4 ways your spa is losing money...and how to fix it
Sometimes we spend so much time searching for new ways to bring money into the spa or salon, it can be easy to overlook the things that are costing you more than they need to. Liz Homes, owner of consultancy Commercial Spa Strategies and former spa director of Rockliffe Hall, shares four common mistakes spas make and, more importantly, how you can fix them to start saving money.
1 Not having a set of values
“What I see a lot in the industry is businesses that are not really clear about their purpose. What’s changed a lot in the marketplace is that people want to align with brands that have the same values as them,” says Holmes. “Millennials want to have a relatable brand experience. So, when beauty salons and spas set up, it's really important to have a set of values that people can relate to. Once that underpins your story, suddenly everything you do becomes more authentic and, in my experience, can drive a higher price point.”
2 Not having clarity in your strategy
“Most spas spend at least half of their income on payroll, and as an industry we are so good at supporting one another - we’re great therapists because we’re all about empathy, support and guidance but actually I’ve come across a lot of examples of people not providing enough challenge to their teams," says Holmes.
"Providing a balance between challenge and support is really important. If half of your income is spent on payroll, let’s make sure the payroll delivers for your business. So, I would really recommend having clear objectives, being very open with your financial targets, ensuring when each therapists turns up for work they’re clear about what’s expected of them during that day; whether it’s driving client retention, rebooking or retail."
3 Not retailing enough
"We see ourselves as retailers in the spa industry, and we are essentially but the industry average still sits around 10% treatment to retail ratio and that’s fairly poor," says Holmes. "I don't think we focus enough on merchandising, promotions, window displays, changing themes in the same way the high street does, so spas and salons need to think of themselves as high-street retailers and use some of the ideas they provide, rather than restrict ourselves just to selling skincare. Anything that’s spa lifestyle-related is something that could be on our shelves, and actually a lot of those products come with much better profitability."
4 Not having a clear USP
"When I’m putting together a business plan for a spa, I’m often asked to do a competitor analysis – what are other spas charging – and that’s fine, but if you really want to have a business with a point of difference, don't just look at what other people are doing," advises Holmes. "Get really clear on what your unique selling point is. You could potentially be £20 more expensive for a 60-minute treatment, providing the value is in that treamtnet and your target audience is right for that treatment. So, as a consultant, I’m all about potential. Not just what everyone else is doing but the potential for change and ambition within the business. As soon as we start to think like that we start to drive our business for success."
For more helpful advice and tips, visit Professional Beauty’s YouTube page.
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