Originally published in Massage & Bodywork magazine, December/January 2007. Copyright 2007. Associated Bodywork and Massage Professionals. All rights reserved.

All too often entrepreneurs jump headlong into opening and operating a spa business without fully comprehending the magnitude of their commitment. Well into the project, "Oh--I never thought of that" is a familiar, but unproductive, phrase.

Those who enter the spa business from the service side may feel they have an advantage. But what can look like a relatively easy operation as an employee can turn out to be a lot more work than anticipated when all of the responsibility falls on your shoulders. Even those who come equipped with a business background may be under the false impression that the spa business is a simple service operation that can easily turn a profit. Whichever side of the equation you are on, before you consider taking the plunge to spa ownership, it is wise to write a business plan.

There are many business plan formats, but a comprehensive outline generally includes an overall summary that describes the general purpose of your business and your strategic business goals, a marketing plan that defines your target market, acknowledges the competition, and details how you will drive business, a strategic design and development plan that states the equipment, products, personnel, and methods you will use, an operations plan that details how you will manage your spa on a day-to-day basis, and perhaps the most critical, a financial plan that clearly spells out how you will sustain your business throughout the course of ownership. Sound like a lot of work? Consider the following top ten reasons for writing a business plan and then decide.

Avoid the primary cause for most business failures--not having a plan.
It seems obvious, but this is without a doubt one of the biggest mistakes business owners make, says Monte Zwang, principal of Wellness Capital Management. "They assume by some magic of the cosmos their business will perform profitably and customers will knock down the doors to buy their product or service." But even if you have taken the time to develop a plan, Zwang cautions, it is important to remember a business plan is not a homework assignment to be filed away once completed. An effective business plan is one that is used regularly throughout the life of the business. Consider it a road map that also helps you assess where you are at any stage of business development.

Understand the needs and wants of your target market.
It is important to believe in the products and services you sell. But many times spa owners assume what they are selling is synonymous with what clients want. Before you make the mistake of thinking you could sell ice to an Eskimo, consider who your customers are and what it really is they need and/or want. This should involve a detailed demographic analysis of the age, sex, education, income, and lifestyle of your core target market. Performing this task may also lead you to identify a segment of the market that has been overlooked or enable you to define secondary markets that will bring additional profits.

Get a jump on the competition.
Studying the competition before you establish your business in a particular area provides you with several advantages. First, it helps you to understand exactly what it is you are up against. Are there already too many spas in the area? If so, you may want to investigate other geographic locations.

Second, looking at the specific type of products and services your competition is offering is critical in developing a unique selling proposition (USP). In what is quickly becoming an oversaturated market, your USP, or how your business will be better than or different from the competition, may ultimately be what sets your spa apart.

Finally, knowledge of your primary competitors will help you set better standards within your own business. Confidence in yourself and the services you provide is a key ingredient in building a clientele, but blindly assuming you will be better than the competition at the outset is foolish. While you may draw some of your competitor's clients in out of curiosity, keeping them will be quite another matter if your staff cannot outperform them.

Choose the right products and equipment.
Spending money wisely at the onset will keep you from investing in costly products and equipment that ultimately may not earn you the revenue you anticipate. "Equipment is never a good investment when it has downtime, either from poor marketing efforts, poor staff training, or poor quality," says Marti Morenings, founder and CEO of Universal Companies, an international distributor of products, equipment, and supplies to the spa industry.

She advises spa owners to evaluate the functionality of products and equipment before buying. "Nothing is more frustrating than to see an expensive piece of equipment sitting idle in the corner," says Morenings, who notes that while price is always an important factor, spa owners should also consider how committed they are to making their investments profitable, and warns, "ultimately, a lack of training and poor quality or customer service can actually increase the original cost of product and equipment by several multiples."
Another factor to consider is reliability. "It is critical to do business with a vendor who you trust will not only sell high-quality goods, but will also be there when maintenance or repairs are needed," Morenings says.

Hire the right staff at the onset of business development.
Ask any seasoned business owner what the secret is to sustaining a successful operation and most likely their answer will include human resources. Employees are a vital part of any organization, and as those new to owning a business will quickly discover they can make or break your chance of success, or at the very least slow down the process.

Bruce Schoenberg, co-owner of Oasis Day Spas in New York, looks for people with good organizational skills who know how to follow instruction, noting it is important to consider exactly what you are hiring someone to do and who is going to manage that person. "In the spa business what we are really selling is four o'clock today," Schoenberg says, which makes time management another top priority.
When it comes to spa management, it is important for staff to have a solid understanding of the industry. Schoenberg wants his management team to know the business from the inside out. Starting out at either the reception desk or the booking room is not unheard of when it comes to grooming managers--a standard that can be built into your plan in the beginning stages.

Address problems before they arise.
Developing a solid business plan can help you avoid many of the more common and costly mistakes, but it won't keep you from avoiding the everyday problems associated with running a spa business.
Successful business owners understand that productive day-to-day operations don't just happen. They are planned with careful attention to customer and employee relations. This means developing a system for dealing with everything from scheduling, ordering, and inventory control to employee and customer service policies before you open your doors.

Maintain a solid clientele.
The goal of any successful business is to keep clients coming back. Providing customers with excellent service time after time is a critical part of this process that calls for standardized treatment protocols, quality care, and a superior level of customer service. To achieve this goal, Schoenberg notes, everyone in your operation must be held accountable for their performance.

Build programs that give spa-goers added incentive, provide real value, and reward good clients frequently. And treat your employees fairly. Business policies based on honesty and integrity help build client loyalty and decrease employee turnover.

Develop a solid financial plan.
Poor financial and business management strategies are two of the more common reasons for business failure. But even if you can navigate your way through a balance sheet, profit and loss statement, and break-even analysis it still boils down to the money and mainly whether or not you have enough of it.

One of the single most important reasons for writing a business plan, Zwang says, is to develop an understanding of how your profitable business is supposed to loo. "Prepare a conservative sales projection. Know your gross margin on sales (sales minus direct costs). Calculate your monthly overhead expenses. This will allow you to calculate your profitability and break-even and will also help you to understand how much debt you can take on. If you can understand these three functions you are way ahead of 90 percent of the business owners out there."

Schoenberg agrees the single most significant factor in creating a successful business is money, but cautions, "Even after you have calculated all of your expenses and conducted your projections, consider you're wrong and add 50 percent more, because you never know what else might happen."

Build a marketing program that will drive business.
While you can calculate your profitability and project the number of clients who will walk through your doors in the first two to three years, that number is not guaranteed. The right marketing program is critical to driving business. Sadly, many new business owners do not set aside enough funds for this purpose, relying on free publicity and word of mouth to bring in customers.

Marketing generally includes a mix of promotional strategies, such as advertising, publicity, public relations, direct marketing, sales promotions, and personal selling techniques. Implementing these strategies can be cost effective, but be prepared. Break down all of the costs associated with each method beforehand. Then calculate the exact figure into your business plan as an ordinary cost of doing business in the same way you would any other business expense, such as rent or utilities--and stick to it! Marketing is a necessity, not an option.

Keep your business from growing too fast.
While many would not be quick to think of a business growing by leaps and bounds as a problem, it can actually be a sure way for a profitable business to fall apart if you do not have a plan. Before you find yourself so busy that you are turning clients away, consider your options for expansion and establish a standard for assessing quality control. What can you do to provide better service within your existing space? Do you have enough space to accommodate additional service providers? Are you wasting or underutilizing any space?

If after answering these questions you decide you are ready to expand to a second location, tread cautiously. "It's all in the math," Schoenberg says, adding "numbers don't lie." He suggests keeping track of how many people you are turning away. Then consider if that number is enough to sustain a second location and, more importantly, if you have enough capital to move forward. It is also wise to consider whether or not you want the responsibility of a second location. Schoenberg's best advice is to be honest with yourself before moving forward.

Writing a business plan can help you avoid many of the more common mistakes new spa owners make, but if this is something you feel you cannot do on your own, there are numerous tools available to help. Some people are comfortable with texts and worksheets. Others will want a business consultant to guide and manage them throughout the entire planning stages and process of development. There are also many software programs available for those who are comfortable with technology. Still others may wish to enroll in courses that will give them the background needed to work independently. Whichever road you choose, planning is bound to put you one step ahead of the game.

Janet M. D'Angelo is president of J.Angel Communications, a marketing and public relations firm specializing in health, beauty, and wellness, and the author of Spa Business Strategies: A Plan for Success (Milady, 2005). She can be reached at janet@jangelcommunications.com.