Day Spa Startup Horror Stories – Part 2
Lindsay S., operates a day spa she purchased from former owner, Lake County, CA: on facilities
When I bought my day spa from its former owner, everything told me that I was getting the deal of a lifetime. Health problems were forcing her into an early retirement, demanding the sale of her business. The décor was beautiful, most of the fixtures and equipment were like new, and the lease was affordable with an extension. After two years in operation the spa was still a fairly new business, and I saw lots of potential for service improvements and new clients. What I didn’t know then but wished I had thought to investigate was how the facility actually functioned as a facility. I hadn’t actually ever had a service there myself and had no idea what the working environment was like when in normal use. Since purchasing my deal of a day spa 18 months ago I have had to invest considerably more money to correct poor soundproofing in the walls, replace an inadequate water heater, upgrade the cheap carpeting, and implement a better working point-of-sale system. So far, my total out-of-pocket cash has soared to almost $11,000. It scares me to think of what might come next.
I would recommend that anyone thinking about buying a business do the following before signing on the dotted line:
Have a service or two in the spa and pay attention to the building more than the therapist or the treatment itself.
Spend some time in the lobby during a normal business day to get a feel for the flow and functionality of the working area.
Ask to see a copy of any recent building inspection, if possible (will possibly require the cooperation of the landlord if the business space is leased.) Termite repair may be someone else’s responsibility but tenting or reconstruction will certainly affect your business income.
Closely inspect the quality and source of the equipment and fixtures you’re about to buy–maybe they only look good.
Learn as much as you can about POS systems so that you’ll know in advance the difference between high and low-performing programs.
John W. MD, medispa partner, TX: on compensating employees
I think that my physician/partner and I soundly reinforced the cliché of doctors as poor businesspersons by adding a spa component to our dermatology practice. Evidently, we had become intoxicated by the trade articles and presentations touting the merits of a spa as an added marketing and income source. Our area had become increasingly populated by medical services, so we felt that having a spa available for patients would provide us with a competitive advantage. It’s probably too soon to know if the experiment has proven correct or not but one thing we did realize soon after opening the spa: it was far more expensive to operate than we originally believed. Our weekly payroll was killing us and we didn’t think we could sustain the cash drain rate for more than a year, maybe less. While we came to regret it we had based the rate of employee pay on local averages and the results of a survey published in a spa trade magazine. I’m not sure how others have fared with those pay programs but they seemed to be failing us.
Our solution was to hire a highly regarded spa compensation consultant who overhauled our plan and instituted an intelligent merit system that rewarded productivity. The change wasn’t exactly well received by the staff, resulting in some employee turnover, but the situation has stabilized. We’re not making impressive money yet but our cash flow is positive and we’re finally positioned to grow the business.
Janette K., day spa director/owner, AZ: on leadership and boundaries
I’m a big pushover and I admit it. I just had no idea how that attitude would haunt me while trying to act as the director of my spa. We’re not a large business–only 12 employees including myself–but it’s still more than a full-time job for me. I’ve got a young daughter at home and a husband who travels for his career so there’s a lot of responsibility both in and out of the spa! The trouble I have is in saying no to people when I know that I should. I imagined that my employees would be more like family and that, as professionals, would behave as such. While most of my staff is very cooperative, there are a few that are really demanding and lean on me pretty hard to get their way. They constantly push for work schedule changes, more personal time off, and privileges like free spa services and expensive training classes. It’s not that they’re rude about this, but the constant demands and my old inability to draw a line between my employees and me has been a real hardship. I think that I lost control of my business from day one and just didn’t know how I was going to fix the situation.
At this point things are beginning to improve quite a bit but are by no means fully corrected. A friend of mine that has attention deficit disorder raved about a personal life coach she began working with to help her manage her family life and career, and how helpful it’s been to work with someone who understands her challenges. I made an appointment with the coach and in our first meeting she described a plan that would help me become more assertive and set some personal boundaries with both employees and, sad to say, my daughter who has become quite the controller thanks to my permissiveness and my husband’s long absences. We now work on weekly goals, set boundary limits, and then I am given little challenges to test my commitment to improving. All I can say is that it’s really worked for me. Initially I was worried about being the bad guy with my employees, and some of them clearly resented my sudden no-ness! But I also have less day-to-day stress now and feel a lot more confidence and self-respect. I think most of my staff like the change, too. Anyway, before becoming a people manager I would highly suggest that boundaries-challenged persons like myself read books on assertiveness or get some professional assistance in that area. It’ll save you a lot of misery, that’s for sure!
Good luck to you!