Courtesy of:

“Your Complete Resource for Spa & Hotel Development” Development” 702-436-0371 www.ResourcesAndDevelopment.com

PRESENTS:

19 Steps to Opening Your Dream Spa

Copyright 2007 by Resources & Development All rights reserved. This Report, or parts thereof, may not be reproduced in any form without permission

Introduction This report will cover the 19 steps to opening your Dream Spa from “Forming the Idea” to “Grand Opening”. You will gain the benefit of Resources & Development’s years of experience in the successful start-up of many Spa Operations. While this presentation can NOT predict every eventuality of EVERYONE’S situation, it is meant to serve as a generic guideline of steps in a recommended chronology for setting up most spas. There are of course hundreds of variables that make each project unique and circumstances that will add scores of steps to the opening process.

Introduction This report is designed to help you create, “An Opening Process”, a roadmap to your Grand Opening. Our experience has proven time and again that, during the first part of this process (up until construction begins), changing the order of the steps can get many a spa owner in trouble. We trust that this outline will give you enough information to get started and we have also included resources where you can find more help.

Step 1: Form the idea • Decide what kind of Spa you want to be; a Salon, Day Spa, Medical Spa, Resort Spa, Skin Care Clinic, etc.

• Do you want to specialize in one or two aspects of Spa related services or have a broad variety of services?

• What will you offer your clients that they can not readily attain elsewhere?

• Think about everything but don’t worry about the

technical details, this is the time to focus on the blue sky and envision what you think would be perfect.

Step 2: Run the numbers • Reduce the idea into numbers to answer the following:

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– How much will it cost to set-up and build? – How much space will it require? – How many services will you perform and at what price? – What compensation system would you implement and how would it affect profitability? – How much revenue is required to reach break-even and profit? You want to find out what the profitability will be so you can make any necessary adjustments to your original idea. A “Feasibility Study” is what you need. This is how businesses make important decisions BEFORE they invest any money, begin any construction, or even choose a location.

Financial Blueprint • The best way to perform these calculations is with the

“Module Method” where we break the Spa down into components like Massage Room, Front Desk, Facial Room, Hallways, Office, etc.

• This is a specialty at Resources & Development please click the link below for more information.

http://www.resourcesanddevelopment.com/SpaDevel.htm

Step 3: Write a business plan • A business plan allows you to communicate your dream to

investors as well as solidify that vision in your own mind in far more detail than in step one.

• Most investors will ask these two very important questions:

− What will this business do in order to monopolize its marketplace? − How much money can this business make?

• Getting outside expertise will lend credibility to the projections of your business plan.

Ready-to-Use: Spa Business Plan w/ Financials • It has been said, “Failing to Plan is Planning to Fail!” and • •

that is never more true than in the Spa business. A professionally written business plan will get you noticed with lenders. The Ready-to-Use Spa Business Plan with Financials is designed by Spa Professionals for this industry.

Go to this link to make the job of creating a Spa Business Plan as easy as 1-2-3 http://www.resourcesanddevelopment.com/BusinessPlan.htm

Step 4: Obtain the financing • Leasing a space means you will use most of the financing acquired to make leasehold improvements and fund your marketing.

• You are more likely to grab the attention of bankers and lenders if you can involve the purchase of land or buildings.

• The profit margins in this industry are no where near what Venture Capitalists are used to in other industries.

Step 4: Obtain the financing • The best way to get financing is to do your homework

when writing the business plan, paint a clear picture of your vision and design both profitability and strategic marketing into the very fabric of your business.

Resources & Development has strategic partners that can provide help with financing a spa project or purchase. Please call our office today (702-436-0371) and we will connect you with an expert to help you navigate the financing jungle.

Step 5: Find a location • Now that you know you have a profitable business model and the financing is in order, you can look for your location.

• Landlords and sellers can not, and will not wait for you to obtain financing or write your business plan; thus it isn’t wise to look for a location prior to this point in the process.

• It is best to find a location with high traffic and visibility.

The opposite will cost you tremendously in advertising and marketing.

Take a deep breath! Up to this point (steps 1-5) you have had little flexibility in the order of events, and your ability to move on to the next step has been dependant on the permission of others (such as bankers or landlords). Doing steps out of order could be extremely risky. For example, signing a lease with a landlord before having the financing in place could be a disaster if funding does not come through. There is more flexibility in the sequence of the remaining steps. However they will need to happen very quickly and many will need to happen simultaneously. You are only 3-4 months from opening! The sequence we have laid out is proven to be efficient, effective and we confidently recommend it.

Step 6: Design the space • Dedicate as much of the space as possible for making money (revenue production).

– A spa that is less than 1000sf should use 70-80% of the space for revenue production. – A spa that is between 1000-3000sf should use 55-60%. – A spa that is between 3000-7000sf should use 45-50%. – A spa that is larger than 7000sf should use about 40%.

Step 6: Design the space • Make sure your architect understands why a laundry room •

has to be close enough to the treatment rooms without being near them, and other issues like that. We recommend having a consultant review the architectural plans for operational flow.

Resources & Development has strategic partners that can provide help with designing a spa for profit. Please call our office today (702-436-0371) so that we can connect you with a designer that understands the needs of a spa.

Step 7: Commence the construction • Qualities of a good contractor: – – – –

They They They They

will will will will

get the job done on time. be flexible with minor changes throughout the process. not be unreasonable about financial demands. stand behind the work.

• You should visit the location at least once a day to foresee logistical problems.

– For example, outlets in inconvenient places or doors that will swing into equipment.

• The construction usually lasts 2-4 months, unless of course you are starting from the ground up.

Step 8: The marketing process • You will need 2-4 months for the pre-marketing campaign, so start this at the same time as the construction.

• If you hire a professional, hold them completely

accountable for the results and work with them on a daily basis to ensure maximum return on your marketing dollar.

• Spending the money early means making money faster.

Marketing Made Easy • Resources & Development has made special arrangements with Campaign Mojo, to deliver print and internet marketing services to you simply, easily and at a discount.

• Check out their website, view their demo and if you are convinced that this service could make your Marketing easier then use the discount code below. Your Discount Code = MX2H http://www.campaignmojo.com/

Step 9: Design the décor • Anyone can be a decorator if they have an unlimited

budget, but real creativity comes from someone who can take pennies and make it look like dollars were spent.

• Be careful with decisions that are esthetically beautiful

but an operational nightmare. Such as selecting the wrong floor for a “wet treatment room” or fabric (for the drapes or carpets) that is too light in color; it will not survive the heavy traffic and products used in treatments.

Step 10: Design the Menu • Do not try to be everything to everyone; 80% of your sales will be the plain vanilla massage and facial.

• Specialize in one or two services that you want to become

known for so that anyone wanting those services will think of your spa first.

• Your menu is a sales tool, a public relations tool and a

training tool, it needs to be written to work for you not against you.

Step 10: Design the Menu Keep your menu simple in order to... ... allow yourself to minimize staffing requirements. (Having a wide variety of services requires a wide variety of labor with various licenses.) ... simplify training and allow you the time to build consistency into the delivery of EVERY service. ... facilitate an immediate buying decision for your customers.

Step 11: Select the product lines • Consider the following: – – – –

What are you trying to accomplish for your clients? What do you really need from your product line? Are your clients on a budget or is money no object? What is the focus/theme of your spa?

• Once you’ve narrowed down your choices, speak with the representatives, invite them to your spa, and determine if this is a company you would be willing to work with and have a relationship with.

Step 12: Purchasing decisions • Most equipment will have lead times of about 6-8 weeks. •

• •

Check with each manufacturer or distributor. Reassess your construction schedule before placing orders. You want to time the deliveries so that when they are received and you are scheduling set-up/assembly it doesn’t interfere with construction or vice versa. Be sure to follow up on all orders and delivery schedules regularly. Taking these precautions will prevent you from needing to overnight or rush deliveries.

Step 13: Creation of the Employee Manual, Operational Procedures and Job Descriptions • It is important to have these complete before the hiring or training processes.

– They will help build consistency in the delivery of services. – They will simplify the training process. – They will allow your employees to know what is expected of them. – They will ensure high quality personnel, high quality customer service and high quality treatments/services.

• If you are creating these documents from scratch, the process should have been started earlier.

Ready-to-Use Business Tools These are just the ticket for those who want to create their Job Descriptions, Operational Procedures and Employee Manual. 70%-80% of the work is already done (by a Human Resources Spa Professional) for you, and they have been created specifically for the Spa Industry. For more information about these important Human Resources Tools please go to www.resourcesanddevelopment.com/Tools.htm

Step 14: Create processes and systems • Design the steps and customize the software for • • •

reservations, accounting and marketing information. Build in checks and balances (closers double check the front desk staff, managers double check closing reports, owners see daily and bank reconciliations). Make sure your system is customer friendly, and that it helps make the accuracy and timeliness of guest appointments smooth and seamless. Collect data on all customers so you can accurately market to them (via phone, email and direct mail).

Step 15: Select the employees • The right team members will:

– Make it a pleasure to go to work. – Make your customers’ day. – Make your business successful. • Start with a large inventory of applicants to increase the chances of finding a perfect fit. – Advertise: newspapers, massage and beauty schools, word of mouth, referrals. – Outsource to Technical schools in your area • Know what you are looking for, know the requirements for each position. – This is why it is helpful to create the Job Descriptions early on. • Design your interview process and the questions you will use. To learn more about creating your interview process, we recommend you visit the following: http://www.resourcesanddevelopment.com/Interviewing.htm http:// www.resourcesanddevelopment.com/Interviewing.htm http://www.resourcesanddevelopment.com/Recruit.htm

Job Fair & Recruitment Services All businesses need a wide variety of people and personalities to be successful; however the “spa business” needs an unprecedented variety of personalities. Resources & Development has created a unique, comprehensive interviewing methodology specific to the needs of the Spa Industry. We can assist you with: Recruitment & Selection From developing your Hiring Ads to creating a full recruitment program that attracts the candidates you need.

Licensing Requirement Research Do you have time to research what the requirements are in your State, City, and Zip Code? We take care of this for you and translate the language so you know exactly what you need for every discipline.

On-site comprehensive Job Fair Process and Interviewing Training

Step 16: Train the employees • SOPs, training and evaluating will allow you to build quality

into all that you do, and consequently build a brand that will bring your clients back for years to come.

• Train providers regarding treatment protocols as well as all other staff regarding their responsibilities and tasks.

• Evaluate learning and abilities. Don’t allow employees to perform until they are doing it perfectly.

Step 17: Installation & set-up • All construction related equipment and fixtures should be installed and set-up at this point.

• Décor should be completed or close to completion. • The construction should be complete (or close enough

that it is not in the way), staff should be on board and deliveries should begin to arrive.

• Install information technology (IT) - This is best left to professionals. Make sure they are aware of your exact needs; such as number of phone lines and where they should ring to.

Step 18: More training • Now that IT is installed and equipment is in place, you may •

•

need to revise and modify protocols and procedures. Practice and evaluate all your procedures and protocols. Practice makes perfect and you want to make sure everyone knows what they are supposed to do before you open to the public. At this point you should be welcoming your product vendors for product knowledge training and other specialized training your team members might need.

Step 19: Grand Opening! • • •

Have a Grand Opening Party or Open House so potential customers can see your facility and learn about the services you provide. Use the opportunity to advertise in your local media. Make it fun and exciting for your team members, your community and your potential customers.

Now the Hard Work Begins!

Conclusion Now that your doors are open, your goal should be to always be a better business today than you were yesterday; training should continue and new ideas should be incorporated into the operation on a regular basis. A spa is a far more complex business than most people realize, but if you follow the steps we have provided in this report and always keep in mind the following lessons, you will be much more likely to succeed than your competition. – – –

Design your spa to maximize revenue production. Do not make the spa too large or worse yet too small, either sin can mean certain failure. Control the cost of labor; in this business provider labor can eat you alive! Consistent Customer Service is achieved by standardizing the way you deliver your services, and training.

Conclusion Please also keep in mind that in any project there are at least a thousand other overwhelming details, often unforeseen that we could not cover in this report. This is where getting the advice, guidance, or better yet the full time help of a consultant, or someone who has been through all or most of this process before is invaluable. It can save time, money and most of all your sanity! Opening any business takes many hands with many specialties, it is our sincere hope that we may be of service to you in this endeavor. Resources & Development has specialized in working side by side with Owners through this process for many years.

What Can R&D do for YOU? Resources & Development can open the spa for you or simply help with one or two aspects of the opening process. Some of the work that we do regularly for Spa Owners is: – – – – – – – – – –

Feasibility Consulting Package Concept Analysis & Menu Writing Assessment of equipment needs and Product Line Selection Equipment Set-up Creation of all processes and service concepts Writing Employee Manuals, Job Descriptions, and Operational Procedures Employee Selection/Hiring and Job Fairs Spa Manager and/or Director Training On site Service and Treatment Protocol Training Long or short term Spa Management

Some resources for continuous improvement and help • DSA – Day Spa Association

– http://www.dayspaassociation.com/

• Recent Developments – R&D ’s FREE Newsletter

– http://www.resourcesanddevelopment.com/Newsletter.htm

• IMSA – International Medical Spa Association – http://www.medicalspaassociation.org/

• ISPA – International Spa Association

– http://www.experienceispa.com/ISPA/

• Spa Quality LLC

– http://spaquality.com/

Thank You www.ResourcesAndDevelopment.com

Resources & Development is the fastest growing, most trusted resource for consulting, coaching, and support services in the Spa industry.