, you’ll surely see its benefits in the longer run. For instance, Radisson Blu Plaza, Delhi , was a usual hotel spa in the trade which came in limelight as it got National Accreditation Board for Hospitals & Healthcare (NABH) providers. Similarly, NABH accreditation assures quality and high standard of your services, which is an added benefit in the promotion of a spa.

7. List out your specialities

Publish a menu of day spa services. Create a spa services menu tailored to your regional market. Include professionally applied facials and scrub treatments, as well as signature applications such as custom-blended body scrubs. Hire a licensed massage therapist with experience in several modalities, including niches unfilled by other day spas. Consider aromatherapy and other body-enhancing treatments as well.

8. Pricing

Another important part of your salon development plan is the appropriate pricing of your services. Set prices too high, and you'll limit the number of people who can afford them; set them too low, and you'll limit your profit potential and possibly put the business at risk. Of course, the price the market will bear is very much dependent on the demographics of your service area. If you're in an upscale area with larger homes occupied by people with more disposable income, you can price your services accordingly and even offer high-end spa services. But if the surrounding community is peopled by young working families, you'll have to forego the spa services (or offer no more than the bare minimum) and concentrate instead on basic haircutting and color services that are affordably priced.

When setting prices, you must consider the three factors that will influence your prices: labor and supplies, overhead, and profit. Labor costs for salons include salary and benefits costs for both your stylist/spa staff and administrative people (including your manager, receptionist and other support staff). Your own salary is included as a part of this cost. This cost is generally expressed as a price per hour and can vary depending on the amount of time it takes your employees to cut hair or perform other services.

Next, you need to consider your overhead costs, which consist of all costs required to operate the business other than labor. This includes your mortgage or lease payment, utilities, and so on. It's reasonable to estimate that your overhead will be from 40 to 50 percent of your labor and materials cost. (This figure can be adjusted later as you accumulate financial data.) So let's say when you tally up all your labor and materials costs for the year, you arrive at a figure of $100,000. Your estimated overhead expenses (at 45 percent) would be $45,000. This would give you an overhead rate of 45 percent.

The last part of the pricing equation is profit. Salon owners generally can expect to have a net profit of 11 to 15 percent (although you can certainly make this profit figure higher or lower as you see fit). To arrive at the net profit you want, you have to add a markup percentage factor to your services so you'll arrive at the approximate gross amount you'll earn.

9. Advertise

In today’s digital-savvy environment, having a strong online presence is a must. Backing it with social media promotions is an added advantage. Run social media campaigns and customer engaging promotions. For instance, you may offer free foot reflexology or hair pack on the recommendation of one or more clients. May also organise Spa Parties or theme events and invite guests online to participate with their friends, families and partners.

10. Your Salon's Website

Just as you'll access other companies' websites for information about their products and services, you'll want both prospective and repeat clients to be able to find you in cyberspace. Your website will be crucial to your marketing efforts and can be used for everything from posting your hours and driving directions to selling salon services.

11.Publicity

Host a luxury-filled grand opening. Welcome customers by pampering them with introductory spa package pricing. Conduct hourly spa accessories giveaways, and create a mailing list with the entry forms. Ask your massage therapist and medical professionals to speak on the benefits of stress management and relaxation. Advertise the event in local newspapers’ lifestyle sections and in health-focused magazines. Place tasteful invitations at non-competing hair and nail salons, fitness centers and upscale ladies’ clothing stores.

12. Offer initial discounts to win surprise clients

You may also choose to hand out discount coupons. This is the ultimate advertising strategy for a newly opened business as service industry interest people only when they are offered special discounted prices or offers.

It is essential to understand that if you want to open a new venture, especially in service industry, you not necessary see success if your know how to run a business, but also know the need to learn the art of luring consumers. Pampering clients is the ultimate success mantra of spa business. So, what are you waiting for? Start executing the above mentioned points to start your Spa.