If you are creating a spa, it is likely that you will require a business plan at some point to provide banks or investors. The experts at Pro Business Plans have worked with many spas to create plans for investment and strategy. This article provides information about what is included in a spa business plan and how it is structured.
Spa Business Plan
Spa Business Plan
There are several things to consider when creating a new spa including the location, atmosphere, business model, and management team. Each of these factors combines when creating a new spa company and together, can be analyzed in order to determine the potential success, risk factors, and profitability of your spa business plan. Each of these factors combine to form your business model and can be used to shape the foundation to your marketing strategy and transform qualitative performance into measurable insights within the financial projections.
The business model of a spa business plan is designed to provide information about all aspects of the spa that you expect to start including the atmosphere/market positioning, location, and operations structure. Together, the business model is the basis for your investment and the core of your business that positions it for success. Some may claim that the business model of a spa is relatively straightforward, to provide health and beauty treatments for its visitors. However, there are many more specific dimensions to this foundation that will determine the success of your spa.
When it comes to a spa, few things hold greater weight than the location it is based in. A spa based in a rural area would perform substantially different than one in a white collar urban area, relative to its positioning. You must strive to find a location that is affordable/accessible, but also is within a reasonable commute for your target demographics of the spa, unless it is a deliberately isolated retreat.
The operations of the spa are how it will fundamentally operate regarding what assets it will include, the layout, and overall structure of the business. The purpose of outlining the operations is to further describe the price and positioning relative to the existing market options and what the price to begin operations is, relative to the potential profits that it may generate in the near term.
The marketing section of a spa business plan is designed to provide information about the company’s initial launch and its ongoing promotion strategy. Unless the spa is being purchased, it will need to have a market entry strategy as well as a system to consistently acquire clients. The marketing section is supported by a detailed breakdown of expenses, relative to the timeline schedule of implementation for the company.
The launch section is designed to provide information about the steps taken to launch the company into immediate profitability. Any successful launch is coupled with public relations and initial discounts that will help the company to progress.
The ongoing promotional strategy is designed to provide a structure by which the company may consistently perform promotions as it scales. This is accomplished through a combination of reputation management, social media such as Google Places, Facebook, and Yelp! and targeted promotions. By this we mean seasonal deals such as Valentine’s day gift card specials or Mother’s day deals. An important part of the marketing strategy is to structure the campaign in a way that minimizes customer acquisition costs and maximizes consumer lifetime value.
The financial forecasts of a spa business plan are designed to provide the projections required for investors to analyze key risk areas and determine the potential for their return on investment. If the business plan is for a bank, they will seek to understand your capability of managing a conservative reserve ratio. Investors will likely calculate the net present value (NPV) in order to understand how much they can potentially make as a return.
The revenue forecasts for a spa business plan should be based upon either standard industry comparable figures or the prior operating history of your company. These projections must be both conservative and based upon reliable data, otherwise they will not be taken seriously by your prospective investors . Therefore, build a logical case towards demonstrating your profitability in the immediate term and the long-term.
The budget forecast section is most effective if it is based on a conservative foundation from quotes for the actual construction and asset acquisition cost. Purchasing furniture can either be low budget used equipment to high end designer quality and everything in-between. The same spectrum of costs applies to everything from rent to payroll and marketing. Therefore, the budget must be well formulated in order to demonstrate to investors that you have analyzed every element and will effectively manage the capital.