BY VIRGINIA LARA

NEW SPAS PREPARING FOR A GRAND OPENING require a different set of budgetary considerations than an already operational spa . While an existing spa that has built a reputation in the community and has established a customer base will generate a revenue stream to cover expenses , a spa in its preopening phase usually must seek financing for the many costs incurred before its doors open to guests .

Market Research A good feasibility study is imperative in the early stages of planning a new spa . The study should include market research of the area and your competitive set , a well-established marketing and public relations ( PR ) plan and an operational budget that would reflect at least the first five years — and in some cases 10 years — of operation . A feasibility study will identify how long you will need to record a return of the investment and will help you to predict whether your spa will clear a profit — or at least break even — during the first years .

Knowing what to expect — by researching spa budget tools and operations before opening day — will help prepare you for the annual process of budgeting and the day-to-day actions necessary to avoid any unhappy financial surprises . You need to know your spa business ’ s overhead by understanding your P & L ’ s ( profit and loss statement ); how to get the most from your software system through valuable reports showing KPIs ( key performance indicators ); how to make smart use of any downtime , such as pre-planned cross training for team

24 PULSE n OCTOBER 2023