to Open A Day Spa
"Over the last five years I have
built a successful business that employs 15 people," she says.
"In the beginning, though, I didn't have proper employee contracts
and really went into a lot of the business blindly. I didn't have
benchmarks for how much liability insurance would cost or how much
it would be to heat our site in the winter months.
Day spas continue
to be the strongest segment of the spa industry in North America,
according to The Spa Association's 2004
Industry Report [editor's note: Melinda Minton is the founder
of The Spa Association]. Although opening a new business can be
a bit trying, the rewards are worth the effort - and there are a
lot of resources available to you. The most crucial part of starting
a business, however, is having enough cash flow to get through the
start-up phase. Proper planning of the business is also necessary
to ensure that the fledgling spa gets off to a good start.
As many spa owners will tell you, mistakes made in the beginning
stages of the spa's development will come back to haunt you. In
fact, some mistakes become permanent reminders of an initial learning
For Linda McPherson, owner of Linda
Michael's Day Spa in Great Falls, Montana, there were choices
made in the building of her facility she wishes she could undo.
"While we were fortunate that we didn't require funding and
our business took off quickly, the design of our facility is something
that I would love to make alterations to," she says. "For
instance, creating more spaces that are secluded and quiet; making
the pedicure area more semi-private; and creating treatment rooms
that are larger are all things that I now regret not having done.
"But, unfortunately, once it is built, there is very little
you can do to change the floor plan," McPherson adds.
Leanne Lummis, owner of Visage
Skin Care & Day Spa in Salem, New Hampshire, agrees that
every day as a new owner of her spa brought a variety of learning
"A lot of little details add up when you look at the big picture,"
Lummis adds. This sentiment is common among most spa owners, who recommend
that those considering opening a spa really do their homework. Lyn
Winegar, owner of Renew
Day Spa & Wellness Center in Marietta, Georgia, suggests that
potential owners have a firm foundation of education and experience
before venturing into owning a spa facility.
"Ideally, a spa owner should take business courses, have a solid
understanding of esthetics and skin care, as well as be licensed to
practice massage," Winegar says. "Visit as many spas as
possible, and take the time to think everything through - from your
long-term goals, to cash flow, to the amount of laundry your spa will
go through every week. It all matters."
The Small Business Association (SBA), www.sba.gov,
offers many resources, including information on types of loans. The
SBA offers loans for almost every type of project: a loan-guarantee
program that assists with a conventional bank loan; micro-loans that
can help with small cash-flow problems; extra funding for start-ups;
or funding for smaller projects, such as adding a treatment room to
an existing business.
"We took advantage of the SBA's SCORE program that offers retired
business advisors who can read your business plan, review your profit-and-loss
statement, or simply consult on general aspects of your start-up ideas,"
says Carol Vaughn, owner of Escape for a Day in Gulfport, Mississippi.
"It is a free service and helped us a great deal when we first
opened our business."
Most new business owners get
some kind of conventional loan to get their business going. There
are several factors that bank representatives consider when reviewing
a loan applicant.
"Having a background in the industry is one of the factors that
we look at," says Rob Usher, a loan representative for vFinance,
Inc., in Boca Raton, Florida. "We also take into consideration
the individual's personal credit rating, collateral or equity in easily
made liquid assets, and not [having] any derogatory items on their
personal credit record.
"Even if the business is registered as a corporation or limited
liability company, most banks view the loan as a personal loan and
require a personal assurity for the amount," Usher adds.
Jamie Beacon, a small-business, direct-sales representative for Bank
of America in Tampa, Florida, agrees that a great deal of weight is
placed on the owner's personal financial data.
"We look for gross annual personal income over the last decade,
as well as the amount of debt versus annual earning potential that
the individual will experience over the first five years of the life
of the business," he says. "We prefer candidates with very
little debt, like car payments or home mortgages, and look for those
applicants that have resources for earnings during the initial start-up
phase of the business. That could mean that they have another primary
income generator in the household or it could be earnings generated
from an alternative salary or investment."
While all of this might seem overwhelming, tenacity and careful planning
can go a long way toward ensuring a start-up's success.
"Networking with other spa owners and bodyworkers has helped
our business to thrive," says Jonathan Kenyon, massage therapist
and manager of Apollo Day Spa and Wellness Center in Waterville, Maine.
"Not only do they help with generating industry resources, they
place a more human face on the whole money-and-business component
of owning a spa that can become draining."
Jim Powell, owner and stylist at Natural Concepts Salon Spa in Greenwood,
Indiana, puts the start-up venture into perspective. "Owning
a business can be stressful in the beginning because of funding and
start-up issues," he says. "After that, there is a lot of
long hours and hard work involved in getting past the break-even stage
to where the business is really earning a profit."
"In the end, though, it is all worth it, because of people,"
Powell adds. "When you bring together a great group of employees
and you have a regular base of happy clients, that kind of synergy
is truly rewarding."