Considering the industry

[Iqhwan]

Hi, my name is Ron and I live just outside Phoenix, AZ. I currently own another business but I am considering selling said business and changing careers. My mother-in-law is a MT (sold her MT business in California 6 months ago) and has 20+ years experience in the industry. I am thinking of going to MT school and then opening my own day spa with my mother-in-law's assistance. I will have about $100k to begin my new business.

I guess my questions would be am I jumping into this too fast?
Is $100k enough to start and operate a day spa?
Should I work for someone before starting my own practice?

Any advice would be appreciated.

thanks!

 

[John O]

Hey Ron. I'm in Surprise and I think you'll have a lot of comp. With the Massage Envy's and the Lavendars offering "affordable" services, you are going to have to have somethig to win the clients over. Good luck.

 

[Metalhead]

They offer massage only, correct? We would be a full-service day spa offers pretty much all the goodies.

 

[Terri E]

Ron, I run a successful practice in the Sun City area.
I am a sole proprieter. I do mostly massages and a few spa treatments. My business has no debt and very little
overhead. My business has picked up this year and it's going to be a banner year. I am averaging around$3-4k per month. I have decided not
to expand my business at this time because I don't think the extra money would be worth all the hassle of hiring or firing employees who do not share my work ethics. It would also be hard to control the quality of the massages that are given by others. I go the extra mile for my clients and do quality work. There may be several positive aspects of running a full service day spa, but keep in mind the turn over of therapists you will have to depend on. Massage Envy & Lavendars are ALWAYS hiring, and have a revolving door of employees. Just a thought. If you would like to talk futher, feel free to contact me.

http://integrity.iwantamassage.com

 

[Bovril]

Lavenders is a full service day spa in Surprise and Litchfield Park.

 

[Pompal 09.]

I think you can get started small/medium and definitely grow with $100 grand and a family member who knows the business. Most people on this forum have started on a shoestring.

A great person to get in touch with from this forum would be Kneadfulthings.

 

[basement cat]

I think you will be short

Assuming you don't want to target the "affordable" spa market, it will probably take considerably more than 100K to make a go of it.

A 3-star spa facility costs $50 - $70 per sq ft for build-out / renovation / decor / furnishings. 4 star is up to $100 / ft. This depends on how much of the existing space is usable as is, or with just a decorator's touch. Equipment would probably be extra. A wet treatment room will run you about 10K extra. You also need a sophisticated HVAC system since your retail area needs to be 6-8 degrees warmer than your treatment rooms since no one is naked or in a robe while they shop.

3 treatment rooms, nail area, changing room, relaxation area, employee area, back office, retail space and reception would run about 2000 sq ft, and that is cutting it tight.

Retail space means you have to have products to sell. The most successful spas do about 50% of their revenue from product sales. So you have to bring in a couple of lines to offer, ideally one that you use in your skin and body treatments which helps sell the products. Even a middle of the road line like Pevonia or Dermalogica requires an opening order of $5 - 10K each.

You will also need computers, spa software, credit card processing, bags and boxes for your retail sales, menus, appt cards, advertising. 10K easy.

Don't forget your 1st months rent, security deposit and legal fees for reviewing / negotiating your lease. Another 5 - 10K depending on rent.

You will need at least a week of training for your retail and spa teams, all of which cost an hourly rate but generate no revenue. Another grand down the tubes.

Most importantly, you should have enough cash on hand to cover 3 months of operating expenses (rent, insurance, utilities, etc)

Don't count on your business making money for 6 months.

90% of business failures are due to capital shoreforum.xxxes, not due to some inherent flaw of the quality of or need for the business. Poor planning and poorer funding is what will do you in.

 

[Ken S]

Pevonia or Dermalogica requires an opening order of $5 - 10K each

Last time I asked a Pevonia rep I was told opening an order was closer to a $1K. Has something changed in the past 4 years?

 

[Pompal 09.]

I think you will be short

A 3-star spa facility costs $50 - $70 per sq ft for build-out / renovation / decor / furnishings. 4 star is up to $100 / ft.

I have a family friend who owns a remodeling company. I can get that down much lower. We’ve had a few conversations on this and he’s willing to do this for a little over his cost.

Retail space means you have to have products to sell. The most successful spas do about 50% of their revenue from product sales. So you have to bring in a couple of lines to offer, ideally one that you use in your skin and body treatments which helps sell the products. Even a middle of the road line like Pevonia or Dermalogica requires an opening order of $5 - 10K each.

no problem

You will also need computers, spa software, credit card processing, bags and boxes for your retail sales, menus, appt cards, advertising. 10K easy.

I say 5k at the most. I will build the computer for $500 tops, initial advertising would be around 3k so I’m bringing this down to around 5-6k.

Don't forget your 1st months rent, security deposit and legal fees for reviewing / negotiating your lease. Another 5 - 10K depending on rent.

5-6k sound about right

Based on my calculations it should cost be around $75k to start operation and start on a good foot. My 100k is based on if I sale my company today opposed to waiting until I finish school to sell it. If I wait then I’ll probably get 115-120k for it.

 

[cool person]

Last time I asked a Pevonia rep I was told opening an order was closer to a $1K. Has something changed in the past 4 years?

A) Four years have passed. They may still open accounts for $1K, but that won't buy you very much.
B) To get the whole line you need to spend 5 - 10K depending on the brand.

 

[Emilia of Byzantium]

I think you will be short

I have a family friend who owns a remodeling company. I can get that down much lower. We’ve had a few conversations on this and he’s willing to do this for a little over his cost.

I am a firm believer in you get what you pay for and this is a huge red flag for me.

I can't imagine anyone doing a $50K job at cost. I don't think many folks here would give a family friend $50K worth of visits to their practice at cost.

More power to you if you can make it happen.

 

[Ashley D]

I have done more for his business than he or anyone would ever ask. I referred to him over $100k of work in 3 years. He's ok with it.

 

[sassy k]

oil-man -- I sent you long a PM.

 

[Jen x]

yeah I got it. thanks!

 

[beka]

I would suggest that you get through school before selling your business. That way you still have revenue coming in while you're in training. You may also want to be in the field a bit before beginning your own business. Although having someone with experience in the field will help.

You seem to have the financial angle figured out, which is a good benefit. Perhaps doing demographics and logistics of your area would be the next step? Just throwing that out there.

Good luck on your new path! It's definitely a rewarding one from the "being of service" perspective. If you keep that intention in the mix, you should do very well!

Namaste,
Carole